Introduction:

The provision relating to cancellation of GST registration is contained in section 29 of the Act. 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 this article we shall see the types cancellation of GST registration, various circumstances cancellation of GST registration happens and the procedure for cancellation.

Section 1: What are the Types of Cancellation of GST registration?

There are two types cancellation of GST registration

1. Voluntary cancellation by registered person – where the registered person no more requires the registration.
2. Suo-motu cancellation by the department – where the proper officer considers the registration of a person liable for cancelation in view of certain defaults. For example –  when the registered person not doing the business from the registered place of business or if he issues tax invoice without making the supply of goods or services.

Section 2: Circumstances where GST Registration is liable to be cancelled?

1. Circumstances when the registration can be cancelled either sumotu by proper officer or on an application of the registered person. Example – Business discontinued, transferred fully for any reason, amalgamated with other legal entity, demerged, change in the  constitution of the business.
2. Circumstances when the proper officer can cancel registration on his own if,

1. When a registered person not filed returns for continues 6 months
2. Voluntarily registered person has not commenced the business within 6 months from the date of registration
3. Registration was obtained by means of fraud, willful misstatement of or suppression of facts
4. When registered person does not conduct any business from the declared place of business
5. When issues invoice or bill without supply of goods or service

Section 3: Procedure for cancellation of GST registration

Voluntary cancellation by registered person application  

A registered person seeking cancellation of registration shall electronically submit the application for cancellation of registration in prescribed form within 30 days of occurrence of the event warranting cancellation. He is required to furnish in the application the details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and of capital goods held in stock on the date from which cancellation of registration is sought, liability thereon, details of the payment, if any , made against such liability and may furnish relevant documents thereof.

Suo-motu cancellation by the department

Where the proper officer cancels thee registration suo-motu, he shal not cancel the same without giving a show cause notice and without giving a reasonable opportunity of being heard, to the registered person. The reply to such show cause notice has to be submitted within 7 days of service of notice.

If reply to show cause notice is satisfactory, proper officer shall drop the proceedings and pass an order in prescribed form. However, where the person instead of replying to show cause notice served for failure to furnish returns for a continuous period of 6 months ( 3 months in case of composition scheme )  furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order. Where registration of a person is liable to be cancelled, proper officer shall issue the order of cancellation of registration within 30 days from the date of reply to show cause notice.

Conclusion:

Cancellation of GST registration should be done as per the section 29  of the GST act which has explained in the above article. In case of suo-motu cancellation of gst registration once has to reply to the show case notice , follow the above guidelines in order to avoid the Cancellation of GST registration.

Disclaimer: The content and views stated in this article is solely for informational purpose only.

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