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Faq's on cancellation of GST Registration



Q-1	What are the cercumstances in which GST registration can be cancelled?
Ans.	Any registration granted under this Act may be cancelled by the Proper Officer. The various
Subsection 1	circumstances and the provisions of the law on this subject have been outlined under Sec. 29
	A registration granted can be cancelled by the proper officer, either on his own or on
	application by the registered person when –
	— the business is discontinued, transferred fully for any reason including death of
	proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
	— there is any change in the constitution of the business; (For example- Private limited company has changed to a public limited company) or
	— the taxable person is no longer liable to be registered under sections 22 or section 24 or
	intends to opt out of the registration voluntarily made under subsection (3) of section 25.
	Provided that during pendency of the proceedings relating to cancellation of
	registration filed by the registered person, the registration may be suspended for such
	period and in such manner as may be prescribed
	Inserted vide The Central Goods & Services Tax Amendment Act, 2018 w.e.f 01.02.2019

Q-2	When the proper office may cancell the registration?
Ans.	The proper officer may cancel the registration of a person from such date, including any
Subsection 2	retrospective date, as he may deem fit, where, ––
	(a) a registered person has contravened such provisions of the Act or the rules made
	thereunder as may be prescribed; or
	(b) a person paying tax under section 10 has not furnished returns for three
	consecutive tax periods; or
	(c) any registered person, other than a person specified in clause (b), has not
	furnished returns for a continuous period of six months; or
	(d) any person who has taken voluntary registration under sub-section (3) of section
	25 has not commenced business within six months from the date of registration;
	or
	(e) registration has been obtained by means of fraud, wilful misstatement or
	suppression of facts:

	Provided that the proper officer shall not cancel the registration without giving the
	person an opportunity of being heard:
	[Provided further that during pendency of the proceedings relating to cancellation of
	registration, the proper officer may suspend the registration for such period and in such
	manner as may be prescribed].
	Inserted vide The Central Goods & Services Tax Amendment Act, 2018 w.e.f 01.02.2019

Q-3	Is the cancellation of Reg. affect the liability?
	No, The cancellation of registration under this section shall not affect the liability of the
Subsection 3	person to pay tax and other dues under this Act or to discharge any obligation under
	this Act or the rules made thereunder- for any period prior to the date of cancellation
	whether or not such tax and other dues are determined before or after the date of
	cancellation.

Q-4	Is the cancellation deemed to be affect in all act of GST?
Ans.	Yes, The cancellation of registration under the State Goods and Services Tax Act or the
Subsection 4	Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to
	be a cancellation of registration under this Act.


Q-5	What will be liability of GST reversal in case of cancellation?
Ans.	Every registered person whose registration is cancelled shall pay an amount, by way of
Subsection 5	debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of
	input tax in respect of inputs held in stock and inputs contained in semi-finished or
	finished goods held in stock or capital goods or plant and machinery on the day
	immediately preceding the date of such cancellation or the output tax payable on such
	goods, whichever is higher, calculated in such manner as may be prescribed:

	Provided that in case of capital goods or plant and machinery, the taxable person shall
	pay an amount equal to the input tax credit taken on the said capital goods or plant and
	machinery, reduced by such percentage points as may be prescribed or the tax on the
	transaction value of such capital goods or plant and machinery under section 15,
	whichever is higher.

Q-6	What will be the manner of calculation of amount payable u/s/s 5 ?
Ans.	The amount payable under sub-section (5) shall be calculated in such manner as may
Subsection 6	be prescribed.

Q-7	What is the Process for Application for cancellatin of Registration ?
Ans.	A registered person, other than a person to whom a registration has been granted under
Rule 20	rule 12 or a person to whom a Unique Identity Number has been granted under rule 17,
	seeking cancellation of his registration under sub-section (1) of section 29 shall
	electronically submit an application in FORM GST REG-16, including therein 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 the cancellation of
	registration is sought, liability thereon, the details of the payment, if any, made against
	such liability and may furnish, along with the application, relevant documents in support
	thereof, at the common portal within a period of thirty days of the occurrence of the
	event warranting the cancellation, either directly or through a Facilitation Centre notified
	by the Commissioner.

	[Provided that no application for the cancellation of registration shall be considered in
	case of a taxable person, who has registered voluntarily, before the expiry of a period of
	one year from the effective date of registration.] Omitted vide Notf no. 03/2018-CT dt. 23.01.2018

Q-8	In what cases Registration to be cancelled by Proper officer?
Ans.	Registration to be cancelled in certain cases
Rule 21	The registration granted to a person is liable to be cancelled, if the said person,-
	(a) does not conduct any business from the declared place of business; or
	(b) issues invoice or bill without supply of goods or services in violation of the
	provisions of this Act, or the rules made thereunder; or
	[(c) violates the provisions of section 171 of the Act or the rules made thereunder. i.e Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)]- Inserted vide Notf no. 07/2017-CT dt. 27.06.2017 ;or
	[(d) violates the provision of rule 10A. i.e requirement of furnishing of the bank account details under GST]-Inserted vide Notf no. 31/2019 – CT dt. 28.06.2019

	With effect from 1st January 2021-
	(e) Utilisation of ITC from electronic credit ledger to discharge more than 99% of the tax liability for specified taxpayers violating Rule 86B – with the total taxable value of supplies exceeding Rs.50 lakh in the month, with some exceptions. OR
	(f) A taxpayer who cannot file GSTR-1 due to GSTR-3B not being filed for more than two consecutive months (one quarter for those who opt into the QRMP scheme) OR
	(g) Avails input tax credit in violation of the provisions of section 16 of the Act or the rules.


