GST Registration Cancellation: Process And Revocation Rules

A person who is registered under the Goods and Services Tax (GST) law must follow the provisions of the Central Goods and Services Tax (CGST) Act of 2017 and the associated CGST Rules. However, there are situations when GST registration may be cancelled upon the application of either the tax registrant or by the proper authority.

The legal framework that governs GST registration cancellation is given under Section 29 of the CGST Act, 2017, while revocation of cancellation is given under Section 30. The detailed procedure is prescribed under Rules 20, 21, 21A, 22, and 23 of the CGST Rules, 2017. At TMWala, we simplify the GST registration cancellation and revocation process. From assessing eligibility to filing applications and ensuring GST compliance, we will help you navigate every step with confidence.

What Is GST Registration Cancellation?

GST registration cancellation is the procedure whereby the tax authority cancels the registration given to the taxpayer under GST in line with the provisions mentioned in Section 29 of the CGST Act.

After cancellation takes place:

• The registration becomes ineffective.
• The GSTIN assigned becomes inactive.
• The registered individual is not allowed to charge GST on the supply of goods and services that are subject to GST.
• A tax invoice registered person cannot issue after the effective date of cancellation.
• Obligations that arose before the cancellation date of such registered person remain.

Thus, cancellation of registration does not automatically relieve the taxpayer of the obligations that occurred before cancellation of registration.

Who Can Apply For GST Registration Cancellation?

The CGST Act provides for the cancellation of registration in different situations.

An application may be made by:

• The registered taxpayer.
• The legal heirs of a registered proprietor in the event of death.
• The proper officer may also initiate cancellation proceedings on their own motion where the conditions specified under the Act and Rules are satisfied.

The procedure differs depending on whether cancellation is initiated voluntarily by the taxpayer or by the tax authorities.

Circumstances In Which Registration May Be Cancelled

Section 29 of the CGST Act lays down conditions for cancellation of registration of businesses in accordance with the law.

Some of the cases may include:

1. Dissolution or Closure of Business

A registered individual can apply for cancellation of their registration in case of dissolution or permanent closure of the business. In such situations, the taxpayer has to file an application through the GST portal in the prescribed form.

2. Transfer of Business

Cancellation may also happen when the business is transferred by:Sale, Merger, Transfer in other ways. In case of transfer of business to another person, the recipient may be required to get registered as per the provisions of the GST Act.

3. Change in the Structure of Business

Another reason for cancellation may be the change in the structure of the business, which makes it compulsory to obtain new registration as per the GST Act.

4. No more Investigation required

A registered individual can file for cancellation if he/she is no longer required to get registered under the CGST Act.

This may be applicable if the formal requirement of registration does not exist.

Cancellation By The Proper Officer

Apart from applications submitted by taxpayers, the proper officer may cancel registration in the circumstances specified under the Act and the CGST Rules.

Rule 21 of the CGST Rules specifies several situations in which registration is liable to cancellation, including specified contraventions of the GST law by the proper officer. However, before passing a cancellation order, the proper officer is required to follow the procedure laid down under Rule 22.

Generally, the taxpayer is issued a notice in FORM GST REG17 (Show Cause Notice) explaining the grounds on which cancellation is proposed and is provided an opportunity to furnish a reply in FORM GST REG18 within the time prescribed under the Rules. The principles of natural justice are therefore incorporated into the cancellation process by allowing the registered person to respond before a final decision is taken.

If the proper officer is satisfied with the explanation submitted, the proceedings may be dropped. Otherwise, an order cancelling the registration is issued in FORM GST REG19.

How To Cancel GST Registration Online

A person who has a registered GST must apply electronically to discontinue GST registration through the GST portal under the guidelines of Rule 20 of the CGST Rules 2017, and the request for cancellation of GST registration must be filed using FORM GST REG16.

The registered person must mention the exact reason for cancellation of GST registration, the effective date of cancellation, and other required information in the application. The authority concerned checks the application along with the supporting documents and then finally approves/disapproves the request to cancel the registration.

Steps For GST Cancellation Online

The GST registration cancellation process through the online portal involves the following steps:

Step 1: Log in to the GST Portal

The registered taxpayer must log in to the official GST portal using valid credentials.

Step 2: Access the Cancellation Application

The taxpayer needs to navigate to:

Services → Registration → Application for Cancellation of Registration

The cancellation request is submitted electronically through FORM GST REG16.

Step 3: Fill in the required details of the applicant

The applicant must furnish relevant details, including:

• Reason for cancellation of GST registration.
• Date from which cancellation is required.
• Details of stock of inputs, semi-finished goods, finished goods, and capital goods, wherever applicable.
• Details of tax liability payable under GST provisions.

Providing complete and correct information helps avoid delays in processing the application.

Step 4: Verification and Submission

After filling all required information, the application must be verified through the prescribed electronic verification method, such as Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Once submitted successfully, an Application Reference Number (ARN) is generated, which can be used to check the GST registration status of the cancellation application.

