As against the previous regime of indirect tax collection, implementation of GST brought in an extensive reform for indirect taxation in India.
Paving the way for uniformity, it has substantially helped in shifting the indirect tax payment system from manual to online through the GST portal.
It has thus led to a simplification in GST compliance, unlike the earlier regime where separate manual compliances were required for different indirect taxes.
Here are a few stats that represent an improvement in indirect tax collection after GST implementation
- In the fiscal year 2017-18 singularly, GST collection stood at Rs.7.41 lakh crore since its roll out on 1st July 2019.
- In November 2019, GST collection saw a 6% growth.
- For the same month, the collections also crossed a mark of Rs.1 trillion after a 3-month gap.
While the digitisation has eased compliance among other latest impacts of GST, payment of the same is not mandatory for all.
Thus, businesses that do not fall under the compulsory GST registration requirement but have already registered can opt for cancellation. The GST login portal allows for cancellation of registration in a few simple steps.
Understanding GST cancellation
As explained above, GST cancellation is a process that can be initiated through GST portal login. Once the cancellation is approved, you will no longer be required to collect/pay the tax.
Cancellation of GST also means a simplified business flow due to reduced legal compliance. However, only those businesses that do not require mandatory GST payment must do so.
Cancellation of GST for businesses whose registration is mandatory leads to legal offence and attracts a hefty penalty.
Here are the steps that you can follow for GST cancellation through the Goods and Services Tax portal
- Login to the GST portal with your username and password.
- Next, from the services tab, choose the sub-menu ‘User Services’ and select ‘Cancellation of GST’ option.
- Once the cancellation page opens, confirm your basic details and choose your reason for GST cancellation. You will be able to choose from any one of the following options as your reason for cancellation –
- PAN change as a result of a change in business continuation.
- Business discontinuance/closure.
- Business transfer due to de-merger, amalgamation, lease, sale, etc.
- The demise of the business owner.
- Registered individual’s liability to pay GST ceases to exist.
Other reasons required to be filled include
- The required date for GST cancellation.
- Particulars for the payable tax.
- Proceed to fill the details of tax return last filed. Also, if a tax invoice was issued to you for the month, you will be required to fill in Form GST REG-16. You can find this form on the GST portal.
- Next, you are required to enter other details like authorised signatory, place of business, etc.
- Once the details are filled, proceed to submit the form.
- Opt for DSC submission if the business is a company or an LLP.
- Opt for EVC in the case of a partnership firm or proprietorship.
After you complete the application process for business cancellation, you will receive confirmation within a month.
While cancellation is simple, individuals who are mandatorily required to pay GST must do so in time through the portal.
Timely payment of GST also makes it easy to avail additional finance as business loans for entrepreneurship growth and expansion. Further, financial institutions like Bajaj Finserv bring these advances at attractive rates of interest to make repayment affordable.
As for the cancellation of GST registration, make sure to check that your business’s annual turnover does not exceed Rs.40 lakh in the case of goods, Rs.20 lakh in the case of services, and Rs.10 lakh in special cases before cancellation. Doing so can result in a violation of the GST payment mandate and attract a penalty.