Cancellation/Surrender of registration under GST
IN the following cases, the registration can be either surrendered by the registrant or cancelled by the tax authorities:
(1) Closure of business of tax payer;
(2) Gross Annual Turnover including exports and exempted supplies (to be calculated on all-India basis) falling below threshold for registration;
(3) Transfer of business for any reason including due to death of the proprietor of a proprietorship firm;
(4) Amalgamation of taxable person with other legal entities or de-merger;
(5) Non commencement of business by the tax payer within the stipulated time period prescribed under the laws.
In case of surrender, the system will send an acknowledgment by SMS and e-Mail to the applicant regarding his surrender of registration and he will be deemed to be unregistered from the date of such acknowledgement. There will be a provision in the system to prompt such surrendered registrants to update their address and mobile number at a prescribed periodicity till all dues are cleared/refunds made.
The cancellation of registration may be done by tax authorities in the following situations:
(1) In case signed copy of the summary extract of submitted application form is not received even after a reminder;
(2) In case a tax payer contravenes specified provision of the law;
(3) In case a taxpayer has not filed any return at all during a predetermined period (say six months). In case a taxpayer has filed a nil return continuously for this period, then the provisions of cancellation will not be applicable.
(4) The cancellation of registration may be preceded by system generated notice giving 7 days time for furnishing reply by the taxpayer. Principle of natural justice to be followed before cancellation, i.e., giving an opportunity to taxpayer to be heard and passing of order.
If the taxpayer approaches the tax authority for revocation of surrendered or cancelled registration, the surrendered / cancelled registration can be revoked. The action for revocation would be initiated by that Authority which has cancelled the registration or had earlier accepted the surrender of registration.
The Law would contain appropriate provisions relating to revocation / surrender / cancellation of registration.
The action for revocation / cancellation of registration would have to be initiated by both Centre and State tax authorities. Once the registration is cancelled by one authority it would be deemed to be cancelled by other authority also.
The cancellation or surrender of registration would always have prospective effect.
These are the proposals in the Reports of the Joint Committee On Business Processes For GST. The Government has released the reports pertaining to payment process, Refund and Registration.
The legacy of the existing Central Excise Laws and procedure are proposed to be planted in GST. Concepts like pre-audit of refund claims, interest of only 6% interest for delayed refunds will all find a place in the new GST regime when (if) it comes.