For more information, visit: https://tutorial.gst.gov.in/userguide/registration/Cancellation_of_Registration_manual.htm

Suspension Of GST Registration

In accordance with Rule 21A of the CGST Rules, 2017, GST registration may be suspended in some cases while cancellation proceedings are still ongoing.

If a person decides to cancel their registration, the registration is treated as suspended from either:

• The date of the submission of the application for cancellation; or
• The date from which cancellation is being sought.

If the relevant officer takes action to cancel a GST registration, suspension of the GST registration may take place during the cancellation proceedings as well.

GST Registration Status After Cancellation Application

After filing the cancellation application, taxpayers can track their GST registration status through the GST portal using the ARN generated at the time of submission.

The application status helps taxpayers know whether the request is:

• Submitted and pending for processing.
• Pending clarification.
• Approved.
• Rejected.

If the proper officer requires additional information or clarification, the taxpayer must submit a response within the prescribed period.

GST Return Filing Before Cancellation

Cancellation of GST registration does not exempt a taxpayer from fulfilling obligations that have already become due under the GST law.

Before cancellation is completed, the registered person should ensure compliance with applicable GST return filing requirements and payment of outstanding liabilities.

Where cancellation has occurred due to non-filing of returns, the taxpayer must complete pending return filing requirements before applying for revocation of cancellation.

The taxpayer may need to:

• File pending GST returns.
• Pay outstanding tax liabilities.
• Pay applicable interest.
• Pay penalty or late fees, wherever applicable.

Cancellation Order Under GST

Upon consideration of the application, the relevant officer could approve the cancellation request if the requirements stipulated in the CGST Act and Rules are fulfilled.

The cancellation order is issued in FORM GST REG-19.

This order contains information like:

• Date when cancellation becomes effective.
• Grounds for cancellation.
• Other directions issued under GST provisions.

 It should be noted that cancellation of registration does not change the liability for the period prior to cancellation. All dues under the GST laws remain recoverable.

GST Revocation Of Cancelled Registration

The provisions of GST revocation are contained in Section 30 of the CGST Act, 2017, and Rule 23 of the CGST Rules, 2017.

Revocation is available only when the GST registration has been cancelled by the proper officer on their own motion. A taxpayer who voluntarily cancelled their GST registration cannot apply for revocation of such cancellation.

Conditions For GST Revocation

Before applying for revocation, the taxpayer must comply with the requirements prescribed under the GST Rules.

Where cancellation occurred due to non-filing of returns, the registered person must:

• Furnish all pending GST returns.
• Pay tax payable according to such returns.
• Pay applicable interest.
• Pay penalty and late fee, wherever applicable.

Only after completing these requirements can the taxpayer apply for restoration of the cancelled GST registration.

GST Revocation Process

The submission of an application for cancellation revocation occurs online through GST REG-21 on the GST portal.

The procedure essentially includes: –

• Getting access to the GST portal
• Filling Form GST REG-21
• Entering the necessary details
• Filing the application online
• Waiting for approval from the proper officer.

 If satisfied, the proper officer can revoke the cancellation by passing an order in Form GST REG22.

Rejection Of GST Revocation Application

If the proper officer proposes to reject the revocation application, a notice is issued in FORM GST REG23.

The applicant is given an opportunity to submit a reply in FORM GST REG24.

After considering the taxpayer’s response, the proper officer may approve or reject the application according to the provisions of the CGST Rules.

Conclusion

Cancellation of GST registration is handled in accordance with Section 29 of the CGST Act, 2017, plus the applicable provisions of the CGST Rules. Taxpayers may apply for cancellation using the GST portal when they stop doing business, transfer their business, or stop needing GST registration.

If the cancellation is initiated by the proper authorities, the law allows taxpayers to make their defence before the final order is issued. Section 30 of the CGST Act offers an opportunity to taxpayers for GST revocation if they meet specific conditions to recover their GST registration.

TMWala assists businesses, startups and proprietors with end-to-end support for GST registration cancellation and revocation.

FAQS

1. What is GST registration cancellation?
   GST registration cancellation ends the validity of a taxpayer’s GST registration.
2. Who can apply for GST cancellation?
   A registered taxpayer, legal heir, or proper officer can initiate cancellation.
3. Which form is used for GST cancellation?
   GST cancellation application is filed in FORM GST REG16.
4. Can GST registration be cancelled online?
   Yes, cancellation can be applied through the GST portal.
5. What happens to GSTIN after cancellation?
   The GSTIN becomes inactive after effective cancellation.
6. Is GST return filing required before cancellation?
   Yes, pending GST compliance obligations must be completed.
7. What is GST revocation?
   GST revocation restores a cancelled GST registration.
8. Which form is used for GST revocation?
   An application for revocation is filed in FORM GST REG21.
9. Can voluntary GST cancellation be revoked?
   No, revocation applies only to officer-initiated cancellation.
10. Which law governs GST cancellation?
    GST cancellation is governed by Section 29 of the CGST Act, 2017.