Cancellation of GST registration by the tax officer

Cancellation of GST registration means that the taxpayer will no longer be a registered person under GST and will not have to pay/collect any GST, claim an input tax credit or file returns. GST registration cancelled is covered under Section 29 of the CGST Act and Rules 20 to 22 of the CGST Rules.

Latest updates

26th October 2023
CGST notification no: 52/2023
Format of form REG-08- Order of Cancellation of Registration as TDS or TCS is modified.

4th August 2023
CGST notification no: 38/2023
The time limit for taxpayers to apply for the revocation of a cancelled GST registration is now 90 days from the date of the service of the order of cancellation of registration instead of 30 days with effect from 1st October 2023.

31st March 2023
CGST notification no: 03/2023
The department extended the time limit to apply for revocation of GST registrations cancelled on or before 31st December 2022 upto 30th June 2023. The reasons for cancellation should be due to the non-filing of tax returns. Also, only the taxpayers who couldn't apply for revocation within 30 days of the cancellation order can file it.

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18th February 2023
49th GST Council meeting updates-
The Council recommend an amnesty scheme to help taxpayers whose GST registration has been cancelled due to the non-filing of tax returns. Under this amnesty scheme, taxpayers would be allowed to file for the revocation of GST registration which couldn’t file the same earlier.

GST registration cancellation notice via GST REG-17 form

Under GST, a taxpayer and a proper officer can initiate the cancellation of GST registration. If a proper officer has reasons to initiate the cancellation of a registration, he can start the cancellation proceedings by issuing a show-cause notice in Form GST REG-17. The proper officer can initiate the cancellation proceedings if any of these circumstances arise:

• If a taxpayer registered under the composition scheme has not filed the returns for three straight years.
• A taxpayer other than composition taxpayers fails to file returns for six continuous periods.
• An assessee has taken voluntary GST registration but has not started a business within six months of registration.
• The registered taxpayer has contravened the provisions of the GST Act or Rules made thereunder.
• The GST registration is obtained by fraud or willful misstatement.
• A taxpayer supplies goods or services without any invoice or issues any invoice without a supply of goods or services to evade tax or wrongful availing of the input tax credit.
• If a taxpayer fails to pay tax, interest or penalty to the GST department within three months from the date on which such payment becomes due.
• Closure of business of the taxpayer.
• Death of sole proprietor.
• Change in constitution of the taxpayer leading to change in PAN.
• The concerned person is no longer required to be registered under GST or required to collect or pay tax.
• Transfer of business due to merger or amalgamation.

However, before the cancellation of GST registration, a taxpayer should be given a reasonable opportunity of being heard. He should issue a notice in Form GST REG-17 covering the points below:

• Clearly state the reasons based on which the registration of GST should be cancelled.
• Intimate the taxpayer to furnish a reply within seven working days from the date of service of notice in Form GST REG-17.
• The date and timing of the personal hearing, if any, is required to be held.

If the proper officer finds the reply to be satisfactory, he may drop the proceedings and pass an order in Form GST REG-20. If he is not satisfied, he may issue an order for cancellation of GST registration in Form GST REG-19. This order will be sent within 30 days from the date of reply to the show-cause notice.

GST REG-20 Form for order dropping registration cancellation

The proper officer will check the reply given by the taxpayer in Form GST REG-18. After checking the reply, if he is satisfied, he may cancel the proceedings by issuing an order in Form GST REG-20. This form contains the below information:

• Reference number and date.
• Show cause notice number and date.
• Analysis of reasons based on which the cancellation proceedings are dropped.

Rule 22 (4) provision- As per this Rule, if the taxpayer does not reply to the notice but furnishes all the pending returns and makes full payment of taxes along with the applicable interest and late fee, the proper officer may drop the proceedings and pass an order in Form GST REG-20.

Once the taxpayer collects such an order, the cancellation proceedings will be mentioned as laid off.

How to file form GST REG-18 for the reply to a show-cause notice?

