Regarding cancellation of gst registration

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A B Kundu

Professional

917 Points Posted on 24 February 2019

A sole proprietor has taken GST Registration in the month of January'19 as he was told that GST registartion is must, whereas actually it's not, and his turnover is not expected to cross the threshold limit also. So, now he wants to cancel the registration.

a) Is it possible to cancel the same before expiry of 1 year as he has obtained voluntary registration?

Continuing the situation- he has purchased one computer and other accessories and book the input gst in his electronic credit ledger. Still now his output supply is nil, so, that ITC has not been availed till now.

b) Now, if the registration cancellation is possible, then what will be the effect on this ITC which has not been availed? Does he need to pay in cash?

c) If the cancellation is not possible for 1 year, then if he doesn't use such ITC against output supply, then whether after 1 year at the time of cancellation does he require to pay that unutilised/unavailed ITC in cash?

Replies (4)

Pankaj Rawat

GST Practitioner

29904 Points Posted on 24 February 2019

Yes You can cancel the Registration before 1 year

This Proviso to Rule 20 is Omitted:
Provided that no application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration.

Above proviso omited by vide Notification 3 ct 23/01/2018

Yes , the ITC in Credit Ledger will be lapse if don't have any Stock .

A B Kundu

Professional

917 Points Posted on 25 February 2019

Thank you Mr. Rawat for your response. But I didn't understand your answer regarding Point b). Please explain it. As per me, he has not utilised the credit yet, just booked in the credit ledger, then also does he need to pay such amount in cash to the department at the time of cancellation registration?