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What Is GST Cancellation and When Do You Need It?

Cancellation of GST means your present GST registration, i.e. the GSTIN, is closed and marked as inactive at the GST portal. Once cancelled, you will not be required to file any more GST returns or charge GST on your sales.

An inactive GSTIN occurs when the registered taxpayer applies for cancellation or when it is cancelled by the department on grounds of non-compliance.

You may need GST cancellation in the case of the closure of a business, or if your turnover is below the threshold limit, or a change of structure, or for any such reason, you no longer need a GST number. In all such cases, applying for cancellation of the GST registration keeps your record clean and clear.

When Should a Business Cancel GST Registration?

Business discontinued or closed

If your business has ceased operations permanently, you should cancel the GST registration to avoid further compliance.

Turnover is less than the threshold

If your annual turnover is below the limit at which GST registration is compulsory, then you can apply for a cancellation online.

Change in business structure

When the proprietorship is converted into a company or LLP, or when the ownership changes, cancellation of old entities under GST is required.

Transfer or merger of a business

If the business is sold, transferred, or merged with another entity, the already obtained GSTIN should be cancelled.

Incorrect GST registration details

You may need to cancel if the business was registered under the wrong category or details. Apply afresh after cancellation.

Voluntary cancellation of GST online

In cases where GST registration is not required, taxpayers may choose cancellation voluntarily.

Mandatory and Voluntary GST Cancellation Explained

Voluntary cancellation by the taxpayer

You can cancel your GSTIN in case you no longer require registration due to the closure of your business or turnover below the limits.

Department-initiated Cancellation

Non-filing of returns for a continuous period or violation of any rules can result in cancellation of your registration by the GST department.

Non-compliance​‍​‌‍​‍‌ cancellation

Cancellations that are compulsory include those that result from the failure to file returns within the stipulated time, the use of incorrect documentation, or the misuse of GSTIN.

Cancellation in the composition schem.

If a taxpayer under the composition scheme becomes ineligible or decides to opt out and return to the regular scheme, it is necessary to cancel or amend the GST.

Step-by-Step Process on How to Cancel GST (Online)

Step 1: Fill in the Key Business Information

Furnish your GSTIN, business details, as well as the reason for cancellation.

Step 2: Ensure all GST Returns are Up to Date

Any outstanding GSTR-3B or GSTR-1 should be submitted before applying.

Step 3: Provide the Necessary Files

Upload closing proof, stock details, financial statements, or any other relevant documents.

Step 4: File Your Cancellation Request on the GST Portal

Through your login, we file the cancellation request (Form REG-16).

Step 5: ARN Generation, and Follow-Up/Tracking

An Application Reference Number is generated, and the applicant can track the progress or status.

Step 6: GST Officer’s Final Approval

The officer verifies the facts and then communicates the official cancellation order.

Your Law Place works with you hand-in-hand to effect your entire GST cancellation.

Documents Required for GST Registration Cancellation

• GSTIN and login credentials
• Proof of business closure (if applicable)
• Final stock details
• Last filed GST returns
• Identity documents of the proprietor or partners
• Authorisation letter (if a consultant files on your behalf)

Who Can Apply for GST Cancellation Online

Proprietors

Individual and small-scale businesses that have been closed or have changed their business model.

Partnerships

Partnership firms that are going for a reorganization or are closing their ​‍​‌‍​‍‌businesses.

Companies

Private or public companies changing business type or merging.

Composition taxpayers

Composition scheme for taxpayers who have lost eligibility.

Non-resident taxpayers

Temporary foreign businesses that have completed their operations.

Casual taxable persons

Short-term companies that are no longer operating.

GST Cancellation After Closing Your Business

When a business is closed, the owner is required to:

• Ensure all pending GST returns are filed
• Remove any outstanding tax liability
• Initiate a cancellation application
• Submit closure documents or declarations

The whole thing is about an accurate cancellation of your GSTIN with no dues under your ​‍​‌‍​‍‌name.

What Happens If You Don’t Cancel GST Registration?

What​‍​‌‍​‍‌ happens if GST registration is not cancelled?

Continued obligation to submit returns

Business being inactive or not, the filing of GSTR-1 and GSTR-3B must go on.

Late fees and penalties

Return defaults will be causing penalty charges that will be issued every day and that will be added together.

Legal notices from the GST department

Refusal to file repeatedly may result in addresses or actions of the department.

Liability for interest on outstanding dues

On nonpayment of the taxes payable on time, additional interest is levied, along with other consequences related to law.

What If Your GST Registration Was Cancelled by the Department?

The moment when the GSTIN was cancelled by the GST department, you are eligible to petition for the revocation, only if you satisfy the stipulations.

It is necessary to:

• Submit all the missed returns
• Make payment for all the money that is due (tax and other fees)
• Submit a revocation application (Form REG-21)
• Await the approving officer’s decision

Your Law Place is there to help you in preparing the letters, filing the pending compliances, and completing the revocation process without any bumps.

What Makes Your Law Place the Most Reliable Partner for GST Cancellation?

• From beginning to end, the service of your GST registration cancellation is handled thoroughly
• An experienced professional provides support with pending compliances and the finalization of returns
• All the forms and papers are filed on time, in correct, and without any mistakes
• Besides the transparency in pricing, there aren’t any surprises
• Rapid and trouble-free sanction from the GST department
• If your GSTIN is cancelled in error, you will be provided with the necessary assistance for revocation

How Long Does It Take to Cancel GST & What Are the Fees?

The duration for cancellation of most GST cases varies from 3 to 15 days depending on the officer verification and the status of the pending return. The fees are conditional on business type, documents needed, and the complexity of cases such as mergers or revocations.

What Are Some of the Errors You Should Not Do While Cancelling GST?

• Non-filing of pending GSTR-3B or GSTR-1
• Non-settlement of unpaid liabilities
• Using incorrect business closure documents for uploading
• Incorrect or incomplete stock details
• Not paying attention to ARN notifications and officer queries

Your Law Place is helping you to avoid these mistakes by giving you support during ​‍​‌‍​‍‌filing.