GST Cancellation without penalty, Revocation and Re- Registration - GST Registration, GST cancellation, GST Return Filing

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GST Cancellation without penalty, Revocation and Re- Registration



  GST Cancellation without penalty

  • Filing GST cancellation application without penalty
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GST Registration cancellation without penalty

If a taxable person is no more liable to pay tax, he can chose GST cancellation without any penalty option. Cancellation of GST registration means the taxpayer will not be GST registered person. The GST department cancel the GSTIN issued to a taxpayer. If business activities continue to function despite the GST cancellation, it would liable to heavy penalties.

Reasons for GST Cancellation

Main reasons for  GST Cancellation are followings:


  • Registered person turnover is below the threshold limit.
  • Change in the constitution of Registered person, say from partnership to company or individual
  • Death of proprietor
  • Registered person closed down the taxable business activities.
  • Registered person has shifted its office from one state to another state, Therefore, a need arise for surrender of the old registration. 
  • Due to technical error in the system, the registered person has been issued multiple registrations for the same address. In the case, the additional registration is required to be surrendered.
  • GST cancellation by department for return defaulters


Penalty for non-compliance

Penalty for late GST cancellation is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day*. The maximum is Rs. 10,000


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(GST Cancellation without penalty, Revocation and Re- Registration under GST)


GST cancellation without penalty process

GST cancellation can be initiated by following 3 ways:


  1. Voluntary Cancellation of GST Registration by Registered Person
  2. Legal heirs apply for cancellation of a registered person in case of deceased of registered person.
  3. Cancellation of GST Registration by GST Officer


Way-1

Procedure for voluntary cancellation of GST  by Registered Person

Registered person who wish to surrender GST registration shall file their application on-line using the GST module on www.gst.gov.in

After submission of the online application, the Assessing officer may require further information like reconciliation of the income shown in the Profit & Loss Account with the taxable income details declared in GSTR-3B & GSTR-1 returns, Closing stock details, Sundry creditor details etc.

Registered person should submit the require documents with proper indexing of all enclosure. As far as possible all these documents will be verified by the Assessing officer at time of its submission itself. In case of any deficiency, the same shall be informed to the registered person at the time of receipt of the documents. It may note that if the registered person fails to submit the complete set of hard copy, it liable to be rejected. 

The Registered person officer shall process the application for cancellation of registration and after successful cancellation of the registration, will inform the registered person through e-mail.

In case of any difficulty, Assessment Commissioner / Deputy Commissioner of the concerned division may be approached for the resolution of grievance. 

Pending Tax Liability

As per Section 29 (5) of the CGST and SGST Act, 2017, every registered person whose registration is cancelled shall pay pending tax liabilities. The cancellation of GST will not affect it.

If your registration is cancelled, you will be liable to pay equivalent to higher of: 

For Stock in hand:

  • The input of Stock of goods on the day immediately before the date of cancellation or
  • Output tax payable on stock of goods


For capital goods:

  • The input credit taken on such capital goods, reduced by a certain percentage or
  • Tax payable on transfer value of such capital goods


Way-2

Procedure for Surrender / Cancellation of GST Registration by Legal Heirs

If in case, a registered person is deceased, Legal heirs of taxpayer can apply for GST cancellation without penalty, by file their application on-line using the GST module on www.gst.gov.in . The death certificate of the proprietor needs to be enclosed along with the application form

Way-3

Procedure for cancellation of registration by GST officer

The GST officer can cancel GST registration of a registered person for following reasons: 

  • Failing to file tax return under composition leavy: in cases of Composition tax payers who had failed to file returns for 3 consecutive return periods (Section 29 (2) (b)) 
  • Failing to file tax return by a normal registered person: Regular tax payers who had failed to file returns for a continuous period of 6 months (Section 29 (2) (c)) 
  • Obtaining Registration by Fraud: The GST registration gets cancelled if the same has been obtained by means of fraud, misstatement or suppression of facts.
  • The taxable person does not conduct business from the place of business declared during registration 
  • The taxable person issues invoices without any supply of goods or services

To cancel the registration of taxable person, the GST officer is required to follow the below give process:
  • GST officer send show cause notice to concern registered person in FORM REG-17
  • The reply to the show cause notice issued under sub-rule (1) shall be furnished online in FORM REG–18 within the period 7 working days from the date of service of the notice
  • Where the tax payer instead of replying to the notice served, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee. The GST officer shall drop the proceedings and pass an order in FORM GST-REG 20, if he finds the reply satisfactory. 
  • However, If the tax payer fails to furnish all the pending returns and makes full payment of the amount due or fails to justify, why GST registration should not be cancelled,  the proper officer will issue an order in FORM GST REG-19. The order will be send within 30 days from the date of reply of the show cause. 


Revocation for cancellation under GST

A registered person, whose registration is cancelled by the GST officer, may submit an online application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of 30 days from the date of the service of the order of cancellation of registration.

Process of Revocation under GST


  • A registered person submit an online application for revocation of cancellation in FORM GST REG-21, on GST portal
  • If the GST officer is satisfied, he can revoke the GST cancellation by an order in FORM GST REG-22, within 30 days from the date of receipt of application for revocation. Reason for revocation of GST cancellation must be recorded in writing. 
  • If the tax officer is not satisfied with reason, he can reject the application of revocation  by an order in  FORM GST REG-05. Before rejecting the application, the tax officer must issue a show cause notice in FORM GST REG-23 for the applicant to ask why the application should not be rejected. The registered person must reply in FORM GST REG-24 within 7 working days from the date of the service of the notice
  • The tax officer is required to take a decision within 30 days form date of receipt of reply from the tax applicant in FORM GST REG-24

Caution: If you are a GST Registered person and having stock in hand and by mistake or unawareness of GST law your GST registration is cancelled, it is suggested that before proceeding towards submitting any reply to GST Officer, please consult GST Expert. GST Department is very strict in GST Cancellation and Revocation Process; a wrong reply may cancel your GST Number which may be harsh to the registered person according to its Stock holding and its GST liability on his stock in hand.

Final Return

As per Section 63 of the CGST and SGST Act, 2017, in cases where the tax payer whose GST  cancelled, fails to file Final Return in GSTR -10 within 3 months of the date of cancellation or date of order of cancellation, whichever is later, late filing penalty of  INR 100 for every day during which the failure continues, subject to a maximum of Rs. 10000/- is applicable.

Re-Registration under GST India

A taxpayer can apply for  Re-Registration under GST India, If:
  • Business with turnover above the threshold limit of Rs. 40 Lakhs*
  • Casual taxable persons
  • Non Resident taxable persons
  • Agents & Input service distributor
  • Person paying tax under the reverse charge mechanism
  • Person who supplies via e-commerce
  • Inter state suppliers
  • Exporter of Goods & Services

Rejection: An GST officer can reject an application of fresh registration, if the applicant found to have a registration cancelled by an GST officer, and the applicant has not filed for the revocation of the same or GST officer is not satisfied with the reason of application of revocation.

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