Cancellation of registration under GST- Why & How?

In case you want to cancel your GST registration because GST does not apply to you or because you are shutting down your business or profession. Or there is some other valid reason due to which you want to cancel your GST registration, this article will guide you through the process.

Topics:

• What is meant by cancellation of registration?
• Consequences of cancellation
• Who can cancel the GST registration?
• Cancellation when turnover is less than 20 lakhs
• Cancellation by taxpayer in other cases
• Forms for cancellation
• Cancellation by tax officer
• Revocation of cancellation of registration

Attention GST registered taxpayers! 31st March 2018 is deadline to opt into Composition for FY 2018-19

For: Any GST registered taxpayer who want to opt for the Composition scheme for FY 2018-19;

31st March 2018 is the deadline to file the intimation in Form GST CMP-02 to opt into composition scheme for the FY 2018-19.

Follow our Step-by-step Guide to file CMP-02

Also, furnish statement in form ITC-03 within 60 days of commencement of the FY 2018-19 to declare the ITC claim that has to be reversed on inputs/capital goods in stock, in semi-finished or in finished goods.

What is meant by cancellation of registration?

Cancellation of GST registration simply means that the taxpayer will not be a GST registered person any more. He will not have to pay or collect GST.

Consequences of Cancellation

• The taxpayer will not pay GST anymore
• For certain businesses,  registration under GST is mandatory. If the GST registration is cancelled and business is still continued, it will mean an offence under GST and heavy penalties will apply.

Who can cancel the GST registration?

Cancellation of GST registration can be done by-

*** Application for cancellation, in case of voluntary registrations made under GST, can be made only after one year from the date of registration.

Let us take up each case.

Cancellation when Turnover is less than 20 lakhs

Every person who was registered under old laws had to mandatorily migrate to GST. Many such persons are not liable to be registered under GST.

For example, the threshold under VAT in most states was 5 lakhs whereas it is 20 lakhs under GST. However, do make sure you are not making inter-state supplies since registration is mandatory for inter-state suppliers except for service providers.

Such a taxpayer can submit an application electronically in FORM GST REG-29 at the common portal.

The proper officer shall, after conducting an enquiry as required will cancel the registration.

Here are the steps of cancelling on GST Portal-

Step 1

Log in to the GST Portal and click the Cancellation of Provisional Registration

Step 2

• The Cancellation page opens.
• Your GSTIN and name of business will show automatically.
• You are required to give a reason for cancellation.

You will be asked if you have issued any tax invoices during the month.

Simply fill up the details of authorized signatories, place. Finally, sign off with EVC with you are a proprietorship or a partnership.  LLPs & Companies must mandatorily sign with DSC.

Note: Taxpayers who have not issued tax invoice can avail above service. If the taxpayer has issued any tax invoice then FORM GST REG-16 needs to be filed.Refer below.

Cancellation by taxpayer in other cases

Why does a taxpayer wish to cancel his registration?

1. The business has been discontinued
2. The business has been transferred fully, amalgamated, demerged or otherwise disposed —The transferee (or the new company from amalgamation/ demerger) has to get registered. The transferor will cancel its registration if it ceases to exist.
3. There is a change in the constitution of the business   (For example- Private limited company has changed to a public limited company)

Forms for cancellation

All those who cannot follow the above method must file an application for cancellation in FORM GST REG 16. The legal heirs of the deceased taxpayer will follow the same procedure as below.

• Application for cancellation has to be made in FORM GST REG 16.
• The following details must be included in FORM GST REG 16-
  • Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
  • Liability thereon
  • Details of the payment
• The proper officer has to issue an order for cancellation in FORM GST REG-19 within 30 days from date of application. The cancellation will be effective from a date determined by the officer and he will notify the taxable person

Cancellation by tax officer

Why will the officer cancel registration?

The registration can be cancelled, if the taxpayer-

(a) Does not conduct any business from the declared place of business OR

(b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions) OR

(c) Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)

Procedure

• If the proper officer has reasons to cancel the registration of a person then he will send a show cause notice to such person in FORM GST REG-17.

