Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 69/43/2018 dated 26th October, 2018 to clarify the processing of applications for cancellation of registration submitted in Form GST REG-16.
The Key points of the Circular are:
- The timelines of 30 days from the date of ‘occurrence of the event warranting the cancellation’ will not apply in cases where it is not possible for the taxpayers to identify the occurrence of such event (i.e. in cases where business is transferred over a period of a time or in piece meal).
- It is further clarified that since the cancellation of registration has no effect on the liability of the taxpayer for any acts of commission/omission committed before or after the date of cancellation, the proper officer should accept all such applications within a period of 30 days from the date of filing the application, except in the following circumstances:-
- The cancellation application is incomplete in any aspect
- In case of merger/amalgamation of business, the transferee company has not obtained registration before such cancellation application is submitted by the transferor company
In all cases other than those listed above, the application for cancellation of registration should be immediately accepted by the proper officer and the order for cancellation should 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.
- The taxpayer seeking cancellation of registration shall have to pay, by way of debiting either the electronic credit or cash ledger, the input tax contained in the stock of inputs, semi-finished goods, finished goods and capital goods or the output tax payable on such goods, whichever is higher. For the purpose of this calculation, the stock of inputs, semi-finished goods, finished goods and capital goods shall be taken as on the day immediately preceding the date with effect from which the cancellation has been ordered by the proper officer i.e. the date of cancellation of registration. However, it is clarified that this requirement to debit the electronic credit and/or cash ledger by suitable amounts should not be a prerequisite for applying for cancellation of registration. This can also be done at the time of submission of final return in FORM GSTR-10.
- The final return in FORM GSTR-10 is not filed within the stipulated date, then notice in FORM GSTR-3A shall be issued to the taxpayer. If the taxpayer still fails to file the final return within 15 days of the receipt of notice in FORM GSTR-3A, then an assessment order in FORM GST ASMT-13 of the CGST Rules shall have to be issued to determine the liability of the taxpayer. If the taxpayer files the final return within 30 days of the date of service of the order in FORM GST ASMT-13, then the said order shall be deemed to have been withdrawn. However, the liability for payment of interest and late fee shall continue.
For further information please refer the attached document.
Source: Central Board of Indirect Taxes & Customs