Subject: Standard operating procedure for cancellation of GST registration on taxpayer’s request

This circular provides a detailed standard operating procedure for processing applications for cancellation of GST registration filed by taxpayers in Form GST REG-16, with the aim of ensuring uniform and timely disposal of such applications.

It explains the circumstances in which a taxpayer may apply for cancellation, such as discontinuance or transfer of business, change in constitution leading to change in PAN, death of sole proprietor, or where registration is no longer required. Although the law prescribes a 30-day time limit from the occurrence of the relevant event, officers are advised to adopt a liberal approach where the exact date of occurrence is difficult to determine.

The circular outlines the information required to be furnished in Form GST REG-16 and clarifies that, except in cases of incomplete applications or where the transferee entity is not registered, cancellation applications should normally be accepted within 30 days. Where deficiencies exist, the taxpayer must be given an opportunity to rectify them before rejection.

It further clarifies that payment of tax on closing stock or reversal of input tax credit is not a precondition for filing the cancellation application and may be discharged through the final return in Form GSTR-10. Detailed guidance is provided on filing of final return, issuance of notices for non-filing, and assessment in default cases.

The circular also advises field officers not to initiate return-related notices during the pendency of cancellation proceedings and reiterates that cancellation of registration does not absolve the taxpayer from any past or future GST liabilities.