Saying Goodbye to GST: The Ultimate Guide on How to Cancel Your GST Registration

Updated on : May 12, 2023 - 3 p.m. 17 min read.

Step-by-Step Guide: How to Cancel Your GST Registration:

GST registration is mandatory for businesses with a turnover of over Rs 20 lakhs. However there may be times when you may want to cancel your GST registration either due to business closure or restructuring. Cancelling your GST registration is not a complicated process but it does require you to follow specific steps to ensure that the process is smooth and hassle-free. In this article we'll provide you with a step-by-step guide on how to cancel your GST registration. We'll cover the necessary documents the process involved and the timeline for completion. So whether you're a business owner looking to cancel your GST registration or a professional assisting a client this guide will provide you with all the information you need to make the process as seamless as possible. So let's dive in!

Eligibility criteria for cancelling GST registration:

Before we dive into the process of cancelling GST registration let's first understand the eligibility criteria for cancelling the same. Any business that no longer meets the criteria for GST registration or has ceased operations can apply for cancellation of GST registration. Some of the reasons for which businesses may want to cancel their GST registration are as follows:

The business has ceased operation.
The business has been sold, merged or amalgamated with another business.
The business no longer meets the threshold limit for GST registration.
The business has been discontinued.

If you meet any of these criteria you can apply for the cancellation of your GST registration by following the steps outlined in the subsequent sections.

Documents required for cancelling GST registration:

The next step in the process of cancelling your GST registration is to ensure that you have all the necessary documents in place. Here is a list of documents that you will need to submit while applying for GST cancellation:

GST cancellation application form: You will need to fill out Form GST REG-16 to apply for the cancellation of GST registration. This form can be downloaded from the GST portal.
Proof of business closure: If you are cancelling your GST registration due to the closure of your business you will need to submit proof of the same. This can be in the form of a closure certificate a letter from the bank or any other document that proves that your business has been closed.
Proof of transfer of business ownership: If you are cancelling your GST registration because you have sold your business or transferred ownership to someone else you will need to submit proof of the same. This can be in the form of a sale deed a transfer agreement or any other document that proves the transfer of ownership.
GST registration certificate: You will need to submit a copy of your GST registration certificate along with your cancellation application form.

Steps to cancel GST registration online:

Now that you have all the necessary documents in place let's take a look at the steps involved in cancelling your GST registration online:

Step 1: Log in to the GST portal using your credentials.

Step 2: Go to the Services tab and click on the 'Registration' option.

Step 3: Select 'Application for Cancellation of Registration' from the drop-down menu.

Step 4: Fill in Form GST REG-16 with the required details.

Step 5: Upload the necessary documents including your GST registration certificate proof of business closure and proof of transfer of business ownership.

Step 6: Once you have filled in all the details and uploaded the necessary documents, click on 'Submit'.

Step 7: You will receive an acknowledgement of your application for cancellation of GST registration.

It is important to note that your application for cancellation of GST registration will be processed only after the GST officer has verified the documents submitted by you. Once the verification process is complete, your GST registration will be cancelled and you will be notified accordingly.

Common issues while cancelling GST registration and their solutions:

While cancelling your GST registration you may face some common issues. Here are some of the common issues and their solutions:

Mismatch in GST registration details: If there is a mismatch in the GST registration details submitted by you and those available with the tax authorities your application for cancellation of GST registration may be rejected. To avoid this ensure that all the details submitted by you are accurate and match those available with the tax authorities.
Non-submission of necessary documents: If you fail to submit all the necessary documents along with your application for cancellation of GST registration your application may be rejected. To avoid this ensure that you have all the necessary documents in place before submitting your application.
Pending GST returns: If you have any pending GST returns you will not be able to cancel your GST registration. To avoid this ensure that all your GST returns are filed before applying for cancellation of GST registration.

How to surrender GST registration certificate:

Once your GST registration has been cancelled, you will need to surrender your GST registration certificate. Here are the steps involved in surrendering your GST registration certificate:

Step 1: Log in to the GST portal using your credentials.

Step 2: Go to the Services tab and click on the 'User Services' option.

Step 3: Select 'View/Download Certificate' from the drop-down menu.

Step 4: Click on 'Surrender Certificate'.

Step 5: Fill in the required details and click on 'Submit'.

Step 6: You will receive an acknowledgement of your surrender of GST registration certificate.

Important points to remember while cancelling GST registration:

Ensure that all your GST returns are filed before applying for cancellation of GST registration.
Make sure that all the details submitted by you are accurate and match those available with the tax authorities.
Submit all the necessary documents along with your application for cancellation of GST registration.
Surrender your GST registration certificate once your GST registration has been cancelled.

Consequences of not cancelling GST registration:

If you do not cancel your GST registration even though you are no longer eligible for the same you may face the following consequences:

Penalty: You may be liable to pay a penalty of up to 10% of the tax due or Rs 10,000, whichever is higher.

Interest: You may be liable to pay interest on the tax due at the rate of 18% per annum.

Legal action: The tax authorities may take legal action against you for non-compliance.

Frequently asked questions about cancelling GST registration:

1. Is there a fee for cancelling GST registration?

No, there is no fee for cancelling GST registration.

2. Can I cancel my GST registration if I have not filed any GST returns?

No, you cannot cancel your GST registration if you have any pending GST returns.

3. How long does it take to cancel GST registration?

The timeline for cancellation of GST registration varies from case to case and depends on the verification process carried out by the GST officer.

4. Can I cancel my GST registration online?

Yes, you can cancel your GST registration online by following the steps outlined in this article.

Conclusion

Cancelling your GST registration may seem like a daunting task but it is a simple process if you follow the steps outlined in this article. Ensure that you have all the necessary documents in place and follow the steps involved in cancelling your GST registration online. Remember to surrender your GST registration certificate once your GST registration has been cancelled to avoid any legal complications. By following the steps outlined in this article you can make the process of cancelling your GST registration as smooth as possible.

By Esha Arora

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