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.
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.
Cancellation of GST registration ‘suo moto’ signifies that the tax authority decided to cancel the registration independently. According to Section 29(2) of the CGST Act, the tax office needs a good reason to begin cancellation procedures.
Needed For Automatic GST Cancellation
If any of the following is true, the tax officer may cancel the transaction suo moto
If taxpayers register a business based on a lie, omission, or misrepresentation they will face penalties
The taxpayer did not apply for GSTRegistration Process within 90 days of the appointed date or such later date as may be prescribed
The taxpayer has engaged in tax evasion by supplying goods or services without issuing an invoice, as prohibited by the CGST Act
It has come to our attention that the taxpayer has issued an invoice without providing the products or services for which the invoice is being given to claim an input tax credit or a tax refund falsely.
Upon the death of the sole proprietor, if the business’s governing documents provide for a sole proprietorship; upon the amalgamation, transfer, merger, demerger, or similar event; and in the event of any other similar event.
If the Constitution is amended in a way that affects PAN,
If the company decides to shut down and stop operating,
The Correct Suo Moto Canceling Procedure
GST legislation requires the tax officer to provide the taxpayer a show-cause notice, giving the taxpayer a chance to explain his side of the story. The taxpayer must provide reasons why the registration should not be revoked in response to the show-cause notice. The taxpayer must react to this notice within seven business days.
If the tax officer is happy with his response, he may abandon the cancellation proceedings he has launched and notify the taxpayer of his decision through SMS or email.
If the tax office does not hear back from the taxpayer within seven business days, or if the taxpayer’s response is unsatisfactory, the registration will be canceled.
Ability to get one’s voice heard
The cancellation of registration must be preceded by the issuance of a Show Cause Notice (SCN) and the taxpayer’s reasonable opportunity to respond to the SCN. The Tax Official must therefore serve the taxpayer with an SCN before beginning Suo Moto cancellation proceedings, requesting an explanation as to why the taxpayer’s registration should not be canceled.
What Will Happen If Suo Moto Cancellation is Canceled?
Change the status of the UIN/GSTIN/GSTP ID from “Proceeding for Cancellation initiated” to “Inactive,” and notify any other relevant Tax Authorities.
The taxpayer won’t be able to submit a return or invoices for the period after the cancellation order’s effective date.
After a cancellation order has been issued, the taxpayer will no longer be able to change their registration information. You may alter your contact info (including email and cell phone) until any outstanding balances or refunds are resolved.
React to orders/notices, non-essential amendments, etc., linked to assessment/recovery/enforcement.
When will the GST freeze go into effect?
If a taxpayer initiates cancellation of registration, the date of suspension will be the date on which the cancellation application was filed; if the GST officer starts cancellation of registration “Suo Moto,” the date of suspension will be the date on which the SCN for cancellation of registration is issued.
Can I still file my prior period’s GST returns if I cancel my “Suo Moto” registration?
After a suo moto cancellation, GST Returns can be filed for the prior period (i.e., the time before the date of cancellation specified in the cancellation order).
However, the taxpayer is not permitted to submit a return or invoices for the time period following the cancellation order’s effective date. Furthermore, GSTP will be unable to act on your behalf to perform GSTP duties for the period after the cancellation date specified in the cancellation order.
How can I get my GSTIN activated once it has been temporarily suspended?
A GSTIN that is currently in the “Suspended” status will be returned to the “Active” status if and only if the officer rejects the cancellation of the registration application or the suo moto cancellation process is abandoned after the hearing. When a taxpayer’s GSTIN is moved from the “Suspended” to the “Active” state, he is once again considered an active taxpayer and has full access to the GST Portal, as is the case for all active taxpayers.
Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months
Supplies any goods and / or services without issue of any invoice, in violation of the provisions of the Act or rules made thereunder, with the intention to evade tax
Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax
Collects any amount as representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
Fails to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
Person is no longer liable to deduct tax at source as per the provisions of GST Law
Person is no longer liable to collect tax at source as per the provisions of GST Law
Person no longer required to be registered under provisions of GST Law
GST Practitioner is found guilty of misconduct in connection with any proceeding under the GST Law.
Composition person has not furnished returns for three consecutive tax periods,
Registration has been obtained by means of fraud, willful misstatement or suppression of facts. Etc.
2. Will I be intimated before the Suo Moto Cancellation of Registration?
Yes. Registration cannot be cancelled without a Show Cause Notice being given to taxpayer and a reasonable opportunity of being heard by the Tax Official. Thus, in case of Suo Moto cancellation of registration, a Show Cause Notice shall be issued by the Tax Official/ Proper officer to the taxpayer and taxpayer would be given a chance to file clarifications in the stipulated time limit.
3. What is the precondition for Suo Moto Cancellation of Registration?
There must be a valid reason for initiation of proceeding for Suo moto cancellation as specified under Section 29(2) of the CGST/SGST Act.
4. What is the duration within which I need to file a response for Show Cause Notice regarding Suo Moto Cancellation of Registration?
