The relevance of PAN in Income Tax exists as an important document but there is a GST number called GSTIN. It is issued to the people who are collecting and depositing GST.
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 the death of a registered person, the legal heirs can apply for cancellation. There are circumstances in which a taxpayer may not need GSTIN. In such a situation, taxpayers can apply for the cancellation of the GST registration number.
Surrender and Cancellation of GSTIN
There were two prominent concepts regarding the cancellation of the GSTIN. A person holding a Goods and Service Tax Identification Number or GSTIN to collect and submit GST to the government can either voluntarily surrender it or be cancelled by the GST officer. It only happens if the taxpayer violates any of the provisions or rules of the Act. For voluntary surrender, taxpayers can easily submit surrender applications online along with the necessary details.
Application for Surrender of the GST Registration
The following people can apply to surrender the GST registration obtained in India
- All registered persons hold GSTIN under section 22 of the CGST Act.
- The legal heir of the registered person in case of the death of such a registered person.
But a registered supplier who was not required to get GSTIN, but still obtained it voluntarily, can apply for the surrender of registration only after the expiry of one year.
What are the Circumstances for Applying for a Surrender of GSTIN?
Section 29 of the CGST Act 2017 lists the circumstances under which surrender or cancellation of GST registration can be initiated.
The following are the circumstances:
- The registered person has discontinued the business or has completely shut it down.
- The registered person has demerged the existing business, and now he will have to surrender the old GSTIN and apply for fresh registration for the new business.
- A change in the structure or constitution of a business leads to the change of PAN. GSTIN is PAN-based, so in the event of a change of PAN, a fresh registration is required, and all registrations will be surrendered.
- The GSTIN is required by any person whose total turnover during the year exceeds ₹20 lakhs in the case of services or ₹40 lakhs in the case of goods.
- Any other reason that the applicant can successfully prove in the surrender application
After-Effects of the Surrender of GSTIN
After surrendering GST registration, the following happens:
- There will be no need to fill out GST returns.
- The person will not be able to continue business after the surrender. If he continues to operate his business, this will invite a penalty.
- There will be no liability for collecting and depositing GST in the future.
- The provisions and rules of GST will not apply to this individual.
Details for Surrender of the GST Registration
The surrender or cancellation of GST registration is filed in the form GST REG 16 within 30 days of the event that requires the surrender of registration.
The following are key details that should be included in the form:
- The correspondence address, along with a valid mobile number and email address.
- The reasons for which the applicant is applying for the surrender of registration.
- Details of the stock in custody.
- The detail of input tax availed on the inventory or stock in possession.
- The details of capital goods and input tax credits are available on them.
- In case of a merger, demerger or amalgamation, details of the new entity.
- Details of the recently filled GST return.
- Mention the amount of GST liability, if applicable, and provide the payment details.
- There should be no pending GSTR-3B, GSTR-1 and GST annual returns.
Procedure for Surrendering GSTIN
The following steps are to be followed for filling out the application for surrender or cancellation of GST registration.
- First, visit the GST portal https://www.gst.gov.in/
- Log in to the portal using your user ID and password.
- Select “services” on the dashboard and select “application for cancellation”.
- The portal will show three tabs under “application for cancellation”, namely:
- Basic details
- Cancellation details
- Verification
Provide basic details such as your business address, future correspondence address, valid email id and mobile number.
After completing the basic details section, click “save and continue”.
- Now it is time to fill in the next tab, “Cancellation details”.
- A drop-down list provides different reasons for the cancellation of registration. Choose the applicable option and provide the necessary details as required by the selected option.
- Now it is time for the final tab, “Verification”. Under this tab, the applicant must state that all the above-provided information is true and correct. Mention the place and select the authorised signatory.
- The application can be verified either by digital signature or EVC option. A digital signature is compulsory for companies and limited liability partnerships (LLPs).
- The applicant will receive a confirmation message and an acknowledgement number. The applicant can track the status of the application through that number.
- After this step, the GST officer will review the application and will issue an order of cancellation within 30 days of the application. The effective date of cancellation of registration will be mentioned in the order.
Grounds for Rejection of the Application
The GST officer can reject the application for the following reasons:
- The application is incomplete or has incorrect information.
- The GST liability is not paid in full.
- In the event of transfer, sale, merger, demerger or amalgamation, the new entity has not applied for registration.
The GST officer will not reject the application directly. First, the officer will send an intimation to the applicant stating the reason for rejection. The applicant must rectify the application within seven days of the intimation’s receipt.
How to Delete GST Account?
To know how to close a GST account, you will need to follow the process set by the GST department in your country. Generally, this involves submitting a request to cancel your registration, along with any required documentation. It is important to ensure that all GST returns have been filed and taxes have been paid before requesting to cancel your registration. It is also advisable to check with the GST department for any specific instructions or requirements for terminating a GST account.
FAQs
Q: When can the commissioner revoke the GST registration?
Ans:
The commissioner can also revoke the GST registration if the registered person fails to comply with the rules and regulations of the act.
Q: What are the major tabs under “application for cancellation”?
Ans:
When selecting “application for cancellation” under Services on the dashboard. Three tabs appear: Basic information, cancellation information and verification.
Q: What is section 29 of CGST?
Ans:
Section 29 of the Central Goods and Services Tax (CGST) Act, 2017, deals with the powers of the Commissioner of GST to grant or cancel the registration of a taxable person. This section provides that the Commissioner of GST may, on an application made by a taxable person, grant or cancel the registration under the CGST Act.
Q: What is the importance of GST registration?
Ans:
There are several reasons why it is important to register for GST:
- Legal Requirement: In many countries, GST registration is mandatory for businesses that exceed a certain annual revenue threshold or engage in specific types of activities. Failure to register for GST can result in penalties and fines.
- Tax Compliance: GST registration helps businesses stay compliant with tax laws and regulations, including filing regular GST returns.
- Input Tax Credit: GST registration allows businesses to claim input tax credit on the GST paid on their inputs, which can reduce their overall tax liability.
- Better Cash Flow: GST registration can help businesses manage their cash flow more effectively, as they can claim input tax credits on a regular basis, rather than waiting for the end of the financial year.
- Improved Transparency and Predictability: GST registration helps to create a more transparent and predictable business environment, as it makes it easier for businesses to understand their tax obligations and for the government to track and collect taxes.
- Improved Competitiveness: GST registration can also help businesses become more competitive, as it allows them to claim input tax credits and reduce the overall cost of goods and services.