GST Cancellation Process & Online Registration Termination

Goods and Services Tax (GST) is a complete tax levied on the supply of goods and services in India. Every business meeting the GST registration criteria must comply with GST rules. However, there are situations where businesses may need to cancel their GST registration, such as business closure, turnover reduction, or changes in business structure. The GST Cancellation Process ensures that businesses properly terminate their GST liabilities and obligations.

This article provides a detailed guide on GST cancellation, including how to cancel GST registration, eligibility criteria, the online process, documents required, and compliance aspects. Additionally, we will explore the impact of GST cancellation on Section 8 Companies and how they handle GST registration and cancellation.

What is GST Cancellation?

GST cancellation refers to the termination of GST registration, removing the entity from the GST taxpayer database. Once cancelled, the business is no longer required to collect, pay, or file GST returns.

Reasons for GST Cancellation

Businesses may apply for cancellation of GST registration due to various reasons, including:

1.Business Closure – The entity has ceased its operations.

2.Turnover Falls Below Threshold – The business revenue no longer meets the GST applicability limit.

3.Change in Business Structure – Conversion of business entity (e.g., sole proprietorship to a private limited company).

4.Transfer of Business – Business is transferred due to merger, acquisition, or sale.

5.Voluntary Registration Withdrawal – Business owners may cancel registration if they voluntarily registered under GST but no longer wish to continue.

6. Non-Compliance Issues – If a taxpayer fails to comply with GST regulations, authorities may cancel the registration.

Who Can Apply for GST Cancellation?

GST cancellation can be initiated by:

• Registered taxpayers (business owners)

• GST officers (in case of non-compliance)

• Legal heirs (in case of the death of a sole proprietor)

How to Cancel GST Registration?

Step-by-Step GST Cancellation Process

The GST cancellation process can be done online through the GST portal. Follow these steps:

Step 1: Log in to the GST Portal

• Visit the official GST portal (www.gst.gov.in).

• Enter your username and password to access the dashboard.

Step 2: Direct to Cancellation Option

• Click on ‘Services’ > ‘Registration’ > ‘Application for Cancellation of GST Registration’.

Step 3: Select the Reason for Cancellation

• Choose the appropriate reason from the given list.

Step 4: Provide Business Details

• Enter the required information, including:

o Date from which cancellation is required.

o Details of GST liabilities and pending dues.

o Submit final GST returns, if applicable.

Step 5: Upload Supporting Documents

• The following GST registration documents may be required:

o Proof of business closure (if applicable)

o PAN and Aadhaar of the business owner

o Clearance certificate for outstanding liabilities

Step 6: Submit Form GST REG-16

•Complete the online GST cancellation form (GST REG-16) and submit it.

Step 7: Verification & Approval

•The GST officer reviews the application.

•If all details are in order, an Order of Cancellation (Form GST REG-19) is issued.

Tracking GST Registration Status

After applying for cancellation of GST registration, businesses can check the GST registration status by following these steps:

1.Log in to the GST portal.

2.Traverse to ‘Services’ > ‘Track Application Status’.

3.Enter ARN (Application Reference Number) to check approval status.

Once the cancellation is approved, the taxpayer receives confirmation, and the GSTIN (GST Identification Number) becomes inactive.

Impact of GST Cancellation on Businesses

1. No More GST Compliance

Once GST is cancelled, the business is no longer required to:

•File GST returns.

•Collect or pay GST on supplies.

•Issue tax invoices with GST.

2. Re-Registration in Case of Reactivation

If the business resumes operations in the future and meets GST eligibility criteria, it must go through GST registration online again.

3. Legal Liabilities and Final Compliance

Before cancelling GST, businesses must ensure:

•All GST dues are cleared.

•Any pending returns are filed.

•Any input tax credit (ITC) reversal is done appropriately.

GST and Section 8 Company

Does a Section 8 Company Need GST Registration?

A Section 8 Company is a non-profit organization registered under the Companies Act, 2013. It operates for charitable, educational, or social welfare purposes.

Although Section 8 Companies enjoy tax benefits, they may still require GST registration if they:

•Provide taxable services exceeding the GST exemption limit.

•Engage in commercial transactions subject to GST.

•Import or export goods and services.

GST Registration Process for Section 8 Companies

1.Visit the GST portal and select Online GST Registration.

2.Fill out Form GST REG-01 and submit the necessary GST registration documents.

3.After verification, a GSTIN is issued.

GST Cancellation for Section 8 Companies

If a Section 8 Company no longer requires GST registration, it must follow the GST cancellation process as mentioned above. This ensures compliance with tax laws and avoids penalties.

Common Mistakes to Avoid in GST Cancellation

1 Not Filing Final GST Returns – Ensure all pending GST returns are cleared before applying.

2.Incorrect Reason for Cancellation – Select the appropriate reason for cancellation to avoid rejection.

3.Not Clearing Outstanding Liabilities – Settle all GST dues to prevent legal complications.

4.Not Verifying Application Status – Always check the GST registration status after submitting the request.

Conclusion

The GST cancellation process is essential for businesses that cease operations, change structure, or fall below the taxable threshold. By following the step-by-step process for online GST registration cancellation, businesses can ensure compliance and avoid penalties.

For Section 8 Companies, consideration GST registration and the cancellation process is necessary to maintaining their tax-exempt status while adhering to GST laws.

Whether you're a business owner or running a Section 8 Company, staying informed about GST regulations ensures smooth operations and legal compliance. If needed, consult a tax professional for guidance on GST cancellation and other regulatory requirements.

FAQs on GST Cancellation

1. Can I cancel GST registration online?

Yes, businesses can cancel GST registration online through the GST portal by filing Form GST REG-16.

2. What happens if my GST cancellation is rejected?

If the GST officer finds discrepancies, the cancellation request may be rejected, requiring the business to correct the errors and reapply.

3. Do I need to file returns after GST cancellation?

No, once GST is cancelled, you are no longer required to file returns. However, pending liabilities must be cleared.

4. Can a Section 8 Company cancel its GST registration?

Yes, if a Section 8 Company is no longer required to be registered under GST, it can apply for cancellation following the same process.

5. How long does GST cancellation take?

Typically, the process takes 7-10 working days, subject to verification by the GST officer.