• The person must reply in FORM REG–18 within 7 days from date of service of notice why his registration should not be cancelled.

• If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in FORM GST REG –20.

• If the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.

Revocation of cancellation of registration

What is revocation of cancellation?

Revocation means the official cancellation of a decision or promise. Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.

When is revocation of cancellation applicable?

This is applicable only when the tax officer has cancelled the registration of a taxable person on his own motion. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.

Procedure

• A registered person can submit an application for revocation of cancellation, in FORM GST REG-21, if his registration has been cancelled suo moto by the proper officer.

• He must submit it within 30 days from the date of service of the cancellation order at the Common Portal.

• If the proper officer is satisfied he can revoke the cancellation of registration by an order in FORM GST REG-22 within 30 days from the date of receipt of the application. Reasons for revocation of cancellation of registration must be recorded in writing.

• The proper officer can reject the application for revocation by an order in FORM GST REG-05 and communicate the same to the applicant.

• Before rejecting, the proper officer must issue a show cause notice in FORM GST REG–23 for the applicant to show why the application should not be rejected. The applicant must reply in FORM GST REG-24 within 7 working days from the date of the service of notice.

• The proper officer will take decision within 30 days from the date of receipt of clarification from the applicant in FORM GST REG-24.

Note: Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first along with payment of all dues amounts of tax, interest & penalty.

Difference between PTRC and PTEC Registration for Professional Tax in India

Key Difference: PTRC stands for Professional Tax Registration Certificate, and PTEC stands for Professional Tax Enrollment Certificate. A business usually requires both to conduct business. The process to register for the PTRC and PTEC is usually the same, but the processes differ as per state.

The PTRC and PTEC are two difference certificates that are commonly required by a business operating in India. PTRC stands for Professional Tax Registration Certificate, and PTEC stands for Professional Tax Enrollment Certificate. A business usually requires both to conduct business.

The function of a PTRC is to allow the employer to deduct and deposit professional tax to and from the salary of its employees. The PTEC, on the other hand, allows the company to pay the company’s and their director’s professional tax. Hence, a regular company required both, a PTRC and a PTEC, as by law it has to pay its own professional tax, as well as the professional tax for all its employees. However, in instances where a company does not have any payable employees, then they will only require a PTEC, and not a PTRC. This is especially the case for professional practitioners such as CAs, Doctors, Advocates, Architects, etc. They usually have their own registered practices, but may not have employees that meet the criteria for professional tax.

 The regulations regarding PTRC and PTEC differ as per state, as well as the process of registering for the certificates. However, the common process is that a form must be submitted online by uploading it electronically to the website. After submission, a confirmation must be downloaded and must be submitted along with other document proofs such as copy of PAN card, Proof of the Constitution of Business, Proof of the Residence of the Partners, Director & Proprietor, Proof of the Place of Business (Address Proof), Blank Cancelled Cheque, Shop and Establishment Certificate, as well as the PAN and PTEC Details of all the Partners or Directors and the details of the number of employees and their salary slabs. The process for registration is usually the same for both PTRC and PTEC, in fact they can be registered for on the same form and at the same time.

Comparison between PTRC and PTEC Registration for Professional Tax in India:

	PTRC Registration	PTEC Registration
Stands for	Professional Tax Registration Certificate	Professional Tax Enrollment Certificate
Required for	Professional Tax in India	Professional Tax in India
Description	A certificate obtained by an employer to deduct and deposit professional tax from employees’ salary.	A certificate obtained by an employer to pay their own professional tax, as well as by professional practitioners such as CAs, Doctors, Advocates, Architects, etc. to pay their own professional tax.
Purpose	To deduct and deposit professional tax from employees’ salary.	For professionals to pay their own professional tax
Process for registration	Differs as per state. However, commonly a form must be uploaded electronically on to the website for registration.
Common documents required for registration	Acknowledgement of Online submitted form along with the printout of the originally submitted form Self Attested Copy Of PAN Card Proof of the Constitution of Business Proof of the Residence of the Partners, Director & Proprietor Proof of the Place of Business (Address Proof) Blank Cancelled Cheque Shop and Establishment Certificate
Additional documents required for registration	PAN and PTEC Details of all the Partners or Directors	Details of the number of employees, as well as their salary slabs

