GST has subsumed all other indirect taxes that were applied by the state and the central government. It is a tax levied at predetermined rates in a categorized manner on each level of value addition of goods and services. GST Registration is important as it is only after the completion of the registration process, one is able to receive input tax credit. Also, timely registration will avoid any kind of interface with the tax authorities. Further reducing the risks of penalties and fines.
If you don't Fall under the Registration Criteria.
If one is shutting down the business or profession.
If the business has been fully transferred or amalgamated or disposed of otherwise. In such cases, the transferee will have to get the business registered post amalgamation or demerger. A transferor will have to cancel its registration if it no longer exists in the business.
If there is a change in the constitution of business, say; a company has converted from private limited to public limited.
If the annual turnover of the business has been reduced, such that it is less than the threshold limit. However, in such cases registration is mandatory if the business wants to make inter-state supplies of goods. Inter-state service providers are an exception to this.
In case of death of a taxpayer, a legal heir may choose to do so.
Conducts business other than what is the declared place of business.
Violates the provisions i.e., if the taxpayer issues invoices or bills without the supply of goods and services.
Violates anti-profiteering provisions, such as; not passing on the benefits of input tax credit to the consumers.
Cancellation of GST registration means that the taxpayer will not be a GST registered person anymore. In case of voluntary registrations made under GST, application for cancellation can be made only after one year from the date of registration. For all those who are unable to perform the method of cancellation through GST portal must file a cancellation application in FORM GST REG 16. The same process is followed by the legal heirs of the deceased taxpayers. The details of the following information must be included:
Details of inputs, semi-finished and finished goods that are held as stock on the date of application of cancellation of registration.
Any liabilities thereon.
Details of the payment made.
The tax officer will have to issue an order for cancellation within 30 days from the date of application. The cancellation will be effective from a date notified to the taxpayer by the tax officer. However, if the tax officer cancels the registration due to any violation made by the taxpayer, then the tax officer will send a show cause notice to the taxpayer in FORM GST REG 17. It is mandatory for the taxpayer to reply through FORM REG 18 within 7 days mentioning the reason why his registration should not be canceled. If the tax officer finds the reply satisfactory, the proceedings are dropped thereby. However, if the registration is still liable to be canceled, the tax officer will issue FORM GST REG 19. Thereby, the order for cancellation of GST registration will be sent to the taxpayer within 30 days from the date of reply to the show cause notice.
Once a taxpayer applies for cancellation of registration willingly or by the tax officer, the taxpayer must be prepared to face the following consequences of GST cancellation:
The taxpayer will not have to pay GST anymore. However, it does not cancel the liability of a person to pay tax or other dues. The person will still be liable to meet all the obligation under the GST Act or the rules made thereunder for any period prior to the date of cancellation.
For certain businesses GST registration is mandatory. In case the business continues post cancellation of GST registration, it will be considered an offense. Penalties shall be applied for the same.
After the cancellation of registration credit of input tax in respect of inputs held as stock or inputs, capital goods, plant and machinery, or the output tax payable on such goods on the day immediately preceding the date of cancellation, whichever is higher shall be paid by way of debit through electronic credit ledger or electronic case ledger.
If the cancellation of registration is done under the State Goods and Services Act or Union Territory Goods and Services Act, then the registration made under the Goods and Services Act will also be canceled.
In case the decision to cancel the registration is reversed, the registration will still be valid. This official cancellation of the decision to cancel GST registration is also known as revocation of cancellation of registration. This is possible only when the tax officer has canceled the registration of a taxpayer on his own motion. A taxpayer can apply for the same within 30 days from the date of cancellation order. It is important to note that application for revocation cannot be filed in case the registration was canceled on the basis of failure to file returns. The returns must be first furnished, along with the payment of all the amount due in the form of tax, interest, and penalty.
Application for revocation of cancellation can be filed by any registered person through FORM GST REG 21. This application can only be filed if the tax officer has canceled by suo moto.
The application must be submitted within 30 days from the cancellation order at the common portal.
In case the tax officer is satisfied, he may choose to revoke the cancellation of registration by an order FORM GST REG 22. The revocation must be done within 30 days from the date of receipt of the application and the reasons for the same must be recorded in writing.
The applicant is conveyed if in case the tax officer rejects the application for revocation through FORM GST REG 05.
However, before rejecting the application, the tax officer must issue a show cause notice through FORM GST REG 23 for the applicant mentioning the reason for the same. It is the duty of the applicant to reply to FORM GST REG 24 within 7 days from the date when the notice was served. The tax officer must take a decision within 30 days from the date of receipt of clarifications mentioned in this.
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