Cancel GST Registration Online: A Complete Guide

Introduction

Goods and Services Tax (GST) registration is mandatory for businesses exceeding a specific turnover limit. However, when a business stops operations, reduces turnover or undergoes structural changes, it may no longer be liable to collect or remit GST. This blog explains how to cancel GST registration online, covering eligibility, process, reasons, documentation and post-cancellation compliance requirements.

Obtaining a GST registration enhances a business’s financial credibility, which can be beneficial when applying for loans. Lenders often view GST-compliant businesses as more transparent and reliable. Regular GST filings also serve as proof of business turnover and stability. Therefore, maintaining an active GST registration can strengthen eligibility for a Business Loan.

Also Read: What is Business Loan: A Complete Guide

What Is Cancelling GST Registration?

Cancelling GST registration means that a business is no longer recognised as a registered entity under the Goods and Services Tax regime. Once the registration is cancelled, the business is not required to collect GST from customers or remit it to the government. The cancellation can be initiated voluntarily by the taxpayer or by the tax authorities. It applies to entities that have ceased business operations, merged, or fallen below the prescribed turnover threshold.

Who Can Cancel GST Registration?

GST registration can be cancelled by either the taxpayer or the tax officer, depending on the situation. Below are the primary categories of taxpayers who may initiate the cancellation process:

• Businesses that have closed permanently or ceased operations.
• Entities whose annual turnover falls below the GST exemption threshold.
• Businesses that have undergone a structural change such as merger, demerger or conversion.
• Taxpayers who registered voluntarily but are no longer required to be registered.
• Composition scheme taxpayers opting out of the scheme.

The tax officer may also initiate cancellation in cases of non-compliance or violations under GST law.

Step-by-Step Process to Cancel GST Registration Online

Follow these steps to cancel your GST registration online through the official GST portal:

• Visit the GST portal (www.gst.gov.in) and log in using your valid credentials.
• Navigate to ‘Services’ → ‘Registration’ → ‘Application for Cancellation of Registration’.
• Select the reason for cancellation from the dropdown list provided.
• Enter the date from which the cancellation is sought.
• Provide required details such as stock held, input tax credit reversal, and other liabilities.
• Upload supporting documents like proof of business closure or change in ownership.
• Verify the application using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
• Submit the application. Upon successful submission, an Application Reference Number (ARN) will be generated.
• Once the application is processed, you will receive an approval order, and the GSTIN will be deactivated.

Also Read: GST Registration Process: How to Apply Online

Common Reasons for GST Registration Cancellation

The following are common reasons why a taxpayer may choose or be required to cancel GST registration:

• Business closure or discontinuation.
• Annual turnover falls below the mandatory registration limit.
• Change in the nature of business or ownership.
• Violation of GST rules leading to cancellation by the officer.
• Failure to file GST returns for an extended period.
• Fraudulent activities or misuse of Input Tax Credit (ITC).

Documents and Information Required for GST Cancellation

To successfully process the cancellation of GST registration, the following documents and details are generally required:

• PAN card of the business or proprietor.
• Proof of business address (electricity bill, rent agreement, etc.).
• Bank account statement or cancelled cheque.
• Details of stock held at the time of cancellation.
• GST returns up to the date of cancellation.
• Form GST REG-16 (for taxpayer-initiated cancellation) or Form GST REG-29 (for cancellation by officer).

Cancellation of GST Registration by Tax Authorities

The tax authorities may cancel a GST registration on their own in certain circumstances. These include situations where the business is not operating from the declared place, has issued fake invoices, or has misused Input Tax Credit. Continuous failure to file GST returns, non-compliance with GST provisions, or submission of false information may also result in cancellation. Before cancellation, the officer issues a show-cause notice to the taxpayer, who must respond within seven working days.

Consequences of Cancelling Your GST Registration

Cancelling GST registration impacts the business in several ways. Once the registration is cancelled:

• The taxpayer cannot collect GST or claim input tax credit.
• Filing of GST returns is no longer permitted.
• The business loses eligibility for GST-linked benefits and schemes.
• All pending tax liabilities must be cleared before final approval.
• Non-filing of the final return may lead to penalties or legal action.

How to File Final GST Returns After Cancellation

Once GST registration is cancelled, the taxpayer must file a final return in Form GSTR-10 within three months from the date of cancellation or the order date, whichever is later. This return ensures that all liabilities are settled. Failure to file the final return may attract penalties. Steps to file GSTR-10:

• Log in to the GST portal.
• Navigate to ‘Services’ → ‘Returns’ → ‘Final Return’.
• Fill in details of closing stock, tax payable, and ITC reversal.
• Submit the form with verification using DSC or EVC.
• Download and keep the acknowledgment copy for records.

Final Thoughts

In conclusion, maintaining a GST registration is crucial not only for compliance but also for establishing business credibility, which can significantly influence loan eligibility. Cancelling GST registration is a necessary step when a business ceases operations, falls below turnover thresholds, or undergoes structural changes, ensuring that all tax liabilities are properly settled. Before applying for a Business Loan, it is advisable to assess your financial obligations post-GST cancellation. You can also use a Business Loan EMI Calculator to estimate your monthly repayments and plan your finances effectively, making informed decisions while navigating both GST compliance and loan requirements.

Apply now for Business Loan.

FAQs

Q.1. How long does it take to cancel GST registration online?

A. It usually takes 2 to 4 weeks for GST registration cancellation to be processed, depending on document verification and officer approval.

Q.2. Is there any fee for cancelling GST registration?

A. There is no government fee for cancelling GST registration, but professional service providers may charge a nominal fee for assistance.

Q.3. Can a taxpayer cancel GST registration if business is inactive?

A. Yes, a taxpayer can apply for cancellation if the business has become inactive or is no longer liable under GST.

Q.4. What happens if you do not cancel GST registration but business is closed?

A. If the business is closed and registration is not cancelled, GST liabilities may continue to accrue, leading to penalties and notices.

Q.5. Can a partnership firm cancel GST registration online?

A. Yes, partnership firms can cancel GST registration online by submitting Form GST REG-16 with the necessary documents.

Q.6. How do I check the status of my GST cancellation application?

A. You can track the application status using the ARN on the GST portal under ‘Services’ → ‘Track Application Status’.

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