With the introduction of GST, or Goods and Services Tax, which replaced several other taxes, goods and services are now subject to a single domestic indirect taxation regime across the country. Businesses with annual revenue of more than $20 million must register for the Goods and Services Tax under the new system. 

For states with special status, the amount is set at $10 lakh. In addition to withdrawing from the GST program, companies can also give up their GST number. This practice is known as GST cancellation. Read on to learn who is eligible to cancel GST, how to cancel GST, and more. Several norms and regulations must be followed in order to cancel GST.

What Is GST Registration Cancellation?

It is the taxpayer’s responsibility to use a GSTIN number as soon as they register for GST. In the event that a business owner cancels their GST number, they are prohibited from conducting business activities. GST cancellation refers to the process of either the central tax authority or the taxpayer revokes this identification number. 

Continuing to engage in such behavior will result in significant fines from the Department of Income Tax. Cancelling GST registration will remove the company from any further GST obligations. This usually occurs when a company goes out of business or changes its name.

GST Abolishing Justifications

Business owners or the Central Tax Authority can cancel a GST registration for any of the following reasons:

• Individuals are subject to old tax laws

In some cases, companies that filed taxes under the previous system are exempt from GST registration. A company who has already registered for VAT is exempt from registering for GST. The threshold limit for VAT was 10 lakhs, while the threshold limit for GST is 40 lakhs.

• Closure of a business

Additional situations in which the GST registration can be revoked include: the company ceases to exist, the owner requests cancellation, and the company ceases to operate.

• Mergers between companies
• An owner’s death or any other cause can result in the transfer of all or part of a business
• Revision of the organizational structure
• An exemption from GST registration occurs when a taxpayer opts in for registration under Section 25 (3) of the CGST Act.
• Participants in GST composition schemes who fail to file returns for three months will be penalized
• Those who violate GST provisions and laws are subject to the cancellation of the tax
• GST returns are not filed after six months if a person does not file them
• CGST section 25(3) specifies what happens if a business owner registers by voluntarily signing up but does not begin operations within six months of registering
• In order to obtain a GST registration, deception, misrepresentation, or concealment of fact must be used.

GST Registration Cancelled by Whom?

GST registration cancellation requests can be submitted by the following parties:

• Taxpayers in the present
• Taxpayers who have been approved for enrollment who have migrated
• After applying for citizenship, migrants who haven’t filled out any forms
• It is not possible to cancel GST for tax deductors/collectors and those who have a unique identification number

What is the process for canceling GST?

GST registrations can be canceled in the following ways:

1. GST REG-17 is used by the tax office to send a show-cause notice.
2. When GST cancellation is formally notified, a response must be issued within seven days. The taxpayer must provide a justification for stopping GST cancellation.
3. A GST REG-20 order will be issued if the tax officer agrees with the response.

GST Revocation Cancellation

It refers to the process of restoring a GST registration that was previously revoked. The rule applies when a tax authority terminates a GST registration. To revoke a GST registration, the taxpayer must submit a revocation application within 30 days of the cancellation date. The application must be filled out and handed over to the IRS. A tax officer will decide whether to approve or deny the revocation request.

The process for revocation of GST cancellations

• Using GST REG-21, a taxpayer can revoke GST registration if a tax official cancels it
• Taxpayers must apply through the tax portal within 30 days of cancellation
• A revocation must be approved by the tax officer within 30 days after receipt of the application. A GST REG-22 form must be used for revocation.
• Revocation of GST Cancellation applications can be rejected by tax officers using GST REG-05. An application to revoke GST registration must be submitted within seven days. The application must justify why the application should not be rejected.
• In such cases, you will need to use Form GST REG-24 once you receive the response.