Businesses who are registered pursuant to GST can only make applications for voluntary withdrawal or cancellation of their registration when meeting particular statutory requirements. The GST authorities have created compliance requirements to help taxpayers clear what they owe before leaving the system.
Return Filing Compliance
A very important requirement is with respect to filing returns. Before April 1, 2026, a taxpayer must have submitted GST returns for at least three months prior to submitting the withdrawal application. On or after April 1, 2026, taxpayers must file returns for at least one tax period before applying. This act is mandatory for businesses to be in compliance with the tax regulations when applying to cancel their registration.
Filing of All Pending Returns
All GST returns need to be filed from the effective date of registration to the date of filing the withdrawal application. There must be no outstanding returns or tax liabilities pending clearance prior to the filing of the application. Failure to comply with the return filing may result in a withdrawal request being rejected.
No Cancellation Proceedings Pending
Withdrawal of GST registration is only allowed if no cancellation proceedings under Section 29 of the GST Act are pending. Where tax authorities have already referred the taxpayer to the cancellation procedure, the taxpayer may need to resolve those proceedings before applying for voluntary withdrawal.
Updated Registration Information
Taxpayers must verify their registration information. If there are any differences between the details of the business and the original submissions made in FORM GST REG-01, that information must be updated or amended prior to lodging the withdrawal application.
Procedure for Application Submission
When all compliance requirements are satisfied, the taxpayer can file a withdrawal application via FORM GST REG-32. After submission, the application will be reviewed by the GST department. The registration will be formally cancelled if all the conditions are met.
The withdrawal of GST registration needs to be done based on proper tax compliance, timely return filing, and accurate registration details. Steps like these help businesses remain transparent and avoid legal issues when exiting the GST system.
