Circular on SOP for processing of applications for Cancellation of Registration

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CBIC has issued Circular No. 69/2018 on 26.10.2018 to clarify the issues related with cancellation of registration as per section 29 of the CGST Act read with Rule 20. Circular mentioned that the application for cancellation of registration in Form GST REG-16 has to be mandatorily filed by the applicant with the following details –

  1. Address for future correspondence with mobile number and email address;
  2. Reason for cancellation;
  3. Date from which cancellation is sought;
  4. Value and the input tax/tax payable on the stock of inputs, inputs contained in semi-finished goods, inputs contained in finished goods, stock of capital goods/plant and machinery;
  5. In case of transfer, merger of business, etc., particulars of registration of the entity in which the existing unit has been merged, amalgamated, or transferred (including the copy of the order of the High Court / transfer deed);
  6. Details of the last return filed by the taxpayer along with the ARN of such return filed.

It has been made clear that cancellation of registration does not affect the liability of the taxpayer to pay any dues under the GST law, irrespective whether such dues have been determined before or after the date of cancellation.

Proper Officer to accept all applications in Form GST REG-16 within a period of 30 days from the date of filing the application, except where the application is incomplete for the relevant particulars or in case of transfer, merger or amalgamation of business, the new entity in which the applicant proposes to amalgamate or merge has not got registered with the tax authority before submission of the application for cancellation.

It is clarified that issuance of notice in case of failure to furnish returns would not be required for persons who have not made any taxable supplies during the period from date of registration to date of application for cancellation of registration and has furnished an undertaking to this effect.

Circular has also drawn reference to amendment in section 29 introduced by CGST Amendment Act, 2018 by replacing the word ‘Cancellation’ with ‘Suspension’ with the intent to free the taxpayer from routine compliances under GST during the pendency of the cancellation proceedings.

Application for cancellation of registration to be immediately accepted by the proper officer and the order for cancellation to be issued in FORM GST REG-19 with the effective date of cancellation being the same as the date from which the applicant has sought cancellation in FORM GST REG-16.

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