If your GST registration has been cancelled, or you have received a show cause notice proposing cancellation, the immediate step is to read which ground has been invoked and to reply within the date fixed. Cancellation can be revoked if you apply in the correct form within the period the law provides and clear the defaults that caused it. A dormant or unused registration is cancelled most often simply because returns were not filed, and that is also the easiest cancellation to prevent or undo.
When this matters
This applies to proprietors, partners, directors and anyone holding a GSTIN — whether the business is active, seasonal or dormant. It matters in two common situations: a show cause notice in the prescribed form demanding why registration should not be cancelled, and an order cancelling the registration outright. The first is answered by a reply; the second by an application for revocation. Both have short timelines, and a registration that stays cancelled blocks input tax credit and stops you from issuing a valid tax invoice. See our GST and tax practice, our corporate compliance service and the tax formats library for the drafting involved.
Grounds on which registration is cancelled
Section 29 of the CGST Act 2017 allows cancellation, and the common grounds include:
- Non-filing of returns — the registered person has not furnished returns for a continuous period the rules prescribe, and a best judgement assessment may follow under section 62.
- A business that does not exist or is not verifiable at the declared place of business, often detected during a physical verification.
- Wrong or false particulars in the registration application, or a registration obtained by fraud or misstatement.
- Failure to pay tax, or to pay tax collected but not deposited, or wrong availment of input tax credit.
- Voluntary cancellation applied for by the registered person, and cancellation following death, insolvency or amalgamation of the business.
The rules also provide for suspension of the registration while an enquiry is pending, which stops new invoices and cuts off credit even before a final order.
The show cause notice and the reply
- The notice is issued in the prescribed form requiring you to show cause why registration should not be cancelled, and it states the ground and the date for a response.
- Reply in the form the portal provides for the reply, addressing the ground head-on. If the ground is non-filing, the reply should be accompanied by the returns filed and the tax and interest paid up to date.
- If the ground is a wrong address or a failed verification, attach the rent agreement or ownership proof, a utility bill, photographs and the signboard details, and offer to be present for a fresh verification.
- Keep the acknowledgement of the reply. Where the portal will not accept it, raise a grievance and produce the ticket with the reply.
Applying for revocation
- A revocation application is filed in the prescribed form electronically, within the period the law provides from the date of the cancellation order; the rules allow a further period on payment of the prescribed late fee.
- The application must show that the defaults which led to cancellation have been made good — the pending returns filed and the tax, interest, late fee and penalty paid.
- On being satisfied, the officer revokes the cancellation; the revocation restores the GSTIN and the status quo, but it does not by itself revive an input tax credit that lapsed.
- Where the application is rejected, the order is appealable under section 107 before the Appellate Authority, and thereafter before the Tribunal.
Effect on input tax credit and pending returns
Once a registration is cancelled, the registered person cannot issue a tax invoice or collect tax, and input tax credit lying unutilised in the electronic credit ledger is generally lost — the law allows a credit of inputs held in stock and inputs contained in semi-finished or finished goods only in the limited cases it specifies, on the basis of a prescribed statement. You must also file the final return in the prescribed form following cancellation. Any returns not filed for earlier periods remain due, and for a cancelled registration the department may proceed with a best judgement assessment, which itself is appealable.
Avoiding cancellation of a dormant registration
- If a GSTIN is dormant but you intend to keep it, file the nil returns for every period — a nil return is a return, and non-filing is what triggers cancellation.
- If you do not intend to keep it, apply for voluntary cancellation rather than letting it lapse; a clean cancellation avoids a future notice.
- Keep the address and contact details in the registration updated so that notices and verification officers can reach you.
- If you are winding up or shifting, file the prescribed final return and clear the ledger before the cancellation.
Common questions
Can I get my GST number back after cancellation?
Yes, if you are within the revocation window and the defaults are cleared — the pending returns are filed and the tax, interest and late fee are paid. Outside that window the route is not revocation but an appeal against the order, or a fresh registration.
What happens to customers who took credit on my invoices?
Invoices issued before the cancellation remain valid for the recipients if the tax was paid and the invoices were reported. After cancellation, invoices bearing the cancelled GSTIN cannot be issued, and a recipient who takes credit on them risks a mismatch in their own returns.
Is there a penalty for continuing to bill after cancellation?
Issuing a tax invoice without a valid registration, or collecting tax without authority, attracts penalty and in some situations prosecution under the Act. Stop issuing invoices from the date of cancellation and regularise the status first.
My registration was cancelled without my knowledge. What now?
Check the portal for the show cause notice and the order — notices are uploaded electronically, and a failure to respond is the usual reason for an ex parte cancellation. If the revocation window is still open, apply; if it has closed, the order can be challenged on the footing that notice was not served.
FileX Advocates & Legal Consultants, Kolkata, files revocation applications, replies to GST show cause notices and appeals before the appellate authorities. Call +91 7439811422 or WhatsApp us for a free first consultation.