The taxpayer files form GST REG-18 as a response to a show-cause notice received in Form GST REG-17. This form must be filed within seven working days from the date of receipt of show cause notice.

Step 1: Log in to the GST portal and navigate to ‘Services’ > ‘Registration’ > ‘Application for filing clarifications’.

Step 2: Enter the application reference number mentioned in the shown cause notice received in Form GST REG-17.

Step 3: Click search to find the appropriate form. Provide the reply and attach the supporting documents. The maximum file size allowed for upload is 1MB.
This reply will be sent to the proper officer for verification. If satisfied, he may drop the proceedings for cancellation of GST registration. If not satisfied, he may cancel the GST registration by issuing an order in Form GST REG-19.

GST REG-19 Form: Registration cancellation order for a taxable person

The proper officer can issue GST REG-19 to cancel GST registration if he thinks that the registered taxpayer is no longer eligible to be registered under GST. It will be issued in the following circumstances-

1. If the proper officer is not satisfied with the reply received in Form GST REG-18- In this case, the proper officer can issue an Order in Form GST REG-19 for cancellation of GST registration.
2. The taxable person wants to cancel the GST registration- In this case, the taxable person will send the request for cancellation of registration in Form GST REG-16. If the proper officer is satisfied with it, then he can issue an order in Form GST REG-19 to cancel GST registration.

This cancellation Order covers the below mentioned important details:

• Application reference number and date
• The effective date of cancellation of GST registration.
• Reasons for cancellation. 
• GST amount payable under the cancellation.

Date of cancellation of GST registration if cancelled by the tax officer- The effective date of cancellation shall be the date as mentioned in the cancellation order in Form GST REG-19.
 

What will happen once registration is cancelled?

Once the tax official cancels the GST registration, below things will happen:

1. Taxpayers will be informed about the cancellation via SMS and email.
2. Cancellation order in GST Form REG-17 will be sent to taxpayers. The order will also be available on the taxpayers’ dashboard to view, print and download.
3. Taxpayers will not be allowed to file a return or upload invoices for the period after the cancellation date. Also, GST Practitioner (GSTP) will not carry out GSTP functions after the date of cancellation.
4. Taxpayers will not be able to change registration details after the issue of the cancellation order. But, email and mobile number can be updated till all dues are cleared.
5. The status of GSTIN will change from ‘proceeding for cancellation initiated’ to ‘inactive’, and the same will be informed to other concerned tax authorities.

FAQs on GST registration cancelled

Is a taxpayer informed before suo moto cancellation?

Yes, a taxpayer is informed by way of issue of show cause notice in Form GST REG-17. The taxpayers’ registration cannot be cancelled before giving a sufficient opportunity of being heard.

What happens if the show cause notice is dropped?

Once the tax officer is satisfied with the taxpayers’ response, he can drop the proceedings. Below changes will happen:
1. The primary authorised signatory will be informed about the same by way of email and SMS.
2. The order for dropping a show-cause notice will be sent to the taxpayer by email and SMS.
3. Order will also be made available on the taxpayers’ dashboard to view, print and download.
4. The status of GSTIN will change from ‘proceeding for cancellation initiated’ to ‘active’.

Does cancellation of registration mean that there are no liabilities on the taxpayers end?

No, any liabilities related to the date before the cancellation of GST registration needs to be paid by the taxpayer.

Can a taxpayer login after suo moto cancellation of GST registration?

Yes, a taxpayer can log in to the GST portal. But, he cannot make any amendments to the registration after the date of cancellation. Only email ID and mobile number can be changed till all dues are cleared.
 

If the status of GSTIN is shown as suspended, can a taxpayer perform any activity on the GST portal?

A taxpayer can perform activities like filing an appeal, making payment, filing for a refund, reply to any order, notices, etc., file return or upload invoices for the period before the cancellation of registration.
 

What happens if the status changes to active from suspended?

The taxpayer will again be treated as an active taxpayer, and all the accesses given to active taxpayers will be immediately enabled on the GST portal.

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