How to Cancel GST Registration?

Life in the business world is constantly evolving. Your business structure might change, you might decide to close down operations, or perhaps your turnover falls below the threshold requiring GST registration. Whatever the reason, there might come a time when you need to cancel your Goods and Services Tax (GST) registration in India. Understanding the process for GST registration cancellation in 2025 is crucial to ensure a smooth and legally compliant exit from the GST regime.

Why Would You Need to Cancel Your GST Registration?

Several scenarios might necessitate the cancellation of your GST registration:

• Closure of Business: If you are permanently shutting down your business operations.

• Change in Business Structure: If your business structure changes (e.g., from a sole proprietorship to a partnership), a new GST registration might be required, necessitating the cancellation of the old one.  

• Falling Below the Threshold: If your aggregate turnover in a financial year falls below the prescribed threshold for GST registration (currently ₹40 lakhs for goods and ₹20 lakhs for services, with some exceptions), you might choose to cancel your registration.

• Transfer of Business: If your business is being sold or transferred to another entity, the new owner will need a fresh GST registration, and you'll need to cancel your existing one.  

• Discontinuation of Taxable Supply: If your business ceases to make any taxable supplies of goods or services.

• Any Other Sufficient Reason: There might be other valid reasons as determined by the tax authorities.

Who Can Apply for GST Registration Cancellation?

The following individuals or entities can apply for the cancellation of their GST registration:

• The registered person themselves.

• In the case of death of the registered person, their legal heir.

• The officer in charge of a business managed by the Central or State Government.

• Any other person authorized to act on behalf of the registered person.

The Step-by-Step Process for Cancelling GST Registration in 2025

The process for cancelling your GST registration is primarily online through the GST portal. Here's a detailed step-by-step guide for 2025:

1. Access the GST Portal: Go to the official GST portal.

2. Log In to Your Account: Enter your username and password to log in to your GST account.

3. Navigate to Cancellation Application: Once logged in, navigate to the "Services" tab. Under the "Registration" section, click on "Application for Cancellation of Registration."  

4. Provide Basic Details: You will be directed to a page where some of your basic registration details will be pre-filled. You will need to select the "Reason for Cancellation" from the dropdown menu. Choose the reason that best applies to your situation (e.g., closure of business, turnover below threshold).

5. Enter Cancellation Details: Depending on the reason for cancellation, you might need to provide additional information, such as:

• Date of Discontinuation of Business: The date from which you ceased to carry on the business.

• Details of Assets: Information about any assets held by the business.

• Details of Liabilities: Information about any outstanding liabilities.

• Details of the Transferee (if applicable): If the business has been transferred, you will need to provide the transferee's details, including their GSTIN.  

6. Furnish Details of Stock: You will need to provide details of the stock held on the date of cancellation, including the value and tax paid on it. This information is crucial for potential reversal of input tax credit.  

7. Provide Bank Account Details: You will need to provide details of your bank account where any potential refund arising from the cancellation can be credited.

8. Verification: Once you have filled in all the necessary details, you will need to verify the information provided. You can do this by selecting the authorized signatory and submitting the application either through:

• Digital Signature Certificate (DSC): If you are a company or a Limited Liability Partnership (LLP).

• Electronic Verification Code (EVC): An OTP will be sent to the registered mobile number and email address of the authorized signatory. Enter the OTP to verify.

9. Acknowledgement: Upon successful submission of the application, you will receive an Application Reference Number (ARN). Keep this ARN safe for future reference and tracking the status of your cancellation application.  

Post-Application Process and Important Considerations:

• Tax Officer Scrutiny: Once you submit the cancellation application, it will be processed by the jurisdictional tax officer. The officer may issue a notice seeking further clarification or information. You will need to respond to any such notice within the stipulated time.  

• Order of Cancellation: If the tax officer is satisfied with the reasons and the information provided, they will issue an order for the cancellation of your GST registration. This order will specify the effective date of cancellation.  

• Final Returns: Even after applying for cancellation, you will be required to file all pending GST returns up to the effective date of cancellation. This includes filing GSTR-1 (outward supplies), GSTR-3B (summary of outward supplies and input tax credit), and any other applicable returns.

• Final Return (GSTR-10): Additionally, you will need to file a final return in Form GSTR-10 within three months of the date of cancellation or the date of the cancellation order, whichever is later. This return provides details of the stock held on the date of cancellation and any tax payable or refundable.  

• Input Tax Credit Reversal: Depending on the circumstances of cancellation, you might be required to reverse the input tax credit availed on the stock held on the date of cancellation.

• Liability for Past Dues: Cancellation of GST registration does not absolve you of any liability for taxes, interest, or penalties that may be outstanding for the period before the cancellation.  

Seeking Expert Assistance for GST Registration

The process of cancelling GST registration can sometimes be complex, especially if there are pending returns or intricate financial implications. It's always advisable to seek professional help to ensure a smooth and compliant cancellation process. Platforms like Online Legal India can provide expert guidance and assistance with filing your cancellation application, understanding the implications, and ensuring all legal requirements are met. Their expertise can save you time, effort, and potential complications.

Staying Updated for 2025

While the general process for GST cancellation is likely to remain similar in 2025, it's essential to stay updated on any potential changes or new rules introduced by the government. Regularly checking the official GST portal and consulting with tax professionals will ensure you are following the latest regulations.

Cancelling your GST registration is a significant step that requires careful attention to detail and adherence to the prescribed procedures. By understanding the process and fulfilling all the necessary requirements, you can successfully navigate this transition and ensure compliance with the GST laws in 2025.