Cancellation of GST Registration Procedure with FAQs

Q.1 Under which circumstances can a registered Taxpayer file for cancellation of GST registration?

Ans: A registered Taxpayer can file for cancellation of GST registration on the occurrence of any of the following events:

1. Discontinuance of business or closure of business.

2. Taxable person ceases to be liable to pay tax.

3. Transfer of business on account of amalgamation, merger, de-merger, sale, leased or otherwise.

4. Change in constitution of business leading to change in PAN.

5. Registered voluntarily, but did not commence any business within specified time.

6. Taxable person no longer liable to be registered under GST Act.

Q.2 Who all can file for cancellation of GST registration?

Ans: The following can file for cancellation of GST registration:

1. Existing Taxpayer

2. Migrated Taxpayer whose application for enrolment has been approved

3. Migrated Taxpayer who has not filed any other form after filing of application for enrolment

Q.3 From where can I file for cancellation of GST registration?

Ans: Application for GST registration can be accessed from the GST Portal, after logging in.

The path is Services > Registration > Application for Cancellation of Registration.

Q.4 Who all cannot file for cancellation of GST registration?

Ans: The following people cannot file for cancellation of GST registration:

1. Persons registered as Tax Deductors / Tax Collectors

2. Persons to whom UIN has been allotted

Q.5 What is the pre-condition for cancellation of GST registration in case of amalgamation / merger / change in constitution of business?

Ans: In case of amalgamation / merger / change in constitution of business, the new entity (i.e. transferee entity) must be registered with the tax authority, and must have a valid GSTIN at the time of filing for cancellation of GST registration by the old amalgamated / merged / transferred entity.

Q.6 What is the implication of tax payable on stock while filing for cancellation of GST registration?

Ans: While filing the application for cancellation of GST registration, the Taxpayer needs to fill the value of stock and corresponding tax liability on the stock, and accordingly offset the liability (tax payable) from Electronic Cash Ledger / Electronic Credit ledger equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished goods 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.

In case of capital goods or plant and machinery, the 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, whichever is higher.

In case of Nil or no amount to be entered by Taxpayer in value of stock and tax payable section, the Taxpayer can still submit the form.

Q.7 Why is the Submit button in form for cancellation of GST  registration not getting active despite filling it out?

Ans: The Submit button gets activated once all the mandatory fields (other than signatures) are filled. Please check all the mandatory fields carefully and provide information for any field that you might have missed.

Q.8 What is the duration within which Taxpayers need to file for cancellation of GST registration?

Ans: Taxpayers need to file for cancellation of GST registration within 30 days from the date from which registration is liable to be cancelled, in case of voluntary cancellation.

Q.9 Is there any limitation on filing for GST registration by Taxpayers who had registered voluntarily?

Ans: In case a Taxpayer has taken voluntary registration in GST regime, he cannot file application for cancellation of registration before the expiry of one year.

Q.10 Can I file for amendment of Core fields after applying for cancellation of GST registration?

Ans: No. Once you have submitted the application for cancellation of registration, and ARN has been generated, you will not be allowed to file for amendment of Core fields.

Q.11 Can I file for amendment of Non-Core fields after applying for cancellation of GST registration?

Ans: Yes. Once you have submitted the application for cancellation of registration, and ARN has been generated, you can file for amendment of Non-Core fields.

Q.12 I was issued a temporary-ID by Suo Moto registration. Can I file for cancellation of this GST registration?

Ans: No. You cannot file for cancellation of Suo Moto registration. However, you can file an appeal against the issuance of Suo Moto registration to you at the appropriate forum, as provided in law.

Reason of Tax Deductions

Procedure for Cancellation of Registration

How can I file for cancellation of GST registration?

To file for cancellation of GST registration, please perform the following steps:

1. Visit the URL: https://www.gst.gov.in.

2. Login to the GST Portal with your user-ID and password.

3. Navigate to the Services > Registration > Application for Cancellation of Registration option.

4. The form – Application for Cancellation of Registration contains three tabs. Ensure that the Basic Details tab is selected by default.

Note: The first tab contains pre-filled information in sections of Basic Details and Address of Principal Place of Business.

