Cancellation of registration under the Goods and Services Tax (GST) Act, 2017, refers to the process of removing a person from the GST registration database. This means they are no longer obligated to comply with GST filing and payment requirements. There are two main avenues for cancellation:

1. Voluntary Cancellation:

• Who can initiate: A registered person can voluntarily apply for cancellation if they no longer meet the registration criteria (e.g., turnover falls below the threshold), cease business operations, or merge with another business GST Act 2017.
• Procedure: The registered person files an application electronically in Form GST REG-29. If approved, the cancellation takes effect from the date specified in the application.

2. Cancellation by Tax Officer:

• Reasons for initiation :The tax officer can initiate cancellation proceedings on various grounds, including:
  • Failure to furnish GST returns for three consecutive tax periods.
  • Supplying incorrect information in the registration application.
  • Evasion of tax or fraudulent practices.
  • Casement of business activities without informing the tax authorities GST Act 2017.
• Procedure: The tax officer issues a show-cause notice (Form GST REG-17) specifying the reasons for potential cancellation. The registered person has the right to respond and defend their case within seven working days. If the explanation is not satisfactory, the officer may pass an order cancelling the registration (Form GST REG-19).

Important points to remember:

• Registration cancellation does not absolve the taxpayer from any outstanding tax liabilities, penalties, or interest accrued before the cancellation date.
• They must discharge all GST-related obligations for the period they were registered.
• Cancellation may also restrict eligibility for future GST registration depending on the reason for cancellation GST Act 2017.

If you have specific questions about cancellation under your particular circumstances, I recommend consulting a qualified tax professional or visiting the official GST website for detailed information and the latest updates.

I hope this clarifies the concept of cancellation of registration under the GST Act. Please let me know if you have any further questions GST Act 2017.

EXAMPLE

The process for cancellation of GST registration under the GST Act, 2017, is largely the same across all states in India. However, some specific examples with regards to cancellation scenarios might differ based on your state’s GST department rules and interpretations. Here are some examples of cancellation in different situations:

Voluntary Cancellation:

Example 1 (Tamil Nadu): A small textile shop in Chennai, Tamil Nadu, with annual turnover below the threshold for mandatory GST registration under GST Act 2017 decides to close down permanently. The owner can apply for voluntary cancellation of their GST registration through the online portal using Form GST REG-16. They will need to file the final return (GSTR-10) and clear any outstanding tax liabilities before the cancellation is processed.

Suo Moto Cancellation by GST Officer:

Example 2 (Maharashtra): A restaurant in Mumbai, Maharashtra, has not filed any GST returns for the past six months. The GST officer issues a show-cause notice (Form GST REG-17) to the restaurant, inquiring about the non-filing and asking for clarification. If the restaurant fails to provide a satisfactory response or continues to not file returns, the officer can initiate suo moto cancellation of their GST registration under Section 29(2) of the CGST Act GST Act 2017.

Cancellation due to Change in Business Constitution:

Example 3 (Karnataka): A partnership firm in Bangalore, Karnataka, decides to dissolve and form two separate individual enterprises. Both new entities fall below the threshold for mandatory GST registration. They can apply for cancellation of the partnership firm’s GST registration through Form GST REG-19, along with providing relevant documents like the dissolution notice and new entity registration certificates.

It’s important to note that these are just a few examples, and the specific procedures and requirements for cancellation may vary depending on your state and the reason for cancellation. I recommend you consult with a chartered accountant or tax advisor familiar with GST regulations in your specific state for detailed guidance and assistance GST Act 2017.

FAQ QUESTIONS

1. What does cancellation of GST registration mean?

Cancellation of GST registration simply removes a taxpayer from the Goods and Services Tax (GST) system. They are no longer obligated to file GST returns, collect and deposit GST, or maintain GST records. However, it doesn’t absolve them of any prior GST liabilities.

2. When can my GST registration be cancelled?

There are two main scenarios:

• By the taxpayer :You can voluntarily surrender your GST registration under GST Act 2017  if you cease to be liable for GST, for example, if your turnover falls below the threshold. This needs to be done through Form GST REG-14.
• By the tax officer :The proper officer (GST department official) can initiate cancellation proceedings if you don’t meet the registration criteria, violate GST rules, fail to comply with regulations, or furnish incorrect information. This involves a show-cause notice, your response, and a final decision by the officer.

3. What happens after my GST registration is cancelled under GST Act 2017?

• You’ll receive an order of cancellation from the tax department.
• You’ll still need to complete any pending GST returns and pay any outstanding dues before the cancellation date.
• You’ll need to clear any input tax credit used by adjusting it in the electronic cash ledger or credit ledger, whichever is higher. This involves paying the equivalent amount as output tax, potentially impacting your finances GST Act 2017.

4. Can I get my GST registration reinstated after cancellation?

Yes, you can apply for revocation of cancellation within 30 days of the cancellation order. You’ll need to submit Form GST REG-21 and fulfill any conditions set by the officer, such as furnishing missing returns or clearing dues GST Act 2017.

CASE LAWS

The cancellation of registration under the Goods and Service Tax Act (GST Act), 2017, is governed by Section 29 of the Act, read with Rule 21 of the Central Goods and Service Tax Rules, 2017. Here’s an overview of the relevant case laws:

Grounds for Cancellation:

• Suo Moto Cancellation by Tax Authorities:
  • Non-filing of GST returns for six consecutive tax periods: This is the most common ground for cancellation, as per Section 29(2)(b) of the Act. However, a recent notification allows revocation of cancellation till December 31, 2022, for certain cases.
  • Fraudulent practices :Issuing fake invoices, claiming fake Input Tax Credit (ITC), etc., fall under this category (Section 29(2)(a) under GST Act 2017.
  • Cessation of business :Cases where the business activity stops indefinitely (Section 29(1)).
  • Death of the registered person: The legal heirs must surrender the registration certificate (Rule 21(5)).
• Voluntary Cancellation :The taxpayer can apply for cancellation if the GST rules no longer apply to them, for example, due to income falling below the threshold (Section 27) GST Act 2017.

Important Case Laws:

• Kerala High Court (2023):Held that the Superintendent of Central Tax should make independent decisions on cancellation, not be influenced by directions from other authorities.
• Allahabad High Court (2023):Reiterated that cancellation can only be done under Section 29 and Rule 21, not based on any other law.
• Bombay High Court (2020):Ruled that denial of ITC due to supplier’s cancellation is not justified if the transaction itself was genuine under GST Act 2017.

Additional Points:

• The taxpayer has the right to appeal against the cancellation order to the appellate authority and then to the High Court.
• There are specific timelines for filing appeals and responding to notices.
• It’s crucial to consult a tax professional for legal advice and guidance specific to your situation.

I hope this summary provides a helpful starting point. If you have specific questions about a particular case or situation, please provide more details, and I can do my best to assist you further under GST Act 2017.