Consequences of the Cancellation of your GST Registration

I am here to discuss some important knowledge about the consequences of the cancellation of your GST registration. Most of the business house and the individual proprietor has done the GST registration after enforcement of GST Act, 2017.  GST is applicable from 1st July 2017 in India. The purpose of this article is not guide you about how to go through the registration or the procedures to get your GST registration certificate.

At the initial stage of implementation of the GST Act, 2017, many enterprises had done their GST registration on a voluntary basis or transited from the old tax regime to GST during the transitional period. There are a lots of misconception and lack of understanding of GST at the initial stage, viz. getting input tax credit on your all purchase ( without knowing on which type of purchase input tax is actually allowed); or that getting GST registration is mandatory and many others , which were later clarified by Government. Due to this , most of the small business enterprises and individual whether they are providing services or doing any trading activities, they got their registration voluntarily.

After sometime when Taxable person found that GST certificate no more required for conducting their business, it can be due to :

  1. Increasing the threshold limit for Registration
  2. Close down of business
  3. The goods or services  got exempted or out of the scope of GST
  4. And due to other reason taxable person surrenders their GST certificate

Many of the taxable people applied for the GST cancellation application due to the above mentioned reason. Department may issue the Certificate cancellation of GST in prescribe the time and you received your certificate too. Do you think that cancellation procedure is done..?? now, no more filing of return or now onwards no need fallow any compliance related to GST…??

No friends, the GST cancellation procedure does not end with the issue of a cancellation certificate. On one side, I can agree with you that there no requirement of filing the monthly or quarterly return as the case may be but, there is one more step is pending to conclude your GST cancellation process. That is filing of FINAL RETURN in form no. GSTR 10.

A taxable person whose GST registration is canceled or surrendered has to file a return in the form of GSTR-10. This return is called a final return. The GSTR 10 must be filed within three months from the date of cancellation or date of cancellation order, whichever is later. If the GSTR 10 is not filed within the due date, a notice will be sent to such a registered person. The person will be given 15 days’ time for filing the return with all the documents required. Is to be noted that if the person still fails to file the return, the tax officer will pass the final order for the cancellation with the amount of tax payable along with interest/penalty. The penalty may be imposed up to 10,000.

Here please don’t get confused with annual return and final return. Annual return has to be filed by every registered person paying tax as a regular taxpayer under GST. Annual return is to be filed once a year in Form GSTR 9 / 9C as the case may be. Whereas Final return is required to be filed by the persons whose registration has been canceled or surrendered in Form GSTR 10.

Now after as time pass, GST is becoming familiar to people, and a Taxable person able to get a clear understanding of issues related to GST like applicability, return method of filing return, and many more things. Govt with recommendations of GST council had improved and updated the rules and regulation as a convenience to Taxable person.

Now, let’s understand some points related to details of stock which are to be considered while filling up:

  • Where invoices are not present for the declared stock of inputs and inputs contained in semi-finished or finished goods, then the amount must be estimated differently. It will be in compliance with CGST Rule 44(3) at market value. It must be certified by a practicing chartered accountant or cost accountant and uploaded along with GSTR-10.
  • For declaring the value of capital goods or machinery, a formula is prescribed. It shall be invoice value (minus) value of 1/60th per month or part thereof. This is calculated from the invoice or purchase date by taking useful life as five years.

Details to be provided in GSTR-10:


2. Legal Name

3. Business or Trade Name

4. Address for any future correspondence

5. Effective Date of Surrender/Cancellation

6. Reference number of Cancellation order

7. Date of Cancellation Order

8. Particulars of Closing Stock: The taxpayer needs to furnish details of closing stock held at the time business ceases. Any amount of input tax credit lying in such stock needs to be paid along with this return.

8(a) Inputs in stock (invoice present)

8(b) Inputs in the stock of semi-finished or finished goods (invoice present)

8(c) Capital goods or machinery in stock

8(d) Inputs in stock or in stock of semi-finished or finished goods (invoice not present)

9. Tax payable amount and tax paid: Give ITC reversal or tax payable as well as paid, and transfer from electronic cash and credit ledgers as per the heads- CGST, SGST, IGST, and Cess details.

10. Interest, late fee payable and paid

11. Verification: Verify and confirm the correctness of the particulars of the GSTR-10.

Once all the particulars are furnished correctly, after that the taxpayer is required to sign digitally either through a digital signature certificate (DSC) or Aadhaar based signature verification to authenticate the return.

Please feel free to contact us at SGR Consultancy OR you can also follow us on Facebook Page for any more information related to compliance.

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