The registration done with the GST Council can be cancelled by the department itself or it can also be cancelled by the individual having their own reasons. In case of the death of a registered individual, their legal heirs can apply for cancellation. On cancellation of the registration the individual has to file for a return namely final return. For example:- If an entity’s turnover is less than Rs.20 Lakh then they can opt for the cancellation of registration under GST and will be no longer liable to pay taxes.
Reasons for Cancellation
1. If there is a change in the constitution of the business
2. A person who has taken voluntary registration but hasn’t started the business within six months thereafter.
3. In case the registration has been done by illegal or unauthorized means.
4. Any registered person, other than the one paying tax under the Composition levy has not furnished any returns for a continuous period of six months.
5. A person registered under the existing laws, but the one who isn’t liable to be registered under the GST Act.
6. Any person who has violated any of the provisions or rules of The GST Act
7. Any person paying taxes under the Composition levy and hasn’t furnished any returns for three consecutive tax periods.
8. In case the business has been discontinued, death of the proprietor, amalgamation with another legal entity, demerged or otherwise disposed of.
Process of Cancellation
1. Application for the cancellation of GST has to be made in FORM GST REG 16.
2. The following details must be included in FORM GST REG 16:-
- The list of stock that is remaining on the date of the application of registration
- Details of the payment
- Any Liability thereforth
3. The GST officer must issue an order for cancellation in FORM GST REG 16 from 30 days of submitting the application. The date from which the officer announces cancellation, it will be the final date onwards which it will be effective.
Revocation of Cancellation of Registration
Revocation is referred to as the official cancellation of a decree, decision or a promise. Revocation of cancellation means that the official decision of cancellation has been reversed and the registration would still be valid for GST.
Revocation of Cancellation is only applicable in the cases where the officer has given an order to cancel The GST of a firm or an individual. The individual can therefore apply for revocation in FORM GST REG-21 of cancellation within 30 days of notice given from the tax officer.
Note: Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such leftover amount must be first paid along with interest, penalty and the tax remaining.
Consequences of Cancellation of GST
1. The firm will not have to pay GST anymore
2. If a certain business cancels GST and is still continuing its business, it will mean an offence under GST and heavy charges would apply thereforth.