You need to provide response within the prescribed time limit of 7 working days’ time to file reply to the Show Cause Notice (SCN) using the Services > Registration > Application for Filing Clarifications link. If no response is given within prescribed 7 working days, the Tax Official can proceed with Cancellation of registration.
Status of GSTIN will change from “Suspended” to “Active”.
6. What shall be the effective date of cancellation of registration?
Effective date of cancellation will be the date as mentioned in the cancellation order.
7. Will the cancellation of registration means that I have no liabilities?
No, any liabilities prior to the date of suo moto cancellation will have to be paid by the taxpayer, irrespective of the fact that when determination of liabilities are done.
Any liability which is related to that particular GSTIN is required to be paid by the taxpayer. It can be recovered later on even after the cancellation of GSTIN.
8. Will the Suo moto Cancellation of registration be proceeded separately for each act?
Cancellation of registration under the CGST Act or SGST/UTGST or IGST Act shall be deemed to be a cancellation of registration under SGST Act / UTGST Act or CGST Act respectively and vice versa.
9. What will happen once Registration is cancelled?
a) Once registration is cancelled by the Tax Authority, the taxpayer will be intimated about the same via SMS and Email. Order for Cancellation of Registration will be issued and intimated to the Primary Authorized Signatory by Email and SMS.
b) Order will be made available on taxpayer’s dashboard to view, print and download.
c) Status of the GSTIN/UIN/GSTP ID from ‘Proceeding for Cancellation initiated’ to ‘Inactive’ and will be intimated to the other concerned Tax Authority.
d) Taxpayer would not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions for any Taxpayer for the period after the date of cancellation mentioned in the cancellation order.
However, email address and mobile number can be updated till dues/ refund are cleared.
12. Can I submit returns of the earlier period after suo moto cancellation of registration?
You can submit returns of the earlier period (i.e. for the period before date of cancellation mentioned in the cancellation order), after suo moto cancellation of registration. However, you will not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions on your behalf for the period after the date of cancellation mentioned in the cancellation order.
13. Where can I view the Show Cause Notice regarding Suo Moto Cancellation of Registration?
Navigate to Services > User Services > View Notices and Orders to view the Show Cause Notice regarding Suo Moto Cancellation of Registration.
14. How can I reply to the Show Cause Notice regarding Suo Moto Cancellation of Registration?
To reply to the Show Cause Notice related to Suo Moto Cancellation, Navigate to Services > Registration> Application for Filing Clarifications.
The application is displayed for filing clarification. The reason for cancellation provided by Tax Officer will be displayed in the form. You can enter your Response.
Note: Taxpayer is required to submit his/her response to each of the cancellation reasons invoked by the tax officer in the notice.
15. Where can I view the date for personal hearing regarding Suo Moto Cancellation of Registration?
Navigate to Services > User Services > View Notices and Orders to view the Show Cause Notice regarding Suo Moto Cancellation of Registration. Download the notice to view the personal hearing date.
17. Can I submit application for cancellation of registration, in case Tax Official has already initiated the suo-moto cancellation of Registration?
No, you cannot submit application for cancellation of registration, in case Tax Official has already initiated suo-moto cancellation of your Registration.
18. The status my GSTIN is showing as “Suspended” under My Profile. Why?
When a taxpayer files an application for cancellation of registration or Suo Moto cancellation has been initiated by the Tax Official, the status of the GSTIN is shown as “Suspended”. This will be changed to “Active” only when application for cancellation of registration is rejected by the Tax Official or Suo Moto cancellation proceeding is dropped, after hearing.
19. The status my GSTIN is showing as “Suspended” under My Profile. Can I perform any activity on the GST Portal?
When the status of your GSTIN is showing as “Suspended” status, you can perform certain activities on GST Portal like filing Appeal, making payment, filing for Refunds, reply to Assessment/Recovery/ Enforcement related orders/ notices, even make non-core amendment etc..
Taxpayer will not be able to file core amendment application till the time registration is suspended. However, email address and mobile number can be updated till dues/ refund are cleared.
Suo Moto cancellation has been initiated by the Tax Official: Date of Suspension will be the date on which notice for Cancellation of registration (Form GST REG-17) is issued.
21. What will happen once the status is changed from “Suspended” to “Active”?
Once the status of GSTIN is changed from “Suspended” to “Active”, you will be again treated as an Active taxpayer and all the accesses given to the Active taxpayers on GST Portal will be enabled for you immediately.
23. What happens if I have filed all my due returns after SCN has been issued by the system for non-filing of Returns/Statements and my status becomes suspended?
Once all the due returns are filed, further proceedings will be auto dropped for cancellation of the GSTIN where SCN has been issued for non-filing of Returns/Statements by the system and the registration status would become active even if you have not responded to the SCN issued.
24. I have filed all my due returns. However, my registration status is still showing as Suspended. How can I update my status?
Once all the due returns are filed, proceedings will be auto dropped for cancellation of the GSTIN in cases where SCN has been issued for non-filing of Returns/Statements by the system and your status will change from ‘Suspended’ to ‘Active’. In case proceedings are not dropped automatically,
