Goods and service tax or GST will be one tax to subsume all taxes. It will bring in “One nation one tax” regime. All taxable persons (threshold: turnover over Rs.20 lakhs) will have to get registered under GST. Such taxable persons may cancel their own registration or have their registration cancelled by the authorities due to violations.
Cancellation of GST registration can be done by-
***However, application for cancellation of registration by the concerned person who has registered voluntarily will be only after one year from the date of registration.
Note: Registration certificate can even be cancelled retrospectively
If this power is exercised by the authorities then it may lead to denial of credits to the bonafide buyers who have bought in good faith from the cancelled sellers.
The taxable person will receive a notice to show cause and a reasonable opportunity of being heard before cancellation (except in cases of cancellation by legal heirs).
All dues and tax liabilities prior to cancellation will still have to be paid. Such dues will not get waived off on cancellation.
On cancellation, the taxable person will have to pay tax either by-
For capital goods, the taxable person shall pay-
This is applicable only when the tax officer has cancelled the registration of a taxable person on his own motion. It does not apply to cases where there has been an application for cancellation. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.
The officer may accept the application to allow the person to continue with his registration. If he rejects it, then he must present a show cause notice and give the taxable person a reasonable opportunity of being heard.
Cancellation/revocation orders will cover both CGST and SGST, i.e., both the acts will be covered in the same order.
Thus, GST is a completely new tax regime already taking India by storm. Businesses will face challenges in transition and application of GST. To know more about GST, feel free to read more of our articles on our blog.