GST (Goods and Services TAX) is the new tax regime introduced to bring more transparency to the tax system by eliminating several forms of taxes like VAT, excise duty, etc. GST registration is mandatory for businesses with an annual turnover exceeding a certain threshold. However, sometimes in certain circumstances, the tax officer may cancel the GST registration of a business. This can be done because of several reasons. To save yourself from this difficulty, you must be aware of the reasons behind it.
Your business may face cancellation of registration under GST in the following situations:
The tax officer can initiate cancellation procedures if your company consistently fails to file GST returns for six months.
If your business fails to commence operations within six months of obtaining GST registration, this may also initiate cancellation proceedings.
You may request for cancellation of GST registration if you want to terminate it voluntarily. However, the tax officer may reject the application if there are any outstanding liabilities or legal proceedings.
The tax officer can commence cancellation procedures if there is a discrepancy between the information supplied in the GST registration application and the actual company activities.
If your business fails to maintain proper records of its transactions, the tax officer may initiate cancellation proceedings.
Here are the steps involved in the cancellation of GST registration:
The tax officer begins the cancellation process by sending the registered business a show-cause notice. The cause for the cancellation and the date and time of the hearing are all included in the notification.
Within the allotted time, the registered business must respond to the show-cause notice, either admitting or disputing the grounds for cancellation. If the registered firm acknowledges the grounds for cancellation, it must assure that all obligations will be fulfilled before the termination date.
Once the tax office has received the show-cause notice response, a personal hearing will be held. The registered firm might offer further details and explanations at the hearing to persuade the tax officer to revoke the registration.
After reviewing the submission and holding the hearing, the tax officer may accept or reject the registered company's explanation. If the tax office is unsatisfied with the reason, he may issue an order in Form GST REG-19 stating the cancellation's effective date.
The registered firm must relinquish the GST certificate and all other GST registration documents within a certain time frame.
The registered corporation must pay all dues and liabilities before the cancellation occurs.
To summarise, the cancellation of a GST registration by a tax official is a serious matter that can have major consequences for a firm. To prevent cancellation, following GST requirements and filing GST returns regularly is critical.
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Here is the list of documents:
It may take up to 30 days to complete the procedure of GST registration cancellation.