How to Cancel or Surrender GST Registration in India

Kaustav Chowdhury
Jun 26
4 min read

Updated: Jul 5

GST registration cancellation, also called surrender of GST registration, is the process by which a registered taxpayer voluntarily deregisters from the Goods and Services Tax system. This guide covers the eligibility criteria, step-by-step online procedure on the GST portal, required documents, final return obligations, and key timelines under the Central Goods and Services Tax (CGST) Act, 2017 and the CGST Rules, 2017.

When Can You Cancel GST Registration

Under Section 29(1) of the CGST Act, 2017, a registered person may apply for cancellation of registration if the business has been discontinued, transferred, amalgamated, or demerged; if there is a change in the constitution of the business (such as a partnership firm converting to a company); if the taxable person is no longer liable to be registered under the Act (for example, if turnover falls below the threshold limit of Rs 40 lakh for goods or Rs 20 lakh for services, or Rs 20 lakh and Rs 10 lakh respectively for special category states); or if a person registered voluntarily under Section 25(3) wishes to withdraw the registration. Note that the one-year lock-in period for voluntary GST registration cancellation was removed effective January 2018 through an amendment to Rule 19 of the CGST Rules. Voluntary registrants can now apply for cancellation at any time by filing Form GST REG-16.

Step 1: File All Pending GST Returns

Before applying for cancellation, the taxpayer must ensure that all pending GST returns (GSTR-1, GSTR-3B, and annual returns GSTR-9 where applicable) are filed up to the date of application. The GST portal will not allow filing of the cancellation application if returns are outstanding. This is a mandatory prerequisite and is one of the most common reasons for rejection of cancellation applications. (Related: How to Register for GST in India)

Step 2: Log In to the GST Portal and Access Cancellation Form

Log in to the GST portal (gst.gov.in) using your GSTIN and password. Navigate to Services, then Registration, then Application for Cancellation of Registration. This opens Form GST REG-16, which is the prescribed form for voluntary cancellation. The form has several sections that must be completed with details about the business, the reason for cancellation, and the stock position as on the date of cancellation.

Step 3: Fill Form GST REG-16

In Form GST REG-16, provide the following information: the reason for cancellation (select from dropdown options such as discontinuation of business, transfer of business, turnover below threshold, or other reasons); the desired date of cancellation; details of closing stock of inputs, semi-finished goods, finished goods, and capital goods held on the date of cancellation, along with the amount of tax payable on such closing stock; and the particulars of the last return filed. The tax payable on closing stock is calculated as the input tax credit (ITC) attributable to the stock or the tax on the transaction value of the stock, whichever is higher, as per Section 29(5) read with Rule 44 of the CGST Rules.

Step 4: Upload Documents and Submit

Upload any supporting documents required, such as a board resolution (for companies), partnership deed amendments (for firms), or sale deed (for transfer of business). Verify the application using Digital Signature Certificate (DSC) for companies and LLPs, or Electronic Verification Code (EVC) for others. Once verified, submit the application. The portal generates an Application Reference Number (ARN) for tracking.

Step 5: Processing by the Tax Officer

The jurisdictional tax officer reviews the application within 30 days of submission. The officer may approve the application, reject it (with reasons communicated in Form GST REG-19), or issue a show cause notice in Form GST REG-17 if there are concerns. If a show cause notice is issued, the applicant must respond within 7 working days in Form GST REG-18. After considering the response, the officer either approves or rejects the application. If the officer does not act within 30 days, the application is deemed approved on the date of completion of the 30-day period.

Step 6: File Final Return in GSTR-10

After the cancellation order is issued in Form GST REG-19, the taxpayer must file a final return in Form GSTR-10 within three months from the date of cancellation or the date of the cancellation order, whichever is later. GSTR-10 requires details of closing stock, tax payable on closing stock, and any refund claimed. Failure to file GSTR-10 attracts a late fee of Rs 200 per day (Rs 100 CGST + Rs 100 SGST), subject to a maximum of Rs 10,000. (Related: How to Respond to a GST Show Cause Notice in India)

Revocation of Cancellation

If a GST registration is cancelled by the tax officer (not voluntarily), the taxpayer may apply for revocation of cancellation under Section 30 of the CGST Act within 90 days of the cancellation order by filing Form GST REG-21. The 90-day period may be extended by the Additional Commissioner or Joint Commissioner by a further 90 days, and by the Commissioner by a further 90 days beyond that, for a total maximum period of 270 days. All pending returns must be filed along with payment of due taxes, interest, and late fees before applying for revocation. (See: How to Claim GST Input Tax Credit)

Key Points to Remember

Tax payable on closing stock must be paid at the time of filing the cancellation application. ITC already claimed on inputs, semi-finished goods, finished goods, and capital goods must be reversed as per the formula in Rule 44 of the CGST Rules. The effective date of cancellation is the date specified by the tax officer in the cancellation order, which may be the date of application or an earlier date depending on the facts. After cancellation, the GSTIN becomes inactive and the taxpayer cannot collect GST or issue tax invoices. Any transactions conducted after the effective date of cancellation are treated as supplies by an unregistered person and may attract penalties under Section 122 of the CGST Act. (See also: GST on Real Estate in India)