The GST compliance structure introduced in India aimed to streamline the collection of indirect taxes. For many companies that provide services but do not have GST liability because their exported services are classified as zero-rated supplies, however, having to follow GST compliance has created additional work for these companies. After years of not sending in GST returns, some companies wonder if there is any reason to continue complying with GST. The main question many have asked is, "If my services do not have a GST charge and I have been unable to submit returns since 2018, can I avoid continuing my GST registration?" Yes, you can cancel your GST registration and avoid any penalties or notices as long as you follow the correct cancellation procedure outlined in this article on cancelling GST registrations in India. This article provides detailed information on how to apply for cancellation of GST registration in India specifically for service exporters from a practical and professional perspective for the benefit of business owners, freelancers and exporters. You'll discover what you need to apply, how to go step-by-step through the process, the difficulties caused by a lack of returns submitted and how GST registration cancellation services can assist you in your cancellation process.
Understanding GST Applicability on Export of Services
There are reasons exporters do not need to register for GST, and it is essential to understand these before cancelling their GST registration.
The GST act treats exports (services) as a zero-rated supply. A zero-rated supply has the following implications:
-> The invoice will not have any GST included on it.
-> No Output Tax Liability will be payable.
-> Input Tax will be able to be claimed, assuming there is registration.
Most exporters were registered for GST in the early years to claim refunds or because they were required to be registered at that time. However, as time passed many exporters changed their business model, and GST refund processes were complicated. Many small exporters found that complying with the GST requirements exceeded the benefits of doing so.
If an exporter is:
-> Exporting services only.
-> Not supplying SERS to companies in India.
-> Not wanting to claim a GST refund.
It is often unnecessary for them to maintain their GST registration
Why Many Service Exporters Want GST Registration Cancellation
Several factors can help service exporters in deciding to apply for cancellation of their GST registration;
• There will be no output GST liability from zero-rated supplies
• No domestic taxable turnover
• The burden of preparing NIL returns
• Late fees and other notices for non-filing
• Reduced or relocated business activities from Australia
For exporters who have not filed any GST returns since 2018, you must take into consideration the need for strategic handling of this issue rather than ignoring it as there are penalties for non-compliance under GST Law even when you have no tax liability.
What Is GST Registration Cancellation?
Cancellation of GST Registration is the official termination of your GSTIN (Goods and Service Tax Identification Number) from the GST department. Immediately after cancellation of your GST Registration, you:
• Are no longer required to submit GST Returns.
• Are not allowed to charge or collect GST from customers.
• Have your GST Compliance Obligations removed from you.
Cancellation of your GST Registration can be done through:
• The Taxpayer's will (Voluntarily) or
• Cancelled by the GST Department Due to non-compliance.
Given the situation you are in as returns have not been filed since 2018, I recommend you initiate a Voluntary Cancellation of your GST Registration so that penalties do not increase further, and you can rectify any compliance gaps.
Is GST Registration Mandatory for Service Exporters?
GST registration on Exporters is only needed in certain scenarios which include:
1.) If the Exporter wants to receive an Input Tax Credit Refund for the exports made.
2.) If the Exporter is performing Domestic Services that are concurrent with the Exporter's Export of Goods and Services.
3.) If GST registration is required by one of the other items (for instance, e-commerce, specifically notified services, etc.).
However, if:
1.) is only exporting Services
2.) is not charging GST
3.) is not requesting a refund of GST
Then in such situations, GST Registration Cancellation may be the best course of action for the exporter because the cost of maintaining compliance will outweigh any benefit from continuing their registration.
Can You Cancel GST Registration If Returns Are Not Filed Since 2018?
In India, it's possible to apply for cancellation of your GST registration regardless of how long it has been since you last filed a return (or if you’ve never filed a return). However, there are a few things you need to understand:
• The GST portal may not allow you to cancel your registration through the online mechanism if you still have compliance issues
• Late fees and penalties can be assessed on your application when it is submitted
• You may receive notices from the GST Department before your application will be approved
For these reasons, many individuals and businesses consider utilizing the services of a professional service provider for their GST Registration Cancellation process, especially when dealing with noncompliance that may have occurred over many years
Voluntary vs Department-Initiated GST Registration Cancellation
1.Voluntary Cancellation You can apply for cancellation of GST Registration if you: • Have stopped doing business • Don’t need GST Registration anymore • Only provide services outside India and therefore don’t have any GST responsibility. 2.Department Initiated Cancellation
The department can cancel your Registration if:
• You don’t file GST Returns for too many consecutive periods
• You received your GST Registration through fraud or false information.
If the department cancels your Registration, even though it was initiated by them, you must still respond to and complete the Cancellation Process as specified by the GST Registration, in order to avoid further litigation in the future.
Valid Reasons for GST Registration Cancellation
There are many reasons as to why you may cancel your GST registration based on GST law; however, below are the top five reasons of interest for the service exporter:
1. Discontinuation of supply of a taxable nature.
2. Exporting a service to another country, where GST is not applicable.
3. Closure or inactivity in relation to your New Zealand based business.
4. A change within your business structure.
5. Obtaining a GST registration that is not required for your business.
Selecting the appropriate reason for your application will improve the likelihood of an uninterrupted approval process.
