How to cancel GST Number, Do these before you Cancel GST number: Essential Compliance check

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As businesses evolve, so do their needs and regulatory obligations. One such obligation is the surrendering of GST registration, a process fraught with nuances and requirements. Before embarking on this journey, it’s imperative for businesses to conduct a thorough compliance check to ensure a seamless transition and avoid any legal or financial repercussions.

Understanding the Essentials

Before initiating the process of surrendering GST registration, several key requirements demand attention:

File Pending Returns: The first step is to ensure that all pending GST returns for previous tax periods are filed diligently. Failure to do so can complicate the cancellation process and lead to compliance issues.
Clear Tax Liabilities: Clearing all outstanding tax liabilities, including interest and penalties, is paramount. It not only demonstrates financial prudence but also prevents any roadblocks in the cancellation process.
Provide Stock and Tax Liability Details: When applying for cancellation, businesses must provide accurate information regarding the value of their stock and tax liabilities. This ensures transparency and facilitates a smooth transition.
Reasons for Cancellation: The decision to cancel GST registration can stem from various reasons such as ceasing operations, changes in business constitution, or no longer being liable for GST registration. It’s crucial to identify the correct reason to avoid discrepancies.
Update GSTIN in Case of Transfer: In the event of a business transfer, it’s essential to update the GSTIN of the transferee entity when applying for cancellation. This ensures compliance and avoids any confusion in the future.
Timely Submission: The cancellation application must be submitted within 30 days from the date on which the registration is liable to be cancelled. Adhering to this timeline is critical to avoid any delays or complications.

Potential Consequences of Non-Compliance

Non-compliance with GST rules or providing incorrect information during or after the GST Registration process can have severe consequences. Businesses or individuals registered under GST must ensure they meet the eligibility criteria for cancellation to avoid facing penalties or legal actions.

What to do after Cancelling GST Number:

File Annual Return (GSTR-9)
File GSTR-10 which is final return under GST
Check if any GST Return is showing to file In your return dashboard

Step-by-Step Guide to Surrendering GST Registration

The process for surrendering GST registration involves electronic submission of an application in Form GST REG-16 along with additional details. Here’s a step-by-step guide to navigating this process:

How can I file for cancellation of GST registration?

To file for cancellation of GST registration, please perform the following steps:

1. Visit the URL: https://www.gst.gov.in.

2. Login to the GST Portal with your user-ID and password.

3. Navigate to the Services > Registration > Application for Cancellation of Registration option.

4. The form – Application for Cancellation of Registration contains three tabs. Ensure that the Basic Details tab is selected by default.

Note: The first tab contains pre-filled information in sections of Basic Details and Address of Principal Place of Business.

5. Either fill your Address for Future Correspondence manually, or check the option of Address same as above to copy the same address as in the Address of Principal Place of Business field.

6. Click the SAVE & CONTINUE button.

Notes:

The tab Basic Details will change to blue color and a tick mark will appear on it indicating that all the mandatory fields under this tab have been duly filled-in.
The next tab Cancellation Details will get active, requiring you to make suitable selections and provide relevant information in corresponding fields.

7. Select a suitable reason from the Reason for Cancellation drop-down list.

Notes: The following five reasons are available for selection:

a) Change in constitution of business leading to change in PAN

b) Ceased to be liable to pay tax

c) Discontinuance of business / Closure of business

d) Others

e) Transfer of business on account of amalgamation, merger, demerger, sale, leased or otherwise

Change in constitution of business leading to change in PAN:

a) Enter the date from which registration is to be cancelled.

b) Provide the GSTIN of the transferee entity under the Details for Transfer, Merger or Change in Constitution section. System will validate the same, and based upon it’s Legal Name of Business, will auto-populate the Trade Name.

Ceased to be liable to pay tax:

a) Enter the date from which registration is to be cancelled.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Discontinuance of business / Closure of business:

a) Enter the date from which registration is to be cancelled.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Others:

a) Specify the reason for cancellation.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Transfer of business on account of amalgamation, merger, de-merger, sale, leased or otherwise:

a) Enter the date from which registration is to be cancelled.

8. Click the SAVE & CONTINUE button.

Notes:

This will mark the second tab also as complete.
The next tab, Verification will get activated.

9. Check the Verification statement box to declare that the information given in this form is true and correct, and that nothing has been concealed therefrom.

10. Select the name of the authorised signatory from the Name of Authorized Signatory drop-down.

11. Enter the Place of making this declaration.

Note: Notice that the system auto-populates the authorised signatory’s designation or status.

12. Sign the form by using either your Digital Signature Certificate (DSC), or the EVC option.

Notes:

For the purpose of simplicity, this user manual has followed the EVC path.
If using a DSC, you will be required to select your registered DSC from the emSigner pop-up window and then proceed from there accordingly.

13. Enter the OTP.

Notes:

On successfully filing the application for cancellation of registration, the system will generate the ARN and display a confirmation message.
A confirmation message will also be sent by GST Portal on your registered mobile phone number and e-mail-ID.
After this stage, the concerned Tax Official will review your application and take a decision accordingly.

14. To view the ARN, navigate to the Services > Registration > Track Application Status option.

15. Select Submission Period radio button.

16. Enter the From and To dates between which you filed for cancellation of registration.

17. Click the SEARCH button.

Note: The search result will display the ARN corresponding to your filed application.

Withdrawal of cancellation of registration application

Taxpayer can withdraw his/her request for cancellation of registration till the time the authorized tax officer has not taken any action on the application. To withdraw the request for cancellation of registration, perform the following steps:

1. Login to the GST portal with valid credentials. Click the Services > User Services > View My Submissions option to view your submissions. Click the withdraw button.

Note: The withdraw option will only be available till the time the authorized tax officer has not taken any action on the application i.e. the status of the Application is in “Pending for Processing” status. In case, tax officer has initiated some action on the application, there would be no withdraw button available for the taxpayer to withdraw his/her application.

2. Click the CONFIRM button.

3. A confirmation message will be displayed on the screen. Click the OK button.

4. Updated list of My Submissions is displayed. Withdrawl hyperlink will not be visible now.

Note: An alert will be sent to the authorized officer mentioning that the Application with XXXXXXXXXX ARN number has been withdrawn by the Applicant.

Conclusion

Surrendering GST registration requires meticulous attention to detail and adherence to regulatory requirements. By conducting comprehensive compliance checks and following the prescribed procedure diligently, businesses can ensure a smooth and hassle-free cancellation process, thereby mitigating any potential risks or complications.

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