GST Cancellation and Revocation: A Step-by-Step Guide
The Goods and Services Tax (GST) is a consumption-based tax levied on the supply of goods and services in India. GST registration is mandatory for businesses with a turnover exceeding ₹40 lakhs (₹20 lakhs for special category states). However, in certain circumstances, businesses may need to cancel or revoke their GST registration. In this guide, we will walk you through the process of GST cancellation and revocation.
GST Cancellation
GST cancellation refers to the process of canceling a business’s GST registration. This can be done voluntarily by the business or suo motu by the GST authorities.
Reasons for GST Cancellation
A business may need to cancel its GST registration in the following circumstances:
1. Closure of Business: If a business is closed or wound up, it must cancel its GST registration.
2. Change in Business Structure: If a business changes its structure, such as from a proprietorship to a private limited company, it may need to cancel its existing GST registration and obtain a new one.
3. Voluntary Cancellation: A business may voluntarily cancel its GST registration if it is no longer liable to pay GST.
Process of GST Cancellation
The process of GST cancellation involves the following steps:
1. Application for Cancellation: The business must submit an application for cancellation of GST registration in Form GST REG-16.
2. Verification: The GST authorities will verify the application and may request additional information or documents.
3. Cancellation Order: If the application is approved, the GST authorities will issue a cancellation order in Form GST REG-17.
GST Revocation
GST revocation refers to the process of revoking a cancellation order. This can be done if the business wishes to revive its GST registration.
Reasons for GST Revocation
A business may need to revoke a cancellation order in the following circumstances:
1. Error in Cancellation: If the cancellation order was issued in error, the business may apply for revocation.
2. Change in Business Circumstances: If there is a change in business circumstances, such as a change in ownership or business structure, the business may apply for revocation.
Process of GST Revocation
The process of GST revocation involves the following steps:
1. Application for Revocation: The business must submit an application for revocation of cancellation order in Form GST REG-21.
2. Verification: The GST authorities will verify the application and may request additional information or documents.
3. Revocation Order: If the application is approved, the GST authorities will issue a revocation order in Form GST REG-22.
Conclusion
GST cancellation and revocation are critical processes that businesses must follow in certain circumstances. By understanding the reasons and process for GST cancellation and revocation, businesses can ensure compliance with GST regulations and avoid penalties.