Cancellation of GST Registration (Section 29 of CGST Act. 2017)

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(1) Cancellation of GST Registration by Proper Officer on his Own Motion or on an Application filed by the Registered Person or by his Legal Heirs [Section 29(1) of CGST Act] :

The proper officer may.—

— either on his own motion or

— on an application filed by the registered person or

— by his legal heirs, in case of death of such person,

— cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where.—

  1. the business has been discontinued, transferred fully for any reason including death of the proprietor. amalgamated with other legal entity, demcrged or otherwise disposed of; or
  2. there is any change in the constitution of the business; or
  3. the taxable person, other than the person registered under section 25(3) (i.e. voluntary registration), is no longer liable to be registered under section 22 or section 24.

(2) Cancellation of GST Registration by the Proper Officer in Certain Cases [Section 29(2) of CGST Act] :

The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where.—

  1. a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
  2. a person paying tax under section 10 (i.e. composition scheme) has not furnished returns for three consecutive tax periods; or
  3. any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
  4. any person who has taken voluntary registration under section 25(3) has not commenced business within six months from the date of registration: or
  5. registration has been obtained by means of fraud, willful misstatement or suppression of facts:

However, the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

(3) Cancellation not to affect Liability to Pay Tax or to discharge any obligation for any period prior to date of cancellation [Section 29(3)]:

The cancellation of registration under this section shall not affect the liability of the person to pay lax and other dues under this Act or to discharge any obligation under this Act or the rules made there under for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

(4) Cancellation under SGST / UGST to be deemed to be cancellation under CGST Act [Section 29(4)] :

The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under this Act.

(5) Amount equivalent to input lax credit to be paid back on cancellation of registration [Section 29(5)] :

Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to—

— the credit of input (ax in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or

— the output tax payable on such goods.

whichever is higher, calculated in such manner as may be prescribed:

However, in case of capital goods or plant and machinery. the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher. (See relevant rule 44 of CGST Rules)

(6) Manner of Calculation of amount payable under Section 29(5) :

The amount payable under section 29(5) shall be calculated in such manner as may be prescribed.

(7) Revocation of Cancelled GST Registration (Section 30 of CGST Act. 2017) :

  1. When the registration has been cancelled by the Proper Officer (Superintendent of Central Tax) on his own motion and not on the basis of an application ,then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, in FORM GST REG-21, to the Proper Officer (Assistant or Deputy Commissioners of Central Tax), within a period of thirty days from the date of the service of the order of cancellation of registration at the com – mon portal, either directly or through a Facilitation Centre notified by the Commissioner:
  2. However, if the registration has been cancelled for failure to furnish returns, application for revocation shall be filed, only after such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable to – wards interest, penalty and late fee in respect of the said returns.
  3. On examination of the application if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, then he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
  4. However, if on examination of the application for revocation, if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is not satisfied then he will issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant has to furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG24.
  5. Upon receipt of the information or clarification in FORM GST REG-24, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose of the application within a period of thirty days from the date of the receipt of such information or clarification from the applicant. In case the information or clarification provided is satisfactory, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose the application as per para (iii) above. In case it is not satisfactory the applicant will be mandatorily given an opportunity of being heard, after which the Proper Officer (Assistant or Deputy Commissioners of Central Tax) after recording the reasons in writing may by an order in FORM GST REG- 05, reject the application for revocation of cancellation of registration and communicate the same to the applicant.
  6. The revocation of cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a revocation of cancellation of registration under Central Goods and Services Tax Act

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