GST Registration Cancellation

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Cancellation of GST Registration:

GST registration can be canceled through various means: by the registered person themselves, by a GST officer, or by the legal heirs in the event of the registered person’s demise. When GST registration is canceled, it signifies that the individual is no longer registered under the GST system and is not obligated to remit or collect GST.

Cancellation of GST registration can occur either at the initiative of a GST officer or voluntarily by the registered person. Once the GST registration is canceled, the taxpayer is no longer liable to pay GST.

Continuing to conduct business after surrendering GST registration is considered a violation of GST regulations, and substantial penalties may be imposed. In such cases, there is no obligation to file any GST returns.

Who Has the Authority to Cancel GST Registration?

GST registration can be canceled by a GST officer in the following situations:

  • The registered individual under GST does not conduct any business from the declared place of business.
  • The registered person issues invoices or bills without supplying goods or services, thereby violating GST laws and rules.
  • The person with GST registration fails to file GST returns for a continuous period of six months.

Before canceling the registration, the GST officer will issue a notice to the taxpayer whose GST registration is liable for cancellation, giving them seven working days to respond to the notice.

Alternatively, GST registration can be voluntarily canceled by the person registered under GST under Section 29 of the CGST Act for the following reasons:

  • Discontinuation or closure of the business.
  • Transfer of business, amalgamation, merger, de-merger, lease, or other relevant reasons.
  • Change in the business’s constitution that results in a change of PAN.
  • The turnover falls below the GST registration threshold limit.
  • In the case of a sole proprietorship, the death of the sole proprietor.
  • Any other valid reason must be substantiated in the application for cancellation.

When is it mandatory to register for GST?

GST registration becomes obligatory under the following circumstances:
For Businesses Dealing in Goods:
When the total turnover exceeds Rs. 40 lakhs (or Rs. 20 lakhs if located in North Eastern states and Uttarakhand).
For Service Providers:
When the turnover surpasses Rs. 20 lakhs (or Rs. 10 lakhs if situated in North Eastern states and Uttarakhand).
In addition to the turnover-based criteria, there are specific business categories for which GST registration is mandatory, regardless of their turnover:
Casual Taxable Person or Input Service Distributor.
Non-Resident Taxable Person.
Suppliers engaged in interstate supply of goods and services.
Entities liable to pay tax under the reverse charge mechanism.
Suppliers selling goods through an e-commerce portal.
TDS/TCS deductors.
Providers of online data access or retrieval services.

Can a person voluntarily register himself under GST?

Certainly, an individual has the option to voluntarily register under GST. Upon registration, all the provisions of the Goods and Services Tax Act will be applicable to that individual, just as they are to a registered taxable person.

What is the validity of GST certificate?

Once a GST certificate is issued, it remains valid for a lifetime, unless certain conditions are met, such as surrendering the certificate, cancellation, suspension, or revocation.

Can an Unregistered Person Collect Tax and Avail Input Tax Credit?

No, an individual without GST registration is not permitted to collect Goods and Services Tax (GST) from their customers, nor can they claim any input tax credit for GST payments made by them.

Is Monthly GST Return Filing Mandatory Even with No Business Activity?

Once an individual has completed their GST registration, they are obligated to file monthly returns, even if they have no transactions to report for a particular month. In such cases, a Nil return must be submitted. Failure to file returns on time or not filing them at all can result in substantial penalties.

What are the GST rates in India?

In India, the GST rates for a wide range of goods and services are categorized into four slabs: 5% GST, 12% GST, 18% GST, and 28% GST.