Saturday, 7 January 2017

Section-26. Cancellation of registration

                   Section-26.                                         Cancellation of registration

(1) The proper officer may, either on his own motion or on an application filed, in the
prescribed manner, by the registered taxable 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, -

(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, other than the person registered under sub-section (3) of
section 23, is no longer liable to be registered under Schedule V .

(2) The proper officer may, in the manner as may be prescribed, cancel the
registration of taxable person from such date, including any anterior date, as he
may deem fit, where, -

(a) the registered taxable 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 9 has not furnished returns for three
consecutive tax periods; or

(c) any taxable person, other than a person specified in clause (b), has not
furnished returns for a continuous period of six months; or

(d) any person who has taken voluntary registration under sub-section (3) of
section 23 has not commenced business within six months from the date of
registration.

(3) Where any registration has been obtained by means of fraud, wilful misstatement
or suppression of facts, the proper officer may cancel the registration with
retrospective effect, subject to the provisions of section 37.

(4) The proper officer shall not cancel the registration without giving a notice to show
cause and without giving the person a reasonable opportunity of being heard:

PROVIDED that such notice may not be issued where an application is filed by the
registered taxable person or his legal heirs, in the case of death of such person, for
cancellation of registration.

(5) The cancellation of registration under this section shall not affect the liability of
the taxable person to pay tax and other dues under the Act or to discharge any
obligation under the 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.

(6) The cancellation of registration under the CGST Act/SGST Act shall be deemed to
be a cancellation of registration under the SGST Act/CGST Act.

(7) Every registered taxable person whose registration is cancelled shall pay an
amount, by way of debit in the electronic credit or cash ledger, equivalent to the
credit of input tax in respect of inputs held in stock and inputs contained in semifinished
or finished goods held in stock 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, the taxable person shall pay an amount
equal to the input tax credit taken on the said capital goods reduced by the
percentage points as may be prescribed in this behalf or the tax on the transaction
value of such capital goods under sub-section (1) of section 15, whichever is higher.

(8) The amount payable under sub-section (7) shall be calculated in such manner as
may be prescribed.

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