Cancellation and Suspension of GST Registration: Causes and Procedures

The GST registration can be canceled or suspended for certain specified reasons. The cancelation can be initiated by the registered person or by the department on their motion. In case of the death of the registered person under GST, their legal heirs can apply for cancellation.

Reasons for Cancellation

The reasons that may lead to the cancellation of GST registration are mentioned below:

• A person who is not liable to be registered under the GST Act, but got registered under the same.
• In case, the business dissolved or was transferred fully for any reason like the death of the proprietor, amalgamated with another legal entity, etc.
• If there is a change in the establishment of the business.
• When the registered person is no longer liable to be registered.
• When the registered person has contravened such provisions of the Act or the rules made thereunder.
• In case the taxable person under the Composition levy or any registered person, other than a person paying tax under the Composition levy has not furnished returns for three consecutive tax periods.
• Any person who took voluntary registration under sub-section (3) of section 25 and has not commenced business within six months from the date of registration.

In case, the registration was obtained via fraudulent means, willful misstatement, or misleading facts.

Procedure of Cancellation of GST Registration

• A registered person under any of the existing laws who is no longer liable to be registered under the GST Act has to submit an application electronically at the common portal for the cancellation of registration granted to persons. Next, the Superintendent of Central Tax 11GST FLYERS shall conduct an inquiry as deemed fit and cancel the said registration.
• If the Superintendent of Central Tax has reasons to believe that the registered person is liable to be canceled, a notice will be sent to the concerned person in FORM GST REG-17. The person will be required to show cause as to why his registration shall not be canceled, within 7 working days from the date of the service of such notice.
• If the reply to the show cause notice is considered to be satisfactory, the Superintendent of Central Tax will drop the proceedings. Alongside this, an order in FORM GST REG –20 will be passed.
• In addition to this, when the person who has already applied for cancellation of his registration is no longer liable to be registered or the registration is liable to be canceled, then, the Superintendent of Central Tax will issue an order in FORM GST REG-19 within thirty days from the date of application.
• Furthermore, once the registration is canceled, the registered person shall pay an amount, equivalent to the credit of input tax held in stock and contained in semi-finished or finished goods or plant and machinery or capital goods on the day that immediately precedes the date of such cancellation.
• In the case of capital goods or plant and machinery, the taxable person will have to pay an amount equal to the input tax credit on the said capital goods or plant and machinery.

Please Note: The process of registration cancellation will not affect the liability of the person to pay the tax and other dues for any period prior to the date of cancellation.