How to Cancel GST Registration

How to Cancel GST Registration

You cancel a GST registration online on the government portal at gst.gov.in, by filing Form GST REG-16. There is no government fee to cancel. Once it is done, your GSTIN is deactivated, you stop charging GST, and you can no longer claim input tax credit.

Before you go further, it helps to know that people use the word cancellation for three different things, and they are not the same:

• Voluntary cancellation is when you apply to cancel your own registration, because your business has closed, your turnover has fallen, or your business structure has changed.
• Suo moto cancellation is when the department cancels your registration, usually because of non-filing or non-compliance. You get a notice first.
• Revocation is the reverse. It is when you ask the department to undo a suo moto cancellation and bring your registration back.

This page covers all three. Most readers want the first one, so we start there. If you are new to GST altogether, the GST registration page covers the basics.

When You Should Cancel Your GST Registration

There are a handful of genuine reasons a business applies to cancel. Knowing which one is yours matters, because the portal asks you to pick a reason.

• The business has closed. You have stopped operating and do not intend to continue. Holding a live registration just adds return filing you no longer need.
• Turnover has fallen below the threshold. If your turnover has dropped under the limit that made registration compulsory, and you registered only because you had to, you can apply to cancel.
• The business structure has changed. A merger, a transfer of the business, or a change such as a proprietorship becoming a private limited company. In these cases the old GSTIN is cancelled and a new registration is taken for the new entity.
• Death of the proprietor. For a proprietorship, the registration is cancelled on the death of the proprietor, and the successor takes a fresh registration if the business continues.
• Voluntary registration is no longer worth it. If you registered by choice and the compliance is now more trouble than the benefit, you can cancel, provided you meet the conditions.

One thing to be clear about. If the business has simply stopped but you have not cancelled, the return filing obligation does not stop on its own. You have to actually apply for cancellation to end it.

How to Cancel GST Registration Online

The whole thing is done online. There is no form to post. Here are the steps.

1. Log in at www.gst.gov.in with your username and password
2. Go to Services, then Registration, then Application for Cancellation of Registration
3. Select the reason for cancellation from the list, such as discontinuation of business or change in constitution
4. Fill in the details the portal asks for, which depend on your reason. This can include the date from which you want the cancellation, and details of any stock you are holding.
5. Give the details of any tax payable on your closing stock, if it applies
6. Verify and submit using DSC or EVC

On the portal this application is Form GST REG-16. Once you submit it, you get an ARN, which is your reference to track the cancellation. The details the portal asks for change depending on the reason you pick, so choose the correct reason first.

Does It Cost Anything to Cancel?

The government does not charge a fee to cancel your GST registration. If you handle it yourself on the portal, there is no cost from the department.

What actually matters more than a fee is what you have to settle before the cancellation goes through. You are expected to clear any tax, interest, or penalty that is due, and there is a final return to file after cancellation, which we cover further down. So while there is no cancellation fee as such, do not assume cancelling means you owe nothing. Any pending dues have to be dealt with.

If you use a professional to handle the cancellation for you, they charge for their service, but that is separate from any government fee, which does not exist here.

What Happens After You Apply

Once you submit the cancellation application, the officer reviews it. If everything is in order, the officer issues a cancellation order, and your GSTIN is cancelled from the date decided.

On the portal, this cancellation order is issued in Form GST REG-19. You can follow the progress of your application using the ARN on our GST ARN status page, which explains what each status means. The order itself can be viewed and downloaded from the portal, the same way as other certificates, which we cover on the GST certificate download page.

Suo Moto Cancellation - When the Department Cancels

Suo moto cancellation is when the GST department cancels your registration on its own, without you applying. Suo moto simply means the department acts on its own motion.

This does not happen out of nowhere. It is usually triggered by something on your side, such as:

• Not filing your returns for a continuous period
• No business being carried on from the place you declared
• Issuing invoices without an actual supply of goods or services, which points to fake billing
• Other serious non-compliance with the GST rules

The important protection to understand is that the department cannot simply cancel your registration without warning. It has to first issue a show-cause notice, in Form GST REG-17, telling you why it proposes to cancel and giving you a chance to reply. If you reply properly and fix the issue, the cancellation can be dropped.

There is one more honest point worth knowing. A cancellation notice is supposed to actually state the reason for the proposed cancellation. A notice that is vague and does not specify what you have done wrong is on weak ground, and such notices have been set aside when challenged, because you cannot properly defend yourself against a reason you were never told. So if you receive a show-cause notice that says nothing specific, it is worth getting it looked at rather than assuming the cancellation is final.

Revocation - Bringing a Cancelled Registration Back

Revocation is the reverse of cancellation. It is how you ask the department to undo a cancellation and bring your registration back to life.

The key thing to understand is that revocation applies only where the department cancelled your registration on its own, that is, a suo moto cancellation. If you cancelled voluntarily yourself, you do not revoke it, you simply take a fresh registration if you need one again.

To apply for revocation, you file Form GST REG-21 on the portal. A few things go with it:

• There is a time window within which you have to apply after the cancellation order
• You must first file all your pending returns and clear any dues, because your revocation cannot go through while returns are outstanding
• The officer reviews your application and, if satisfied, approves it in an order, and your GSTIN is restored

VERIFY: confirm the exact time window for filing a revocation application, including any extended window, against the current rule before stating specific day counts here.

Revocation is worth acting on quickly, because the window is limited. If you have had a registration cancelled by the department and you still need it, do not sit on it, because letting the window pass makes it much harder to get back.

After Cancellation - What You Must Still Do

Cancelling your registration is not the end of your obligations. A few things still have to be done, and people are often caught out by them.

• File the final return. After cancellation, you have to file a final return in Form GSTR-10 within the time limit. This is separate from your regular returns and it is mandatory. Missing it leads to notices.
• Stop charging GST. From the date of cancellation, you must not raise a tax invoice or charge GST. Doing so after cancellation creates a problem.
• Reverse input tax credit on closing stock. You may have to pay back the input tax credit tied to the stock you are holding on the date of cancellation. This is the part people do not expect, so account for it.
• Keep your records. Your GST records have to be kept for the period the law requires, even after the registration is cancelled.

VERIFY: confirm the time limit for filing the final return in Form GSTR-10, and the record retention period, against the current rules before stating specific numbers here.

Get Help Cancelling or Reviving Your GST

Whether you need to cancel a registration cleanly, or you have had one cancelled by the department and want it back through revocation, we can handle it for you. The final return, the input tax credit reversal on closing stock, and a revocation within the window are the parts that trip people up, and they are worth getting right.

Call +91 99530 04880 or write to info@efilingcompany.com and tell us where you stand.