Section 29 of CGST Act

Cancellation [or Suspension] of Registration

 

Section 29(1)

 

The proper officer may,

either on his own motion or on an application filed by the registered person or by his legal heirs,

in case of death of such person,

cancel the registration,

in such manner and within such period as may be prescribed,

having regard to the circumstances where, -

 

{See rule 21A of the CGST Rules, 2017}.

 

(a) the business has been discontinued,
transferred fully for any reason including death of the proprietor, amalgamated with other legal entity,
demerged or otherwise disposed of; or

 

(b) there is any change in the constitution of the business; or

 

(c) the taxable person is

no longer liable to be registered under section 22 or section 24 or

intends to optout of the registration

voluntarily made under sub-section (3) of section 25:

 

{Substituted by the Finance Act, 2020, w.e.f. 1-1-2021. Prior to its substitution, clause (c) read as under:

"(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24:"}

 

Provided that during pendency of the proceedings

relating to cancellation of registration filed by the registered person,
the registration may be suspended for such period and in such manner as may be prescribed.

 

{Inserted by the Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019}.

 

 

Section29(2)

 

  The proper officer may

cancel the registration of a person from such date,
including any retrospective date,
as he may deem fit, where,–
 

(a) a registered person has contravened

such provisions of the Act

or the rules made thereunder as may be prescribed; or

 

(b) a person paying tax under section 10 has

not furnished “returns for three consecutive tax periods” the return for a FY beyond 3 months from the due date of furnishing the said return; or

 

{Substituted for “returns for three consecutive tax periods” by the Finance Act, 2022, w.e.f. 1-10-2022}

 

(c) any registered person, other than a person specified in clause (b),
has not furnished returns for “a continuous period of six months” such continuous tax period as may be prescribed; or

 

{Substituted for “a continuous period of six months” by the Finance Act, 2022, w.e.f. 1-10-2022}

 

(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

 

(e) registration has been obtained by means of fraud,
wilful misstatement or suppression of facts:

 

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard:

 

Provided further that during pendency of the proceedings relating to cancellation of registration,
the proper officer may suspend the registration for such period and in such manner as may be prescribed.

 

{Inserted by the Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019.}

 

 

Section 29(3)

 

The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

 

Section 29 (4)

 

The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act,
as the case may be, shall be deemed to be a cancellation of registration under this Act.

 

Section 29 (5)

 

Every registered person whose registration is cancelled shall pay an amount,
by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods,
whichever is higher,
calculated in such manner as may be prescribed:

 

Provided that in case of capital goods or plant and machinery,

the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery,

reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher.

 

Section 29 (6)

 

The amount payable under sub-section (5) shall be calculated in such manner as may be prescribed.

 

 

 

• See also Central Goods and Services Tax (Removal of Difficulties) Order, 2020.

 

• Inserted by the Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019.

 

• See rules 20, 21, 21A, 22, 44 and 81 and Form Nos. REG-16 to REG-20, REG-31, ITC-03 and GSTR-10 of the CGST Rules, 2017.

 

• Section 29 enforced with effect from 22-6-2017.

 

• For extension of time-limit for making an application for revocation of cancellation of registration, see Notification No. 34/2021-Central Tax, dated 29-8-2021.