When a Goods and Services Tax (GST) registration is revoked, the taxpayer ceases to be a registered entity under the GST framework. Consequently, they are no longer obligated to remit or collect GST, claim input tax credits, or submit tax returns. This process of GST registration cancellation is governed by Section 29 of the Central Goods and Services Tax (CGST) Act and Rules 20 to 22 of the CGST Rules.

GST Registration Cancellation Notice through Form REG-17

Under GST provisions, both taxpayers and the appropriate officer can initiate the cancellation of GST registration. If a proper officer identifies valid reasons to begin the cancellation process, they can do so by issuing a show-cause notice using Form GST REG-17. The officer may initiate these proceedings under various circumstances, including:

• A taxpayer registered under the composition scheme failing to file returns for three consecutive periods.
• Non-composition taxpayers failing to file returns for six continuous tax periods.
• An assessee who obtained voluntary GST registration but did not commence business operations within six months of registration.
• The registered taxpayer violating any provisions of the GST Act or its associated rules.
• GST registration being acquired through fraudulent means or intentional misrepresentation.
• A taxpayer supplying goods or services without proper invoices, or issuing invoices without actual supply, to evade tax or wrongly claim input tax credit.
• Failure by a taxpayer to pay tax, interest, or penalties to the GST department within three months of the payment due date.
• Cessation of the taxpayer's business operations.
• Demise of a sole proprietor.
• A change in the taxpayer's constitution that results in an alteration of their Permanent Account Number (PAN).
• The concerned individual no longer being required to register under GST or to collect or pay tax.
• Business transfer due to a merger or amalgamation.

However, before any GST registration is canceled, the taxpayer must be given a reasonable opportunity to be heard. The officer must issue a notice in Form GST REG-17 that includes:

• A clear statement of the grounds for proposing GST registration cancellation.
• An instruction for the taxpayer to submit a reply within seven working days from the date of serving the Form GST REG-17 notice.
• The scheduled date and time for a personal hearing, if deemed necessary.

If the proper officer finds the taxpayer's reply satisfactory, they may terminate the proceedings and issue an order in Form GST REG-20. Conversely, if the officer is not satisfied, an order for GST registration cancellation will be issued in Form GST REG-19. This cancellation order will be dispatched within 30 days from the date of the reply to the show-cause notice.

Form GST REG-20: Order to Drop Registration Cancellation

The proper officer reviews the taxpayer's response submitted in Form GST REG-18. If the officer is content with the explanation, they can conclude the cancellation proceedings by issuing an order in Form GST REG-20. This form typically contains:

• A reference number and the date of issuance.
• The show-cause notice number and its date.
• An analysis of the reasons why the cancellation proceedings are being discontinued.

Provision under Rule 22 (4): According to this rule, if a taxpayer does not formally reply to the notice but instead files all outstanding returns and settles all due taxes, including applicable interest and late fees, the proper officer has the discretion to cease the proceedings and issue an order in Form GST REG-20. Upon receiving this order, the cancellation proceedings are officially closed.

How to File Form GST REG-18 to Respond to a Show-Cause Notice

Taxpayers submit Form GST REG-18 as a direct response to a show-cause notice received in Form GST REG-17. This form must be filed within seven working days from the date the show-cause notice was received.

Step 1: Access the GST portal by logging in, then navigate to 'Services' > 'Registration' > 'Application for filing clarifications'.

Step 2: Input the application reference number found on the show-cause notice (Form GST REG-17).

Step 3: Click 'Search' to locate the relevant form. Provide your reply and attach any necessary supporting documents. The maximum file size for uploads is 1MB.

This response is then transmitted to the proper officer for their review. If the officer is satisfied, they may discontinue the GST registration cancellation proceedings. If not, the officer may proceed to cancel the GST registration by issuing an order in Form GST REG-19.

Form GST REG-19: Registration Cancellation Order for Taxable Persons

A proper officer can issue Form GST REG-19 to revoke GST registration if they determine that the registered taxpayer no longer meets the eligibility criteria for GST registration. This order is issued under the following conditions:

1. If the officer is not satisfied with the reply in Form GST REG-18: In this situation, the proper officer can issue an order in Form GST REG-19 to cancel the GST registration.
2. When the taxable person requests cancellation: If a taxable person wishes to cancel their GST registration, they submit a request using Form GST REG-16. If the proper officer approves this request, they then issue an order in Form GST REG-19 to confirm the GST registration cancellation.

This cancellation order includes crucial information such as:

• The application reference number and its date.
• The effective date from which the GST registration is canceled.
• The specific reasons justifying the cancellation.
• The GST amount payable following the cancellation.

Effective date of GST registration cancellation when initiated by a tax officer: The effective date of cancellation will be the date specified in the cancellation order, Form GST REG-19.

Consequences of Registration Cancellation

Once a tax official cancels a GST registration, the following events occur:

1. Taxpayers are notified of the cancellation via SMS and email.
2. The cancellation order, issued in GST Form REG-17, is sent to taxpayers and is also made available on their dashboard for viewing, printing, and downloading.
3. Taxpayers are no longer permitted to file returns or upload invoices for periods after the cancellation date. Similarly, GST Practitioners (GSTPs) cannot perform GSTP functions post-cancellation.
4. After the cancellation order is issued, taxpayers cannot modify registration details. However, email and mobile numbers can still be updated until all outstanding dues are settled.
5. The GSTIN status transitions from 'proceeding for cancellation initiated' to 'inactive', and this change is communicated to other relevant tax authorities.