Effect of Cancellation of GST Registration

By | March 19, 2017
(Last Updated On: March 19, 2017)

What is the effect of Cancellation of GST Registration ?

1. Cancellation of GST Registration in State as well as Center GST Act

The cancellation of registration under the CGST Act/SGST Act shall be deemed to be a cancellation of registration under the SGST Act/CGST Act.

2. Taxable Person Liable to Pay

In case of Inputs :- 

Registered taxable person shall pay an amount, by way of debit in the electronic credit or cash ledger, equivalent to

  • The credit of input tax in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock 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:- 

The taxable person shall pay an amount

  • equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf or
  • The tax on the transaction value of such capital goods under sub-section (1) of section 15,

whichever is higher.

3. Taxable Person Liability to pay tax and Other due prior to the date of cancellation

The cancellation of registration  shall not affect the liability of the taxable person to pay tax and other dues under the Act or to discharge any obligation under the Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

Relevant Extract of Section 26

Extract of Clause 7  and 8 of of Section 26  [ Cancellation of registration ] of Revised Model GST Law 

Every registered taxable person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit or cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock 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:

PROVIDED that in case of capital goods, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf or the tax on the transaction value of such capital goods under sub-section (1) of section 15, whichever is higher.

The amount payable shall be calculated in such manner as may be prescribed.

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