GST REGISTRATION CANCELLATION

GST REGISTRATION CANCELLATION

 

The Goods and Services Tax (GST) is a form of indirect tax that applies to the provision of goods and services in India. It has taken over various forms of indirect taxation such as excise duty, service tax, and VAT. In accordance with the GST law, there are guidelines for registering, terminating, and giving up GST registration. This article will address the steps involved in canceling GST registration.

Cancellation of GST registration refers to the procedure through which a taxpayer who is registered can terminate or relinquish their GST registration. There could be several grounds for a taxpayer to consider cancelling their GST registration, including a transformation in the business model, cessation of business activities, or amalgamation with another company.

 

TYPES OF GST REGISTRATION CANCELLATION:

In terms of GST registration termination, there are two kinds, which are Voluntary and Mandatory.

Voluntary Cancellation:

The taxpayer may choose to cancel their own tax obligations for various reasons such as shutting down their business, combining it with another, or modifying its structure.

Mandatory Cancellation:

The GST authorities will initiate the process of Mandatory Cancellation if there is non-compliance or failure to file GST returns.

 

REGISTRATION PROCESS:

The procedure for canceling GST registration can be started by either the taxpayer or the GST department itself. If the taxpayer decides to cancel voluntarily, they must submit an application through FORM GST REG-16 on the GST portal. On the other hand, if the GST department initiates the process, the taxpayer will receive a FORM GST REG-17 notice and they must reply within 7 working days.

 

The cancellation procedure for GST registration comprises of the subsequent measures:

Step 1: Application for cancellation:

In order to begin the procedure of canceling, the person who pays taxes must submit a request on the GST portal in the designated FORM GST REG-16. The person authorized to sign on behalf of the taxpayer must sign it digitally. Within the request, the taxpayer must explain the reason for cancelling and provide information about any outstanding tax liability.

Step 2: Verification by GST officer:

Upon receipt of the application, the GST official will authenticate the information submitted by the taxpayer. In case of any inadequacies, the officer may request supplementary documents or details. If the information is deemed satisfactory, the officer will grant the cancellation request through the use of FORM GST REG-19.

Step 3: Clearance of tax liability:

The GST officer will check if the taxpayer has any unsettled tax obligations prior to giving the go-ahead for the cancellation request. If there are any unpaid taxes, the taxpayer must settle them first before the request is approved. Additionally, the taxpayer must submit all overdue returns before starting the cancellation process.

Step 4: Issuance of order:

Once the cancellation application is given the go-ahead by the GST official, they will provide an order in the form of GST REG-19. The order will contain information about the cancellation’s effective date. The taxpayer will have to return the GST registration certificate within a month from the effective cancellation date.

It is crucial to understand that the procedure for cancelling GST registration is not instant and could take approximately a month to finish. Moreover, the taxpayer must continue submitting GST returns until the date of cancellation becomes effective.

If the taxpayer passes away and their registration needs to be cancelled, the taxpayer’s legal heirs can request this by completing FORM GST REG-16 and including a death certificate.

 

DOCUMENTS REQUIRED:

To cancel GST registration, specific paperwork must be submitted.

  • GST registration certificate
  • A duplicate of the FORM GST REG-16, used for requesting cancellation of GST registration.
  • The GST officer may ask for additional documentation as necessary.

 

COST AND TIME INVOLVED:

Canceling a GST registration is free of charge. The duration of the cancellation procedure is not fixed, and it depends on multiple factors such as verification procedure by the GST officer, resolution of tax responsibility, and the issuance of an order. The entire cancellation process may take approximately thirty days.

ADVANTAGES:

The benefits of cancelling GST registration comprise:

  • There is no requirement to submit GST returns or make GST payments after the date of cancellation’s implementation.
  • There will be no responsibility for paying any fines or additional fees due to failing to comply with or submit GST returns.
  • There is no necessity to keep records and accounting books for the Goods and Services Tax (GST).

 

DISADVANTAGES:

There are several drawbacks of canceling GST registration:

  • Not being able to assert credit for the amount of tax paid for input after the cancellation date becomes applicable.
  • Inability to collect GST from customers
  • If one fails to comply or file GST returns before cancellation, there will be legal repercussions.

 

LEGAL REQUIREMENTS:

To cancel a GST registration, certain legal obligations must be fulfilled. Firstly, the individual must complete FORM GST REG-16 for application and pay off any unsettled tax debts before the cancellation date. Additionally, all GST returns that have yet to be filed should be submitted before beginning the cancellation procedure.

RULES:

The Goods and Services Tax Act of 2017 regulates the guidelines for the cancellation of GST registration. The procedure for cancellation is comparable to the process of GST registration because the taxpayer has to furnish all the required information and paperwork.

 

LEGAL CONSEQUENCES:

Failure of the taxpayer to follow regulations and guidelines for cancellation of GST registration may result in legal ramifications. They could be charged penalties and additional fees for neglecting to comply or file GST returns. Furthermore, the GST authorities could take legal measures against the taxpayer for non-complying behavior.

 

CONCLUSION:

To sum up, canceling GST registration is a step taken by a taxpayer who wants to surrender their registration. The process comprises submitting an application on the GST portal, verification by a GST officer, settling any outstanding taxes, and receiving an order. The taxpayer must submit GST returns until the date of cancellation. Properly adhering to the procedure is crucial to prevent any legal or financial problems.

 

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