How to Surrender GST Number?

There was a layer of tension amidst business people across the country when came in the announcement of replacing the cascading tax system with all new GST (Goods and Service Tax). More than two years have passed now people are trying to adapt the reform, facing troubles but also clearing them with ease. This article deals with one such issue faced by the businessmen – How to surrender GST number?

It simply means that a registered taxpayer shall not be registered under the GST Act anymore, neither paying nor collecting GST. The GST registration certificate or the number can be applied for cancellation due to wrongly registration under GST, if the annual turnover of your company is not more than 20 lacs (unregistered purchase and sale total), closing or shifting of business/profession, or any other valid and applicable reason. In case you have voluntarily registered under GST, the cancellation application form can be filled only after completing one year from the registration date.

What Does the CGST Act Say?

Section 29 of CGST Act clearly explains the cancellation of the GST number. It states that-

1. The person or the legal heirs of that person (in case of death) can file cancellation application under the circumstances when:
   1. Business ceased due to the death of the proprietor, the amalgamation of the business.
   2. There is a change in the business constitution,
   3. The taxable person (u/s 25 sub-section 3) is no more liable to be registered (u/s 22 or 24),
2. Retrospectively cancelling when the person deemed fit in situations of contravening provisions of the Act, not furnishing returns up to three consecutive financial years (for those u/s 10) and up to six months (for any other specified), non-commencement of business even after six months from the misstatement.
3. Surrendering the number will not affect the liability to pay all the dues whether pending before or determined after the cancellation form.
4. It covers SGST and UTGST as well.
5. There is a certain amount as may be prescribed, to be paid in the form of electronic cash/credit ledger.
6. The applicant must fill Form GST REG-16, 17, 18, 19 & 20 electronically as and when said by the officer.

Cancellation of GST Registration

The following methods can cancel the registration of GST-

Let’s discuss each method one by one:

1. When turnover is less than 20 lacs
   Every person registered under previous laws must enroll in GST. However, many people do not require to get registered. If they have, then they may request for cancellation by filing Form GST REG-29 online. After proper enquiry conducted by an officer, the registration can cancel.
2. Steps Involved in cancellation of GST Registration;

• Login to the portal and click ‘Cancellation of provisional registration’.
• Check your GSTIN number when the Cancellation page appears and give the reason for surrendering the registration.
• Select ‘NO’ in ‘Have you issued any tax invoice in GST regime?’, (if you have, then you must fill Form-16).
• Fill in the required details and confirm. Your application will be submitted.

3. Requested by the taxpayer in other cases
   A taxpayer can request cancellation of the GST number when-

• The business ID discontinued,
• The business fully transferred, demerged, amalgamated etc. The transferee, however, still needs to be registered legally while the transferor has to cancel its registration,
• There is a change in the business constitution (for instance- a private limited company turns into a public limited or vice-versa).

Forms  Required for Cancellation

In any other case, besides mentioned above, the taxpayer can file the cancellation application by filling FORM GST REG 16. The legal heirs of the deceased person need to follow the below-mentioned procedure:

• Make a cancellation application in Form GST Reg 16;
• Input details, finished, semi-finished and goods in stock detail, liability thereon and payment details are required to be disclosed;
• The proper officer issues cancellation order in FORM GST REG 19 within 30 days of application date resulting in effective cancellation as on the date determined and notifying the taxpayer.

4. Cancellation by the tax officer
   GST officer is entitled to cancel the registration on these conditions:

• Violations of GST law;
• Failing to file tax returns for three consecutive years;
• Registering via fraudulent means;
• Non-commencement of business after six months of registration;
• Violation of Anti- profiteering provisions ;
• Supply of goods/services without issuing invoice/bill;
• Any other specified reason.

A show-cause notice is sent to the taxpayer, by the officer in FORM GST REG 17. A reply should be drafted in FORM 18 within seven days stating reasons for non-cancellation of the business. A satisfactory reply will further the proceedings and pass the order in FORM GST REG 20. If the officer agreed to the reply, then the officer shall issue orders in FORM GST REG 19, to e sent within 30 days from the date of reply to the show-cause notice. Corpbiz