GST Surrender on voluntary basis

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This discussion explores the possibility of voluntarily surrendering a GSTIN when projected turnover for the current year falls below the registration limit or if all supplies are exempt. While some initially suggest it's only possible upon business closure, others clarify that cancellation is permissible if the estimated turnover remains below the threshold or if all supplies are nil-rated or exempted. It's highlighted that this is a business decision based on genuine reduction in activity, and while de-registering and re-registering might seem like an option, it's generally discouraged due to the administrative hassle of obtaining a new GSTIN.

naveen

naveen (Querist)

27 March 2023 Can we surrender gstin if my projected turnover will be less than 40 lakh this year.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2023 Not possible, unless you shut down the business completely.

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naveen

naveen (Querist)

27 March 2023 Sir,
thanks for replying.
still can I surrender gstin if my all turnover would be exempted/nil rated.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2023 There is no such provision in act. You may close & restart the activity, that could be one of the options.

CA Altamush Zafar

CA Altamush Zafar (Expert)

28 March 2023 Yes you can surrender the GSTIN if your turnover falls below registration limit. You can also surrender if all your supplies are exempted.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2023 The query is based on estimated/projected data for current year and not based on preceding year data.

CA Altamush Zafar

CA Altamush Zafar (Expert)

28 March 2023 Registration is taken if turnover limit exceeds of current year and not preceding year

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2023 It is well understood when the querist asks for surrender of registration means he is not asking for new registration in current year.

CA Altamush Zafar

CA Altamush Zafar (Expert)

28 March 2023 Yes but if he knows that his business has reduced and that his turnover will not exceed the threshold he can apply for cancellation.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2023 Good loophole in the act. We would cancel the registration of our clients based on the assumption/estimation of current year (whatever be the turnover in preceding year) and re-register whenever the turnover exceeds the limit.
Thank you for the suggestion.

CA Altamush Zafar

CA Altamush Zafar (Expert)

28 March 2023 It is no loophole
It is a totally business decision to surrender registration if turnover below threshold.
It is totally unwise to de-register and re-register since every time a new gst number will be generated and difficult to update it with all vendors and authorities.
It is a facility which should be taken when a genuine reduction of business has taken place and the decision is to be taken rationally.

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