5. Either fill your Address for Future Correspondence manually, or check the option of Address same as above to copy the same address as in the Address of Principal Place of Business field.

6. Click the SAVE & CONTINUE button.

Notes:

·         The tab Basic Details will change to blue colour and a tick mark will appear on it indicating that all the mandatory fields under this tab have been duly filled-in.

·         The next tab Cancellation Details will get active, requiring you to make suitable selections and provide relevant information in corresponding fields.

7. Select a suitable reason from the Reason for Cancellation drop-down list.

Notes: The following five reasons are available for selection:

a) Change in constitution of business leading to change in PAN

b) Ceased to be liable to pay tax

c) Discontinuance of business / Closure of business

d) Others

e) Transfer of business on account of amalgamation, merger, demerger, sale, leased or otherwise

Change in constitution of business leading to change in PAN:

a) Enter the date from which registration is to be cancelled.

b) Provide the GSTIN of the transferee entity under the Details for Transfer, Merger or Change in Constitution section. System will validate the same, and based upon it’s Legal Name of Business, will auto-populate the Trade Name.

Ceased to be liable to pay tax:

a) Enter the date from which registration is to be cancelled.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Discontinuance of business / Closure of business:

a) Enter the date from which registration is to be cancelled.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Others:

a) Specify the reason for cancellation.

b) Enter the value of stock and the corresponding tax liability on the stock.

c) Basis the entered stock details, enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.

d) On submitting the form, the amount will be deducted from the respective Electronic Cash Ledger, or the Electronic Credit Ledger, or both, and debit entries will be made.

Transfer of business on account of amalgamation, merger, demerger, sale, leased or otherwise:

a) Enter the date from which registration is to be cancelled.

b) Provide the GSTIN of the transferee entity under the Details for Transfer, Merger or Change in Constitution section. System will validate the same, and based upon it’s Legal Name of Business, will auto-populate the Trade Name.

8. Click the SAVE & CONTINUE button.

Notes:

·         This will mark the second tab also as complete.

·         The next tab, Verification will get activated.

9. Check the Verification statement box to declare that the information given in this form is true and correct, and that nothing has been concealed therefrom.

10. Select the name of the authorised signatory from the Name of Authorized Signatory drop-down.

11. Enter the Place of making this declaration.

Note: Notice that the system auto-populates the authorised signatory’s designation or status.

12. Sign the form by using either your Digital Signature Certificate (DSC), or the EVC option.

Notes:

·         For the purpose of simplicity, this user manual has followed the EVC path.

·         If using a DSC, you will be required to select your registered DSC from the emSigner pop-up window and then proceed from there accordingly.

13. Enter the OTP.

Notes:

·         On successfully filing the application for cancellation of registration, the system will generate the ARN and display a confirmation message.

·         A confirmation message will also be sent by GST Portal on your registered mobile phone number and e-mail-ID.

·         After this stage, the concerned Tax Official will review your application and take a decision accordingly.

14. To view the ARN, navigate to the Services > Registration > Track Application Status option.

15. Select Submission Period radio button.

16. Enter the From and To dates between which you filed for cancellation of registration.

17. Click the SEARCH button.

Note: The search result will display the ARN corresponding to your filed application.

GST on advance payments

Generally, GST is imposed on a supplier of goods and service at the time of receipt of payment. However, in some cases, an advance payment is first made by the recipient of the goods or/and service or both to the supplier. In this article, we will discuss the applicability of GST on advance payments.

GST on Advance Payment

When a payment is made ahead of its actual schedule such payment is termed as advance payment, such as making the payment for the goods or service before the receipt of goods or service. In addition to this, sometimes the supplier of the goods and service requires an advance payment as a safeguard against non-payment, or to cover its costs for supplying a product or rendering of a service.

For example, the rent of a banquet hall is Rupees 1,00,000 for a single day accommodation. To ensure that the booking gets confirm we have to make an upfront payment of Rupees 15,000 to the owner. This upfront payment is called an advance payment.

As mentioned above, GST is to be paid at the time of delivery of the goods or completion of services. However, an exception to this rule is the receipt of advances. Therefore, If a supplier demands an advance payment before delivering/rendering the goods or services as the case may be, GST has to be paid on the advance amount even if the goods have not been delivered or service has not yet been rendered.

