GST Cancellation

GST Cancellation
(Price Start at $ 30 /-)

In India, the Goods and Services Tax (GST) system permits the cancellation of a GST registration in specific situations. A company may request the voluntary cancellation of its GST registration provided that its total revenue for the fiscal year does not over the Rs 40 lakh GST threshold. This relieves small enterprises of the stress of compliance.

If GST returns are not filed for a continuous period of six months, or if taxes are not paid for a continuous period of six months, the registration may be cancelled involuntarily. In this situation, the appropriate officer must provide a show cause notice that includes the rationale for the proposed cancellation and a response window. If it is shown that a business has routinely broken any GST regulations or fraudulently obtained input tax credit, registration may also be terminated. The cancellation order's effective date is usually when registration cancellations go into effect. Within the allotted time frame following the cancellation date, refund requests are still eligible to be submitted. Before cancellation, all outstanding taxes must be paid in full, and within three months of the cancellation date, FINAL GST returns must be submitted. According to the relevant pre-GST legislation, any stock that remains at the moment of cancellation is taxed. Regarding previous transactions, some compliance obligations could persist even after the cancellation.

Reasons for GST Cancellation in India

  • Voluntary Cancellation: Companies may request the voluntary cancellation of their GST registration if their total yearly revenue does not surpass Rs 40 lakhs. For tiny entities, this eliminates the burden of compliance.
  • Non-filing of Returns: A registered person's GST registration may be terminated upon the issuance of a show-cause notice if they neglect to file returns for a continuous period of six months.
  • Non-payment of Taxes: After giving the business a chance to explain itself, cancellation may occur if taxes and interest are not paid for a continuous six months.
  • Violation of Provisions: Frequent noncompliance with inspection/audit procedures, submitting fraudulent invoices, obtaining phoney input tax credits, and other infractions of the GST regulations may lead to termination.
  • Discontinuance of Business: A GST registered person's registration may be revoked if tax authorities have cause to suspect that the person's business operations have been terminated.
  • Transfer/Change in Constitution: Cancellation may also occur for failure to notify within the required timeframe of any changes in firm ownership or legal status.

What are the Documents Required for GST Cancellation in India

  • Cancellation Application Form: An online submission of a properly completed voluntary cancellation application in Form GST REG-16 is required. It records information about the company, the cancellation reason, the stock statement, etc.
  • Director/Partner Authorization: A letter of authorization designating the designated signatory with the authority to submit a GST cancellation request on the company's behalf.
  • Most recent Tax Returns: A copy of the most recent GST and annual returns that were submitted prior to the application date for cancellation must be included.
  • Certificate of Tax Clearance: This document releases the applicant from any unpaid taxes, fines, interest, and other charges prior to filing for cancellation.
  • Statement of Input Tax Credits: This document provides information about any input tax credits that the applicant is requesting be cancelled but has not yet used.
  • Stock Inventory Statement: Information on any input, semi-finished, or finished items that the applicant had on hand as of the request cancellation date.
  • Bank Statements: The most recent bank account statements show that the overdue GST amounts have been settled.
  • Cessation Resolution: A board resolution announcing the decision to wind up or dissolve the firm in the event of a voluntary closure of the company.

How to Apply for GST Cancellation

  • Application for Voluntary Cancellation: The registered person must use the GST site to submit an online application in the required Form GST REG-16. Businesses having annual revenue under Rs 40 lakh are eligible for this.
  • Give Complete Details: The application needs full details, including the applicant's name, address, GSTIN registration number, the reason for the cancellation, information on inputs and capital items that are in stock, and supporting documentation.
  • Return Filing: Prior to the date of the application for voluntary cancellation, you must file any applicable GST returns that are due for the tax period. It is necessary to file any outstanding returns before applying.
  • Payment of Dues: Pay any outstanding debts, taxes, interest, and penalties. Send in the cancellation request and evidence of payment for any outstanding balances.
  • Notification to Department: Upon submission of the completed cancellation application on the GST site with all required documentation, an official notification is dispatched to the appropriate officer.
  • Officer Approval: To confirm eligibility, the appropriate officer examines the application and inputs/stock details. The officer issues an order approving the GST cancellation with an effective date if they are satisfied.
  • Final Returns: On or before the deadline, you must file a final GST Return in Form GSTR-10 with all pertinent information.

How can Seedling help with GST Cancellation in India?

Navigating the sometimes-overwhelmingly complicated compliance requirements is part of filing for GST cancellation. Here's where Seedling comes in to help you through the procedure without any hassles. With its comprehensive understanding of cancellation procedures and GST law, Seedling keeps track of all the requirements and paperwork required for your particular business scenario. It produces statements for input tax credits and stock valuation, correctly fills out the GST REG-16 cancellation form, and drafts authorization letters or board resolutions that are needed to allow closure. In addition, Seedling checks your previous GST filings to make sure there are no gaps that can prevent you from requesting a cancellation. It also takes care of any questions you may have after cancelling and helps with the payment of any unpaid bills.

Most common question about our services

Is GST cancellation mandatory if my business suspends operations?

No, merely because a business temporarily suspends operations does not require GST cancellation. The GST registration will stay valid and active as long as you continue to meet the usual GST compliance requirements, which include filing returns on time and paying taxes on time. Tax authorities may only begin cancellation procedures if the suspension is extended for an extended period of time without any activity resumed and they have reasonable suspicions of complete closure. However, suspension by itself does not result in an immediate, required cancellation. If you anticipate that the gap will last indefinitely, you may freely ask for cancellation, stating dormancy as the cause.

How long does it takes for GST cancellation to be processed?

It usually takes about 30-45 days for voluntary GST cancellation applications to be reviewed and approved by tax authorities after submission of the request online along with all documents. The cancellation certificate indicating date of effect is then issued to the applicant thereafter once satisfied that necessary cancellation conditions are fulfilled.

Can I apply for GST cancellation online?

Yes, you can apply for GST cancellation online through the official Goods and Services Tax Network (GSTN) portal.

what happens to pending GST returns after cancellation?

Even though the GST registration may have ended, any outstanding GST returns for the tax periods prior to the cancellation date of the registration must still be filed by the regular deadlines. The cancelled entity has three months from the date of cancellation to provide a final return in Form GSTR-10 separately. Settlement of any outstanding debts from previous transactions is still required.

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