Introduction
Cancellation of a GST registration is a formal process with rigid procedures within which it has to operate. CBIC has clearly defined instructions on this. Moreover, all tax liabilities need to be paid upfront as a pre-condition to cancellation.
Steps to Cancel GST Registration
File Final Returns
- GSTR-10: This is the final return that has to be filed declaring all outstanding tax liabilities and claiming such any remaining input tax credit.
- GSTR-9: This is an annual return summing up all the transactions for the financial year.
- GSTR-9C: This reconciliation statement brings together all the GSTR-1 filed returns of a year with the annual return GSTR-9.
Click Here for- GST Returns Filing
Submit Application for Cancellation
- Online Filing: Through the GST portal using GST REG-16.
- Provide Details: Details concerning GSTIN, PAN, and reasons for cancellation.
- Supporting Documents: Documents needed are proof for business closed down or if activities have been stopped.
Verification and Approval
- Section 30 Compliance: Verification of the application and the supporting documents by the tax officer.
- Approval Order: On satisfying the approval, the officer shall make an order under subsection of Section 29 for the cancellation in form GST REG-19.
Key Issues
- Processing Time: Normally, the period of cancellation comes into play after 30 days since the application is made.
- Arrears of Liabilities: All tax liabilities of the taxpayer, be it GST, TDS, and TCS, are to be paid before the cancellation is finally enforced.
- Cancellation Revocation: An application for revocation can be submitted for cancellation in case of a change in circumstances using Form GST REG-21.
- Post-Cancellation Liabilities: Even after cancellation, some liabilities would remain in subsistence, such as record maintenance for a specific period.
Conditions for GST Registration Cancellation
Business Closed Permanently
When the business is permanently closed.
Business Restructuring
When the business structure undergoes a change so that the need for a requirement of GST registration no longer persists.
Turnover Below Threshold
When the annual turnover dips below the threshold point for the purpose of GST registration.
Migration to Other Tax Regimes
If the business migrates to another taxing regime, say, state-specific tax.
Aftermath of Non-Cancellation
Loss of Penalty and Interest
After failing to file the returns, there will be penalties and interest.
Legal Problems
In extreme cases, legal proceedings may be initiated.
Destruction of Business Reputation
Unserved tax liabilities destroy the reputation of the business.
Seeking Professional Help
If you are still confused about what to do or in case your tax implications are complex, then take advice from a tax professional or chartered accountant. They will lead you throughout the cancellation process and provide you with advice to avoid violating tax laws.
Then by following these steps and taking into consideration the important factors, you may be able to cancel your GST registration before running into potential legal and financial consequences. Once cancelled, it is not possible to reactivate the same with respect to the same PAN and Legal Name. So if you intend to resume your business under the same name and PAN, you would require a fresh GST registration.
Communication with Tax Authorities
Show proper communication regarding cancellation to the tax authorities.
Record Maintenance
Keep a proper record of all financial transactions, GST returns, and other records.
Professional Help
Take professional help so that one is not confused with the complex process and avoids probable pitfalls.
Stay Updated
Take consideration of all the latest GST rules and regulations as they keep on changing with time.
Possible Problems and Solutions
Technical Gaffe
The website of the GST portal may face technical issues. Wait and try after some time, or you may even seek help from the tax officers.
Multi-Step Procedures
The cancellation procedure can be two-step or more with documentation. Ensure that the papers are in order and correct guidance is followed.
Timing
Ensure timely submission of returns and cancellation applications within time.
Data Security
Proper care is to be taken by way of sensitive information like PAN and bank details while logging into the GST portal.
After Effects of Cancellation of GST
Registration
If you are looking forward to reviving your business, then registration for GST will be required again.
Credit Score
Any non-payment or non-compliance with other taxes might reduce your creditworthiness.
Legal Consequences
GST non-payment might attract legal proceedings along with a penalty.
As long as you follow these simple steps, take into account professional guidance, and have a hassle-free registration cancellation process for GST.
Conclusion
GST cancellation is a very formal process, and the strictest detail should be observed and followed. Such formalities take place in prescribed procedures. A business should get knowledge of how to make the first steps, prepare the required documents, and then seek professional counsel to navigate the cancellation process. Also, it is quite important that all tax liabilities are cleared before cancelling the process so that complications do not arise later.
Share This Post