GST Advance Receipt Voucher

The advance receipt voucher is required to contain the following details in order to comply with the GST rules:

• Name, address and GST Identification number of the supplier of the goods or/and service;
• The advance receipt voucher must contain a consecutive serial number not exceeding sixteen characters, containing alphabets or numerals or special characters;
• Date of issue;
• Name, address and GST Identification Number, if registered, of the recipient;
• Details of the of goods or services;
• Amount of advance received;
• The rate of tax;
• Amount of tax charged in regard to taxable goods or services;
• Place of supply along with the name of State and its code
• Whether the GST is payable under the reverse charge basis; and
• Signature or digital signature of the supplier or his authorised representative.

Treatment of Advance Received In GST Return

Details of the amount received as the advance are required to be mentioned in sr. no. 11A of the GSTR – 1 return. As it shows the figure of the advance money received in the tax period for which invoice has not been issued.

Additionally, it is important to note that in sr. no. 11A of the GSTR – 1 return figures of the advance money received must be bifurcated in two parts i.e. advance money received against intra-state supplies and advance money received against inter-state supplies. However, consolidated figures of the advance money received are to be stated in the same, details of each advance money received need not to be mentioned.

The gross amount of advance money received is required to be mentioned under the head ‘Gross Advance Received / Adjusted’ and matching tax liability is required to be reflected under ‘Central’ and ‘State/ UT’ head in case of intra-state supplies and under ‘integrated’ head in case of inter-state supplies.

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PERSON And Assessee

PERSON [ Section 2(31) ] The word “Person” is a very wide term and embraces in itself the following : Individual: It refers to a natural human being whether male or Female, Minor or Major. Hindu Undivided Family (HUF) : It is a relationship created due to operation of Hindu Law. The Manager of HUF is called “Karta” and its member are called ‘Coparceners’. Company: It is an artificial person registered under Indian Companies Act 1956 or any other Law. Firm: It is an entity which comes into existence as a result of partnership agreement. The Income Tax accepts only these entities as Firms which are accessed as Firms under Section 184 of the Act. Association of Persons (AOP) or Body of Individuals (BOI) : Co-operative societies, MARKFED, NAFED, etc are the example of such persons. When persons combine together to carry on a joint enterprise and they do not constitute partnership under the ambit of law, they are assessable as an Association of Persons. An A.O.P. can have firms, companies, associations and individuals as its members. A Body of Individual ( B.O.I.) cannot have non-individuals as its members. Only natural human being can be members of a Body of Individuals  Local Authority : Municipality, Panchayat, Cantonment Board, Port Trust etc. are called Local Authority. Artificial Judicial Person : Statutory Corporations like Life Insurance Corporation, a University etc. are called Artificial Judicial Persons. These are seven categories of person chargeable to tax under the Act. The aforesaid definition is inclusive and not exhaustive. Therefore, any person, not falling in the above-mentioned seven categories, may still fall in the four corners of the term “Person” and accordingly may be liable to tax under Sec.4.

Assessee  means a person by whom any tax or any other sum of money is payable under this Act and includes the following:

(i) Every person in respect of whom any proceeding under the Income-tax Act has been taken: for the assessment of his income or the income of any other person in respect of which he is assessable; or to determine the loss sustained by him or by such other person; or to determine the amount of refund due to him or to such other person. (ii) A person who is deemed to be an assessee under any provisions of this Act i.e. a person who is treated as an assessee. This would include the legal representative of a deceased person or the legal guardian of minor if minor is taxable separately. (iii) Every person who is deemed to be an assessee in default under any provisions of this Act. A person is said to be an assessee in default if he fails to comply with the duties imposed upon him under the Income-tax Act. For example: a person, paying interest to another person, is responsible for deducting tax at source on this amount and to deposit the tax with the Government. If he fails in either of these duties i.e., if he does not deduct the tax, or deducts the tax but does not deposit it with the Government, he shall be deemed to be an assessee in default. Every assessee is a 'person', but every person need not be an 'assessee'. For example, X, an individual has earned total income of Rs. 2,40,000 in the previous year. He is a person but not an assessee because his total income is less than the maximum exemption limit of Rs. 2,50,000 and no tax or any other sum is due from him. A person may not have his own assessable income but may still be an assessee. For example, an assessee, who has earned an income of Rs. 1,45,000 in a previous year, fails to deduct the tax at source on salary paid by him, which he was required to do under the Act, shall be deemed to be an assessee in default. Although, he is not assessable in respect of his own income, as it is below the maximum exemption limit, but shall still be an assessee for not deducting the tax at source, which he was obliged to do.

