CHAPTER II

Cancellation of Registration in GST

Introduction

The registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by the department on their own motion or the registered person can apply for cancellation of their registration. In case of death of registered person, the legal heirs can apply for cancellation. In case the registration has been cancelled by the department there is a provision for revocation of the cancellation. On cancellation of the registration the personhas to file a return which is called the final return.

Reason for cancellation

The registration can be cancelled for the following reasons:

a) a person registered under any of the existing laws, but who is not liable to be registered under the GST Act;

b) the business has been discontinued, transferred fullyfor any reason including death of the proprietor, amal-gamated with other legal entity, demerged or otherwise disposed of;

c) there is any change in the constitution of the business;

d) the taxable person (other than the person who has vol-untarily taken registration under sub-section (3) of sec tion 25 of the CGST Act, 2017) is no longer liable tobe registered;

e) a registered person has contravened such provisions of the Act or the rules made thereunder;

f) a person paying tax under Composition levy has notfurnished returns for three consecutive tax periods;

g) any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of six months;

h) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced busi-ness within six months from the date of registration;

i) registration has been obtained by means of fraud, will-ful misstatement or suppression of facts

Procedure for cancellation

i) A person already registered under any of the existing laws (Central excise, Service tax, VAT etc.), but who now is not liable to be registered under the GST Act has to submit an application electronically by 31 ST December 2017, in FORM GST REG-29 at the common portal for the cancellation of registration granted to him. The Superintendent of Central Tax shall, after conducting such enquiry as deemed fit, cancel the said registration. shall, after conducting such enquiry as deemed fit,cancel the said registration.

ii) The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under Central Goods and Services Tax Act.

iii) In the event, the Superintendent of Central Tax has reasons to believe that the registration of a person is liable to be cancelled, a notice to such person in FORM GST REG-17, requiring him to show cause,within a period of seven working days from the date of the service of such notice, as to why his registra-tion shall not be cancelled; will be issued.

iv) The reply to the show cause notice issued has to be furnished by the registered person in FORM REG–18 within a period of seven working days.

v) In case the reply to the show cause notice is foundto be satisfactory, the Superintendent of Central Tax will drop the proceedings and pass an order in FORM GST REG–20.

vi) However, when the person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is li-able to be cancelled, the Superintendent of CentralTax will issue an order in FORM GST REG-19, within a period of thirty days from the date of appli-cation or, as the case may be, the date of the reply to12Cancellation of Registration in GST the show cause issued, cancel the registration, with effect from a date to be determined by him and no-tify the taxable person, directing him to pay arrearsof any tax, interest or penalty.

vii) The registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held instock and inputs contained in semi-finished or fin-ished goods held in stock or capital goods or plantand machinery on the day immediately preceding the date of such cancellation or the output tax pay-able on such goods, which ever is higher.

viii) In case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the in-put tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, which ever is higher.

ix) The cancellation of registration shall not affect the liability of the person to pay tax and other dues for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

Final Returns

When the registration of a registered person other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the composition scheme orTDS/TCS; has been cancelled, the person has to file a final return within three months of the date of cancellation ordate of order of cancellation, whichever is later, electronically in FORM GSTR-10 through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Revocation of Cancellation

i) When the registration has been cancelled by the Proper Officer (Superintendent of Central Tax) on his own motion and not on the basis of an applica-tion ,then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, in FORM GST REG-21, to the Proper Officer (Assistant orDeputy Commissioners of Central Tax), within aperiod of thirty days from the date of the service of the order of cancellation of registration at the com-mon portal, either directly or through a Facilitation Centre notified by the Commissioner:

ii) However, if the registration has been cancelled for failure to furnish returns, application for revocation shall be filed, only after such returns are furnished and any amount due as tax, in terms of such returns,has been paid along with any amount payable to-wards interest, penalty and late fee in respect of the said returns.

iii) On examination of the application if the Proper Of-ficer (Assistant or Deputy Commissioners of Cen-tral Tax) is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revo-cation of cancellation of registration, then he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.

iv) However, if on examination of the application forrevocation, if the Proper Officer (Assistant or Dep-uty Commissioners of Central Tax) is not satisfied then he will issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not berejected and the applicant has to furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.

v) Upon receipt of the information or clarification in FORM GST REG-24, the Proper Officer (Assis-tant or Deputy Commissioners of Central Tax) shall dispose of the application within a period of thirty days from the date of the receipt of such informationor clarification from the applicant. In case the infor-mation or clarification provided is satisfactory, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose the application as perpara (iii) above. In case it is not satisfactory the ap- plicant will be mandatorily given an opportunity of being heard, after which the Proper Officer (Assis- tant or Deputy Commissioners of Central Tax) after recording the reasons in writing may by an order in FORM GST REG-05, reject the application for revocation of cancellation of registration and com- municate the same to the applicant.

vi) The revocation of cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act as the case may be, shall be deemed to be a revocation of can-cellation of registration under Central Goods and Services Tax Act.