When and How To Cancel Your GST Registration
Cancelling your GST (Goods and Services Tax) registration is a big decision that impacts your company's operations. This tutorial thoroughly explains the eligibility requirements, procedure, and repercussions when and how to cancel your GST registration. If you are looking for GST Registration Online in India, reach out to a reputed company like Eazy Startups for assistance.
Let's delve into the topic:-
1.
Reasons to Cancel GST Registration
2.
Who Can Initiate GST Cancellation?
3.
Procedure for Canceling GST Registration
4.
Documents Required for Cancellation
5.
Consequences of GST Cancellation
1. Reasons to Cancel
GST Registration:
You may need to cancel your GST
registration for several reasons. Examples of typical situations are:
·
Business Closure: The selling or
discontinuation of a business.
·
Business Structure
Change:
A company merger, acquisition, or reorganization.
·
Annual Turnover Falls
Below Threshold: If the annual turnover falls below the GST threshold (20 lakhs
for most businesses).
·
Eligibility for
Exemption:
If a registered business obtains GST exemption or converts to a composition
scheme.
·
No Requirement for GST
Registration: Some companies may choose not to register for GST, even if
they may subsequently determine it is no longer advantageous.
Because
unjustified cancellations might result in penalties, verifying if your company
is eligible for deregistration is crucial.
2. Who
Can Initiate GST Cancellation?
GST cancellation can be initiated by:
·
The Taxpayer: When the taxpayer voluntarily opts to cancel the
registration.
·
The Tax Officer: If the officer
believes the business no longer qualifies for GST (e.g., inactivity, legal
non-compliance).
·
Legal Heirs: In case of a sole
proprietor's death, the legal heirs may cancel the registration.
·
Knowing who can initiate cancellation can help in navigating the
process more smoothly.
3. Procedure for
Cancelling GST Registration:
The cancellation process is relatively
straight forward:
·
Log into the GST Portal: Enter your login
information to access the GST portal.
·
Go to
"Cancellation of Registration Application": Navigate to Services
> Registration > Cancellation Application.
·
Fill out Form GST
REG-16.
This form requires Information such as contact data, the cause for the
cancellation, and tax obligations.
· Submit supporting
documentation: Documentation may be required if you have restructured, sold,
or closed the firm.
·
Tax Officer
Verification: A tax officer examines your application once it is submitted
and can request more information.
4. Documents Required
for Cancellation:
You might require the following to back
up your cancellation request:
·
Proof of Business
Closure:
A document attesting to the sale or closure of the business, if appropriate.
·
Tax Liability Statement: A statement outlining
any outstanding tax obligations is a tax liability statement.
·
Completed GST Returns: Make sure any
outstanding GST returns are submitted to prevent issues during the cancellation
process.
The
cancellation procedure will go more quickly if these documents are prepared.
5. Consequences of GST
Cancellation:
After the cancellation of the GST
registration:
·
Cannot Charge GST: You can no longer
charge clients for GST.
·
Pending Liabilities: Any unpaid GST debt
needs to be settled.
·
Limitation on Tax Credits: Input tax credits will no longer be
available.
·
Records Maintenance: Save company records
for at least 72 months after the cancelation date for future reference and
audits.
Being
aware of these repercussions aids in making an informed choice regarding the
cancellation of GST registration.
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