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Cancellation of registration under GST
You can cancel your GST registration if the GST rules don’t apply to you or you are shutting down your business or profession, or the tax officer calls for cancellation. This article will guide you through the different types of cancellations, and the overall process.
Meaning of cancellation of GST registration
Cancellation of GST registration simply means that the taxpayer will not be a GST registered person anymore. He will not have to pay or collect GST or claim the input tax credit and accordingly, need not file GST returns.
Consequences of GST registration cancellation
The taxpayer will not pay GST anymore
For certain businesses, registration under GST is mandatory. If the GST registration is cancelled and business is still continued, it will mean an offence under GST and heavy penalties will apply.
Cancellation of Registration in GST
The registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by the department on their own motion, or the registered person can apply for cancellation of their registration. In case of death of registered person, the legal heirs can apply for cancellation. In case the registration has been cancelled by the department, there is a provision for revocation of the cancellation. On cancellation of the registration the person has to file a return which is called the final return.
Reason for cancellation
A person registered under any of the existing laws, but who is not liable to be registered under the GST Act;
The business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of
There is any change in the constitution of the business;
The taxable person (other than the person who has voluntarily taken registration under subsection (3) of section 25 of the CGST Act, 2017) is no longer liable to be registered;
A registered person has contravened such provisions of the Act or the rules made thereunder;
A person paying tax under Composition levy has not furnished returns for three consecutive tax periods;
Any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of six months;
Any person who has taken voluntary registration under subsection (3) of section 25 has not commenced business within six months from the date of registration;
Registration has been obtained by means of fraud, willful misstatement or suppression of facts