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Microlesson · 5-min read

Cancellation of Registration [Section 29]

## Cancellation of Registration [Section 29]

Cancellation can be initiated by two routes:

```

Cancellation of Registration

|

┌──────────────┴──────────────┐

Voluntary Cancellation Suo-moto Cancellation with SCN

(By registered person) (By department)

```

### A. Voluntary Cancellation by Registered Person

Application shall be filed within 30 days from occurrence of any of the following events:

1. Discontinuance of business — including transfer, amalgamation, merger, demerger, disposal, or death.

2. Change in constitution of business (e.g., proprietorship → partnership).

3. Business is no longer liable to be registered under Section 22 or 24.

4. Business opts out of voluntary registration.

### B. Suo-moto Cancellation by Proper Officer

P.O. may cancel registration from a date he decides (including a retrospective date) in any of the following cases:

1. Registration obtained by fraud, wilful misstatement, or suppression of facts.

2. Voluntary registration taken but business not commenced within 6 months.

3. Composition supplier has not filed return for 3 months beyond due date.

4. Contravention of provisions, including any of the following:

  • Does not conduct business from declared place
  • Does not furnish bank account details within specified time
  • Issues invoices/bills without actual supply of goods/services
  • Avails ITC in violation of the Act
  • Monthly return filer — fails to file returns for 6 continuous months
  • Quarterly return filer — fails to file for 2 continuous tax periods
  • Violates Rule 86B (maximum 99% of liability through ITC)
  • Outward supplies in GSTR-1/GSTR-1A exceed those in GSTR-3B for one or more periods
  • Violates 3rd/4th proviso of Rule 23(1) — returns not filed within time prescribed after revocation

Worked example

### Example 1

Example 1: Mr. A discontinues his business on 1st April 2025. By when must he apply for cancellation?

Answer: Within 30 days of discontinuance, i.e., by 1st May 2025.

### Example 2

Example 2: M/s PQR opted for voluntary registration on 1st Jan 2025 but has not commenced any business activity till 1st August 2025. Can the P.O. cancel registration?

Answer: Yes. P.O. may cancel suo-moto since voluntary registrant has not commenced business within 6 months from registration.

### Example 3

Example 3: M/s LMN, a monthly return filer, has not filed returns from January to June 2025. Can registration be cancelled?

Answer: Yes. Since 6 continuous monthly returns are pending, P.O. may cancel the registration.

⚠️ Common exam mistakes

  • Forgetting that cancellation by P.O. can be made effective from a retrospective date.
  • Mixing up monthly filer (6 months default) with quarterly filer (2 tax periods default) thresholds for cancellation.
  • Forgetting that issuing invoices without actual supply (fake invoicing) is a ground for cancellation.
  • Not applying the 30-day deadline for voluntary cancellation application.
  • Overlooking Rule 86B violation as a ground for cancellation.
Reference: Section 29 — CGST Act, 2017
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