Q-9	What is Suspension of Registration and when this Rule inserted ?
Ans.	Inserted vide Notf no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019
Rule 21A
	(1) Where a registered person has applied for cancellation of registration under rule 20, the
	registration shall be deemed to be suspended from the date of submission of the
	application or the date from which the cancellation is sought, whichever is later, pending
	the completion of proceedings for cancellation of registration under rule 22.

	(2) Where the proper officer has reasons to believe that the registration of a person is liable
	to be cancelled under section 29 or under rule 21, he may, after affording the said
	person a reasonable opportunity of being heard, suspend the registration of such
	person with effect from a date to be determined by him, pending the completion of the
	proceedings for cancellation of registration under rule 22.
	(3) A registered person, whose registration has been suspended under sub-rule (1) or subrule
	(2), shall not make any taxable supply during the period of suspension and shall
	not be required to furnish any return under section 39.
	[Explanation.-For the purposes of this sub-rule, the expression “shall not make
	any taxable supply” shall mean that the registered person shall not issue a tax invoice
	and, accordingly, not charge tax on supplies made by him during the period of
	suspension].-Inserted vide Notf no. 49/2019-CT dt. 09.10.2019

	(4) The suspension of registration under sub-rule (1) or sub-rule (2) shall be deemed to be
	revoked upon completion of the proceedings by the proper officer under rule 22 and
	such revocation shall be effective from the date on which the suspension had come into
	effect.]
	[(5) Where any order having the effect of revocation of suspension of registration has been
	passed, the provisions of clause (a) of sub-section (3) of section 31 and section 40 in
	respect of the supplies made during the period of suspension and the procedure
	specified therein shall apply].-Inserted vide Notf no. 49/2019-CT dt. 09.10.2019


Q-10	What is the Process of cancellatin of Registration by Proper officer ?
Ans.	(1) Where the proper officer has reasons to believe that the registration of a person is
Rule 22	liable to be cancelled under section 29, he shall issue a notice to such person in FORM	SCN
	GST REG-17, requiring him to show cause, within a period of seven working days from
	the date of the service of such notice, as to why his registration shall not be cancelled.

	(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in
	FORM GST REG–18 within the period specified in the said sub-rule.

	(3) Where a person who has submitted an application for cancellation of his registration is
	no longer liable to be registered or his registration is liable to be cancelled, the proper
	officer shall issue an order in FORM GST REG-19, within a period of thirty days from
	the date of application submitted under rule 20 ([sub-rule (1) of] rule 20 Omitted vide Notf no. 7/2017-CT dt. 27.06.2017) or, as the case may
	be, the date of the reply to the show cause issued under sub-rule (1), cancel the
	registration, with effect from a date to be determined by him and notify the taxable
	person, directing him to pay arrears of any tax, interest or penalty including the amount
	liable to be paid under sub-section (5) of section 29.

	(4) Where the reply furnished under sub-rule (2) is found to be satisfactory, the proper
	officer shall drop the proceedings and pass an order in FORM GST REG–20:

	[Provided that where the person instead of replying to the notice served under subrule
	(1) for contravention of the provisions contained in clause (b) or clause (c) of subsection
	(2) of section 29, 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 in FORM GST-REG-20.]-Inserted vide Notf no. 39/2018-CT dt. 04.09.2018

	(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a
	deceased proprietor, as if the application had been submitted by the proprietor himself


Q-11	What is final return and when it to be filed after cancellation?
Ans.	As per section 45 i.e Final return, “every registered person who is required to furnish a
	return under sub-section (1) of section 39 and whose registration has been cancelled shall
	furnish online on the GST Portal, a final return “within three months” of the date of
	cancellation or date of order of cancellation, whichever is later, in GST FORM GSTR-10 as
	specified in Rule 81”


Q-12	What are the releven for deal in cancellation?
Ans.	Form No	Filed By	Discription
	REG-16	For Taxpayer	Application for Cancellation of Registration
	REG -17	For Tax Official	Show Cause Notice for Cancellation of Registration
	REG -18	For Taxpayer	Reply to the Show Cause Notice issued for cancellation for registration
	REG-19	For Tax Official	Order for Cancellation of Registration
	REG-20	For Tax Official	Order for dropping the proceedings for cancellation of registration
Q-13	In case a person whose tournover not exceed threshold limit but taken GST Registration can apply for cancellation?
Ans	Yes, can apply after Notf no. 03/2018-CT dt. 23.01.2018, Earlier, such person could not apply for cancellation before expiry of one year from the effective date of registration.

Faq's on cancellation of GST Registration

Faq's on cancellation of GST Registration

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