Impact of Not Filing GST Returns Since 2018
If you have been unable to file GST returns since 2018, the GST department may already have:
• Sent you notices
• Disabled access to your GST portal
• Suspended your GST Registration Number (GSTIN) or
• Started Suo Moto Cancellation Proceedings against you
Key Risks of Non-Filing:
• Continuing to incur penalties for each GST return, due to being late
• Being assessed interest on the total liability
• Being determined to be ineligible when trying to register with the GST in the future
• Finding it difficult to wind down or meet with compliance requirements for your business
Even if you haven't filed, that doesn't prevent you from seeking to cancel your GST registration. The right GST Registration Cancellation Service, will help you to find a way to move forward with your cancellation process despite any prior instances of missed filing requirements.
When Is GST Registration Cancellation Allowed?
For service exporters, a GST cancellation of registration can take place only if: -
• The individual only sells their services as a service exporter
• The individual pays no GST on their supply to customers
• The individual does not want to claim an input tax credit (ITC) or receive a GST refund on their supplies
• The individual wants to eliminate any additional ongoing compliance burden resulting from having registered.
You have a legal right to apply for cancellation of your registration if you have voluntarily registered and later found out it was not necessary for your business.
GST Registration Cancellation Process – Step-by-Step
The GST Registration Cancellation Process is completely online and handled through the GST portal. Below is a simplified step-by-step explanation:
Step 1: Login to GST Portal
Login using your GSTIN credentials at the official GST portal.
Step 2: Navigate to Cancellation Application
Go to:
Services → Registration → Application for Cancellation of Registration
Step 3: Select Reason for Cancellation
Choose the most appropriate reason, such as:
Step 4: Provide Business Details
You will be required to:
Step 5: File Application with DSC or EVC
Submit the application using:
Step 6: GST Officer Verification
The GST officer may:
Once approved, your GSTIN status will change to Cancelled.
Challenges When Returns Have Not Been Filed
If there has been no filed return since 2018, then cancellation is not an easy task. There are a number of issues associated with long-term non-filing, including:
• Being in a restricted Government Portal due to long term non-filing
• Accumulation of late fees
• Letters from the GST Department
• Nil returns must be filed for earlier periods
In these situations, it is essential to have experts involved.
Impact of GST Registration Cancellation
Once the cancellation of a GST registration has been granted and approved:
This process is a clean exit from GST compliance with the right procedures done.
Important Points to Remember
Common Challenges Faced During GST Registration Cancellation
This is why many exporters opt for a GST Registration Cancellation Service handled by professionals.
Post-Cancellation Compliance Responsibilities
Once GST registration is cancelled:
Cancellation does not erase past liabilities, but it prevents future compliance burden.
Common Mistakes to Avoid During GST Registration Cancellation
Avoiding these mistakes ensures smooth GST Registration Cancellation in India.
What Happens After GST Registration Is Cancelled?
When GST Registration is cancelled:
• The GSTIN will become inactive
• All return filing obligations will cease
• Input tax credit will no longer be allowed to be claimed
• Tax invoices cannot include GST charges
The authorities can, however, still take action against you for any prior non-compliance issues.
Consequences After GST Registration Cancellation
Once your GST registration is cancelled:
• you cannot make any taxable supplies (charge GST)
• you cannot claim any input tax credits
• you no longer have GST compliance obligations
• your PAN-linked registrations are unaffected
Make sure to keep the proper records of all export documentation even after the cancellation occurs.
Conclusion
Exporting services that do not incur GST and Cancelling GST registration can be a legally compliant action as well as a good compliance decision for many tax registrants. It should be noted that when tax returns have not been submitted since 2018, it is vital to design a well-informed plan, provide the appropriate justification to support cancellation of GST Registration, and follow proper procedural practices during the GST Registration Cancellation process. The benefit of properly managing the GST Registration Cancellation process is that it allows the registrant to exit the GST environment without incurring any unnecessary penalties or ongoing compliance risk. If registrants comprehend the legal regulations, address their non-filing problems proactively, and choose the proper GST Registration Cancellation provider, registrants can cancel their GST obligations effectively and finally focus on expanding their businesses without being encumbered by ongoing regulatory issues regarding compliance. The timely and professional registration cancellation will protect the registrant’s credibility, enhance the registrant’s financial viability, and afford the registrant peace of mind going forward.
(FAQs)
1. Can I cancel GST registration if I export services only?
Yes. Export of services is zero-rated, and if you do not have domestic taxable supplies, you can apply for GST Registration Cancellation.
2. Will I have to file old GST returns before cancellation?
In many cases, yes. The GST officer may require filing of pending returns or payment of minimum late fees before approving cancellation.
3. Is GST Registration Cancellation in India fully online?
Yes, the entire GST Registration Cancellation Process is online through the GST portal.
4. What happens if GST registration is cancelled by the department?
Department-initiated cancellation may involve higher scrutiny and penalties. Voluntary cancellation is always recommended.
5. Can I reapply for GST registration in the future?
Yes. Cancellation does not permanently bar you from future registration if business requirements change.
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