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32nd Meeting of GST Concil: GST Council's latest meeting decisions and their impact

The meeting of the GST Council's 32nd Council was concluded on January 10 and according to the expectations of the decisions taken in the interest of small and medium enterprises and business as per the requirement

In addition to this, consider other decisions, let's try to find out what the donors will have on their impact: -

 1.       Increase in GST Threshold Limit: -

At the time of GST imposing Threshold Limit GST, Rs 20 lakh was fixed, but the Central excise duty was Rs 150 lakh and hence the limit was considered low. The Prime Minister himself had talked of doing it up to 75 The Committee of Ministers also demanded to increase it, it was certain that the limit would increase and the same has been increased from Rs 20 lakh to Rs 40 lakh. This enhanced threshold will be only in relation to "goods" and that too only in relation to the sale of goods within the state, the threshold for service area will remain 20 lakh only. Now GST will be limited to different threshold limits for goods and services. This will benefit small traders and small industries, but the government has also thought about the effects on its revenue. In the states (hill and state of northeast), the limit would be 1 million and there would be 20 lakh and in other states where there was 20 lakh limit, the limit would be 40 lakh. It will also be done on the revenue of the states as it also provides that if the state wants to increase this limit and not want it, then not increase it. But whatever decision the state has to be made, it has to be told within a week. Now if some states increase and some live on the old border, then what will happen to "one country one state", for the services and the goods, then the threshold will now be separated and the states also have different limits Will happen. The decision regarding the threshold will be applicable from 1st April, 2019.

 
2. Limitation of composition increased to 150: - 

The final limit for composition tax was Rs 100 lakh and it has been decided to increase it from April 1, 2019 to 150 million. The government has already taken the right to increase this limit from Rs 100 lakh to 150 lakh by amending the GST Act, so the entire expectation of practicing 150 lakh in this meeting has been fulfilled.In addition, composition dealers had to fill quarterly returns with quarterly tax, in which it has now been decided that now they will have to pay annual return with quarterly tax. This is a good news for composition dealers and this decision will also be applicable from April 1, 2019.

 3. Composition Scheme for Service Sector: -

It has also been decided to bring a composition scheme for the service sector and it will provide service providers up to Rs 50 lakh and pay composition tax at the rate of 6 percent without any input claim. The composition scheme for the service sector is welcome, but the tax rate is higher than expected. In this regard, the rate of tax should be 3 to 4% but keeping it at 6% rate has reduced its utility considerably. This decision will also be applicable from April 1, 2019.

 4. GST issues related to real state and lottery: -

Prior to taking decisions on both these issues, this issue has been given to "Group of Matris" for reporting the issue and thus no decision has been taken on these issues in this meeting. 

5. No decision on the issue of cement and tire: -

There was no debate at the GST rate of cement and tire in this meeting, so this area has been disappointed in this meeting. The GST Council should now take a decision on this soon as both of these things have been kept at the same tax rate, where "sin and luxury" items are kept and against the basic format of GST.

6. Government will provide free billing and accounting software to dealers: -

This will be a public utility and the usefulness of this decision will depend on when and when it will be the quality of this software. If the government is able to deliver a good quality software dealer then it will be a very good facility for dealers.

There was no discussion in the meeting about the return of late fees for the dealers who filled the late fees, which it seems that the government is not taking a fair demand of these dealers seriously.

Concept of TCS return under GST

TCS provisions has been made effective from 01.10.2018

TCS refers to the tax collected by electronic commerce operator when supplier supplies goods or services through portal and the payment for that supply is collected by the E Commerce operator.