Section 24 of GST – Compulsory registration in certain cases

Section 24 of GST – Compulsory registration in certain cases. Detailed Analysis of GST Section 24 of GST Act 2017 – Compulsory registration in certain cases. Everything you want to know about GST all Sections. Section Wise Analysis of GST Act 2017, Chapter Wise Analysis of GST All Sections. in this article you may find complete details regarding Section 24 of GST Act 2017 – Compulsory registration in certain cases, gst all sections and definitions

Section 24 of GST – Compulsory registration in certain cases

Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,–

• (i) persons making any inter-State taxable supply;
• (ii) casual taxable persons making taxable supply;
• (iii) persons who are required to pay tax under reverse charge;
• (iv) person who are required to pay tax under sub-section (5) of section 9;
• (v) non-resident taxable persons making taxable supply;
• (vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
• (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
• (viii) Input Service Distributor, whether or not separately registered under this Act;
• (ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
• (x) every electronic commerce operator;
• (xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
• (xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.

As per Section 22 there are certain conditions subject to fulfilment of which registration must be taken. However, Section 24 enlists 11 types of persons who shall compulsorily obtain the registration even though these persons do not trigger the provisions prescribed under Section 22. Thus Section 24 is an overriding section that makes it mandatory to obtain registration by certain prescribed persons even though the conditions prescribed under section 22 are not met.

Further, the Government on the recommendations of the Council may notify such other person or class of persons who are required to compulsorily obtain the registration.

Categories of persons who shall be required to be registered under this Act irrespective of the threshold

Notwithstanding anything discussed in the paragraph above, the following categories of persons shall get registered compulsorily under this Act:

• Persons making any inter-State taxable supply;
• Casual taxable persons making taxable supply;
• Persons who are required to pay tax under reverse charge;
• Persons who are required to pay tax under sub-section (5) of section 9 (electronic commerce operator)
• Non-resident taxable persons making taxable supply;
• Persons who are required to deduct tax under section 51 (Tax Deduction at Source);
• Persons who supply goods or services or both on behalf of other registered taxable persons whether as an agent or otherwise;
• input service distributor;
• persons who supply goods and/or services, other than supplies specified under subsection (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52,
• Every electronic commerce operator;
• every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person; and
• Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

Section 22 of GST – Persons liable for registration

Section 22 of GST – Persons liable for registration. Detailed Analysis of GST Section 22 of GST Act 2017 – Persons liable for registration. Everything you want to know about GST all Sections. This Act may be called the CGST Act, 2017. Section Wise Analysis of GST Act 2017, Chapter Wise Analysis of GST All Sections. in this article you may find complete details regarding Section 22 of GST Act 2017 –Persons liable for registration, gst all section and definitions. 

Section 22 of GST – Persons liable for registration

(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:

Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.

(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

Explanation.– For the purposes of this section,–

• (i) the expression “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;
• (ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;
• (iii) the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.

FSSAI Registration

*Do I need to apply for an FSSAI Registration ?*

*Punishment for carrying out a business without FSSAI licence-*

If any person or food business operator (except the persons exempted from licensing under sub-section (2) of section 31 of this Act), himself or by any person on his behalf who is required to obtain licence, manufacturers, sells, stores or distributes or imports any article of food without licence, shall be punishable with imprisonment for a term which may extend to six months and also with a fine which may extend to five lakh rupees.

*FSSAI Registration*-
FSSAI Registration issued by FSSAI is required for carrying on activities related to any stage of manufacturing, processing, packaging, storage, transportation, distribution of food.

*License Categories*-
FSSAI License can be divided into two categories State level License and Central License. Hotel, Restaurant and medium size food manufacturers are covered under State license. Large size food manufacturers come under Central licensing.