eTax Guru

GST Cancellation without penalty in 6 best steps

GST Cancellation without penalty in 6 best steps

GST cancellation without penalty

GST cancellation without penalty. All inclusive price ₹ 2,000/-

What is GST Cancellation without Penalty?

If a taxable person is no more liable to pay tax, he can chose GST cancellation without penalty option. This means the taxpayer will not be GST registered person. The GST department cancel the GSTIN issued to a taxpayer. If business activities continue to function despite the GST cancellation without penalty, it would liable to heavy penalties

Who should cancel registration under GST?

Penalty for non cancellation / Late registration cancellation under GST

Penalty for late GST cancellation is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day*. The maximum is Rs. 10,000

Types of GST Cancellation

There are following 3 types GST cancellation
  • Voluntary Cancellation of GST Registration by Registered Person. In this option register taxpayer voluntary apply for his GST cancellation without penalty.
  • Legal heirs apply for GST cancellation without penalty of a registered person in case of deceased of registered person. This option is applicable only in case of deceased of registered person only. 
  • Cancellation of GST Registration by GST officer. In this option GST officer can cancelled GST registration of the registered persons in case of fraud or return default
 

GST Cancellation without penalty Process

Logon to the GST online portal on www.gst.gov.in

Fill up the cancellation form www.gst.gov.in and submit the same.

After submission of the online application, the Assessing officer may require further information like reconciliation of the income shown in the Profit & Loss Account with the taxable income details declared in GSTR-3B & GSTR-1 returns, Closing stock details, Sundry creditor details etc.

Registered person should submit the require documents with proper indexing of all enclosure. As far as possible all these documents will be verified by the Assessing officer at time of its submission itself. In case of any deficiency, the same shall be informed to the registered person at the time of receipt of the documents. It may note that if the registered person fails to submit the complete set of hard copy, it liable to be rejected

The Registered person officer shall process the application for cancellation of registration and after successful cancellation of the registration, will inform the registered person through e-mail.

In case of any difficulty, Assessment Commissioner / Deputy Commissioner of the concerned division may be approached for the resolution of grievance.

Pending Tax Liability

As per Section 29 (5) of the CGST and SGST Act, 2017, every registered person whose registration is cancelled shall pay pending tax liabilities. The cancellation of GST will not affect it.

If your registration is cancelled, you will be liable to pay equivalent to higher of:

For Stock in hand:

The input of Stock of goods on the day immediately before the date of cancellation or

Output tax payable on stock of goods

For capital goods:

The input credit taken on such capital goods, reduced by a certain percentage or

Tax payable on transfer value of such capital goods

Reasons for cancellation of registration by GST officer​

GST cancellation by GST officer can be initiated by following reasons:

  • Falling to file tax return under composition leavy: in cases of composition tax payers who had failed to file returns for 3 consecutive return periods u/s Section 29(2)(b)
  • Failing to file tax return by a normal registered person: Regular tax payers who had failed to file returns for a continuous period of 6 months u/s 29(2)(c)
  •  Obtaining registration by  fraud: The GST registration gets cancelled if the same has been obtained by means of fraud, misstatement or suppression of facts
  • The taxable person does not conduct business from the place of business declared during registration
  • The taxable person issues invoices without any supply of goods or services

GST Cancellation steps by department​

To cancel the registration of taxable person, the GST officer is required to follow the below given process:

  • GST officer send show cause notice to concern registered person in form REG-17 
  • The reply to the show cause notice issued under sub-rule (1) shall be furnished online in Form REG-18 within the period 7 working days from the date of service of the notice
  • Where the tax payer instead of replying to the notice served, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee. The GST officer shall drop the proceedings and pass on order in Form GST-REG 20, if he finds the reply satisfactory.
  • However, if the tax payer fails to furnish all the pending returns and make full payment of the amount due or fails to justify, why GST registration should not be cancelled, the proper officer will issue an order in Form GST REG-19. The order will be send within 30 days from the date of reply of the show cause.

Revocation for cancellation under GST

A registered person, whose registration is cancelled by the GST officer, may submit an online application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of 30 days from the date of the service of the order of cancellation of registration.

Process of Revocation under GST

Registered person submit an online application for revocation of cancellation in FORM GST REG-21, on GST portal

  • If the GST officer is satisfied, he can revoke the GST cancellation by an order in FORM GST REG-22, within 30 days from the date of receipt of application for revocation. Reason for revocation of GST cancellation must be recorded in writing.
  • If the tax officer is not satisfied with reason, he can reject the application of revocation by an order in FORM GST REG-05. Before rejecting the application, the tax officer must issue a show cause notice in FORM GST REG-23 for the applicant to ask why the application should not be rejected. The registered person must reply in FORM GST REG-24 within 7 working days from the date of the service of the notice
  • The tax officer is required to take a decision within 30 days form date of receipt of reply from the tax applicant in FORM GST REG-24
 

GST Final Return

As per Section 63 of the CGST and SGST Act, 2017, in cases where the tax payer whose GST cancelled, fails to file Final Return in GSTR -10 within 3 months of the date of cancellation or date of order of cancellation, whichever is later, late filing penalty of INR 100 for every day during which the failure continues, subject to a maximum of Rs. 10000/- is applicable.

Re-Registration under GST India

A taxpayer can apply for Re-Registration under GST India,If he fall following criteria:

  • Business with turnover above the threshold limit 
  • of  Rs. 40 Lakhs*
  • Casual taxable persons
  • Non Resident taxable persons
  • Agents & Input service distributor
  • Person paying tax under the reverse
  • charges mechanism
  • Person who supplies via-e-commerce
  • Inter state supplies
  • Export of Goods & Services

GST CANCELLATION FAQS

Yes, GST number can cancel without penalty. e-Tax Guru is providing service for GST cancellation without penalty.

Yes, If we have made any sale or purchase, GST return filing is mandatory. However, if we have not made any sale or purchase, we can opt the option for GST cancellation without filing returns.

Reasons for GST cancellation are following:

  • Registered person turnover is below the threshold limit
  • Change in the constitution of Registered person, say from partnership to company or individual
  • Death of proprietor
  • Registered person closed down the taxable business activities
  • Registered person has shifted its office from one state to another state, Therefore, a need arise for surrender of the old registration
  • Due to technical error in the system, the registered person has been issued multiple registrations for the same address. In the case, the additional registration is required to be surrendered
  • GST cancellation by department for return defaulters

After GST cancellation each taxpayer is liable to file his last return form. This form is called final return

Penalty for late GST cancellation is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day*. The maximum is Rs. 10,000

GST cancellation can be initiated by following 3 ways:

  • Voluntary Cancellation of GST Registration by Registered Person. In this option register taxpayer voluntary apply for his GST registration cancellation.
  • Legal heirs apply for cancellation of a registered person in case of deceased of registered person. This option is applicable only in case of deceased of registered person only.
  • Cancellation of GST Registration by GST Officer. In this option GST officer can cancelled GST registration of the registered persons in case of fraud or return defaulters.

A registered person, whose registration is cancelled by the GST officer, may submit an online application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of 30 days from the date of the service of the order of cancellation of registration.