Eg:Flipkart,Amazon which sells products through their website and consideration is collected by E-commerce operators  after retaining commission and balance is paid to suppliers.

Before going to provision we need to know definition

As per 2(45) of cgst act “electronic commerce operator” means any person who owns,operates, or manages digital or electronic facility or platform for electronic commerce.

Mr.X is a supplier selling his own products through a website hosted by him.As per the definition Mr.X will come under the definition of an electronic commerce operator.However according to sec52,TCS required to be collected on the net value of taxable supplies made through it by other suppliers where consideration charged by ECO.In Case where someone is selling their own products through a website,there is no requirement to collect at source as per the provisions.

As per 2(44) “electronic” commerce means the supply of goods or services or both,including digital products over digital or electronic network

Provisions:

• Every E-commerce operator shall collect TCS at a rate not exceeding 1%on the net value of taxable supplies made through it by other suppliers where the consideration to such supplies is to be collected by the operator.

Note: if there is returning of supplies to suppliers,then the same shall be reduced from gross value,TCS shall be worked on such net figure(after such reduction).

• The amount collected so shall be paid to the central/state government respectively within 10 days after the end of the month in which such collection is made.

REGISTRATION PROVISIONS:

• as per 24(x) of cgst act every Electronic commerce operator is mandatorily required to take GST registration.
• Persons making supplies of services,other than supplies specified u/s9(5),through an ECO who is required to collect TCS u/s 52 and having aggregate turnover,not exceeding 20 lakhs in a financial year is exempted from obtaining registration.(Notification No.65/2017-CT dated 15-11-2017)

Note:In above notification only services are covered if person supplies goods through an ECO is to  mandatorily obtain gst registration

RETURN PROVISIONS:

• E-Commerce operator shall furnish details of outward suppliesof goods or services or both made through it,including the supplies returned through it and the amount collected by it in form GSTR-8 within the days after the end of month in which supplies are made.
• The details of TCS return furnished by ECO u/s 52 in FORM GSTR-8 shall be made available to the supplier in PART D OF FORM GSTR-2A
• sec52(5) of cgst act requires filing of annual statement by ECO on or before 31st december following the year.

NOTE:_Due date for filing of TCS return has been extended for the month of october,November,December is extended up to 31/01/2019

• The amount of tax collected is reflected in electronic cash ledger of supplier since related monthly return is filed by E-commerce operator
• Any mismatch between the data submitted by ECO in his monthly returns and that of suppliers making supplies through him shall cause due mismatchenquiry from proper officer and either party may rectify the erroneous data.

Newly Updated FAQ on TCS:

1)*Whether TCS is required to be collected by e-commerce operators on supply of services by unregistered suppliers through their portal*l?

♦ *As per Section 24(ix) of the CGST Act, 2017, every person supplying goods or services through an e-commerce operator is mandatory required to register. However, vide Notification 65/2017-Central Tax dated 15th November, 2017 a person supplying services, other than supplier of services under section 9 (5) of the CGST Act, 2017, through an e-commerce platform were exempted from obtaining compulsory registration provided their aggregate turnover does not exceed INR 20 lakhs (or INR 10 lakhs in case of specified special category States) in a financial year. Since such suppliers are not liable for registration, e-commerce operators are not required to collect TCS on supply of services being made by such suppliers through their portal*.

2) Whether e-Commerce operator is required to obtain registration in every State/UT in which suppliers listed on their e-commerce platform are located to undertake the necessary compliance as mandated under the law?

♦ *It may be noted that each State/UT has indicated one administrative jurisdiction where all e-commerce operators having business (but not having physical presence) in that State/UT shall register. The proper officer for the purpose of registration of ECOs has also been notified by each State/UT*

3) Certain e-commerce operators who have been unable to obtain registration in the month of October, 2018 but have already collected TCS for the said month have expressed challenges in relation to the filing of such details in GTSR-8. It has been asked  as  to details how  these are  to  be furnished on  the common portal?

♦ *E-commerce operators, who have been unable to obtain registration in the month of October, 2018 but have already collected TCS for the said month, may furnish the details of TCS collected in the month of October, 2018 in the first return in FORM GTSR-8 to be filed after obtaining registration*

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