How to Surrender GST Number

Every business operating under India’s Goods and Services Tax (GST) regime is assigned a unique 15-digit GST Identification Number (GSTIN). This number serves as the legal identifier for tax compliance, invoicing, input tax credit claims, and inter-state transactions. However, there are circumstances when a business may no longer be eligible or required to remain registered under GST—such as cessation of operations, change in business structure, turnover falling below the threshold, or voluntary deregistration. In such cases, the legal obligation is to formally surrender the GST number. Failure to do so may result in compliance penalties, continued tax liabilities, or restrictions on future registrations.

Surrendering a GST number is not a simple cancellation—it is a structured, government-mandated process governed by the Central Goods and Services Tax Act, 2017. It involves clearing all pending tax obligations, filing final returns, and submitting an application through the official GST portal. Understanding the correct procedure ensures a smooth transition, avoids legal complications, and maintains a clean tax record for the business owner.

This guide provides a comprehensive, step-by-step walkthrough of how to surrender a GST number. It covers the prerequisites, procedural steps, common pitfalls, best practices, essential tools, real-world examples, and frequently asked questions—all designed to help business owners, accountants, and compliance professionals navigate the process with confidence and accuracy.

Step-by-Step Guide

Surrendering a GST number is a multi-stage process that must be completed in strict sequence. Skipping or misordering any step can lead to rejection of the application or delays in final approval. Below is the complete, verified procedure to surrender your GST registration.

Step 1: Verify Eligibility for Surrender

Before initiating the surrender process, confirm that your business meets one of the legitimate grounds for deregistration under Rule 21 of the CGST Rules, 2017. Eligible scenarios include:

• Business has been discontinued or ceased operations permanently
• Turnover has consistently remained below the threshold limit (₹40 lakh for goods, ₹20 lakh for services, or ₹10 lakh for special category states) for the past 12 months
• Business has been transferred due to sale, merger, or succession
• Business is no longer liable for GST registration due to change in legal structure (e.g., sole proprietorship to salaried individual)
• Voluntary registration was obtained and the business now wishes to exit the GST regime

It is critical to note that businesses with pending tax liabilities, unfiled returns, or unmatched input tax credit (ITC) cannot proceed with surrender until these are resolved. The system will block the application if any compliance gap exists.

Step 2: File All Pending GST Returns

Before submitting a surrender application, ensure that all GST returns for the period since your last registration are filed. This includes:

• GSTR-1 (Outward Supplies)
• GSTR-3B (Summary Return)
• GSTR-9 (Annual Return, if applicable)
• GSTR-9C (Audit Report, if turnover exceeds ₹2 crore)

Use the GST portal’s “Services > Returns > Dashboard” to check your return filing status. If any return is pending, file it immediately. Even if the return period is zero (no transactions), you must file a nil return. Failure to file even one return will render your surrender application invalid.

For businesses that have not made any sales or purchases in the last few months, filing nil returns is still mandatory. The system does not auto-file returns; each one must be manually submitted.

Step 3: Settle All Outstanding Tax Liabilities

Review your GST liability ledger on the portal under “Services > Ledgers > Electronic Cash Ledger” and “Electronic Credit Ledger.” Ensure:

• All tax dues (CGST, SGST, IGST, Cess) are fully paid
• Any interest or late fees accrued are settled
• Refund claims, if any, are withdrawn or processed

If you have excess ITC that cannot be utilized (e.g., due to nil output tax), you may need to reverse it as per Rule 42 or Rule 43 of the CGST Rules. This reversal must be reflected in your GSTR-3B before proceeding.

Use the “Pay Tax” option on the portal to make payments via net banking, NEFT, RTGS, or through authorized banks. Retain the challan number and payment receipt as proof.

Step 4: Reconcile Input Tax Credit (ITC)

ITC reconciliation is one of the most overlooked yet critical steps. The GST portal automatically matches your GSTR-2B (auto-populated ITC statement) with your GSTR-3B filings. Any mismatch—such as ITC claimed on invoices not uploaded by suppliers or ITC claimed on ineligible goods—must be rectified.

Go to “Services > Returns > ITC Reconciliation” and compare GSTR-2B with your GSTR-3B. If discrepancies exist:

• Reverse the ineligible ITC in your next GSTR-3B
• Request suppliers to rectify their GSTR-1 filings if invoices are missing
• Wait for the next GSTR-2B update after supplier corrections

Do not proceed with surrender until the ITC reconciliation shows zero mismatches or all mismatches are resolved with appropriate adjustments. The system will flag unresolved ITC issues and reject your surrender request.

Step 5: Submit Form GST REG-29 (Application for Surrender)

Once all returns are filed and liabilities cleared, log in to the GST portal using your credentials. Navigate to:

Services > Registration > Application for Cancellation of Registration

Click on “Apply for New” under “Cancellation of Registration.” Select the reason for surrender from the dropdown menu (e.g., “Business discontinued,” “Turnover below threshold,” etc.).

Fill in the following details accurately:

• Effective date of cancellation (must be on or after the last return filing date)
• Reason for cancellation (choose the most accurate option)
• Details of closing stock (if applicable)
• Declaration that all tax liabilities are settled
• Declaration that all ITC has been properly reversed or utilized

Upload supporting documents if required (e.g., board resolution for company dissolution, sale deed for business transfer, or proof of cessation of operations).

Sign the form using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). If you are a registered taxpayer with DSC, use it for authentication. For small businesses without DSC, EVC via OTP on registered mobile/email is acceptable.

Submit the form. Upon successful submission, you will receive an Application Reference Number (ARN). Keep this number safe—it will be required for tracking your application status.

Step 6: Await Approval and Respond to Notices

After submission, your application is routed to the jurisdictional GST officer for verification. The processing time typically ranges from 7 to 30 working days, depending on workload and completeness of documentation.

During this period, you may receive a notice via email or SMS requesting additional information. Common requests include:

• Clarification on the reason for surrender
• Proof of closure of bank accounts linked to the business
• Confirmation that no pending litigation exists
• Verification of final stock valuation

Respond promptly using the “View Application Status” feature under “Services > Registration > Application for Cancellation.” Upload any requested documents and submit your reply within the stipulated deadline (usually 7 days). Failure to respond may lead to rejection.

Step 7: Receive Final Order and Confirmation

If your application is approved, you will receive an order in Form GST REG-19 via email and SMS. This order confirms the cancellation of your GST registration and specifies the effective date of cancellation.

Once the order is issued:

• Your GSTIN will be marked as “Cancelled” on the GST portal
• You will no longer be required to file GST returns
• Your name will be removed from the public GST taxpayer directory
• Any linked e-way bill or e-invoice credentials will be deactivated

Download and retain a copy of Form GST REG-19 for your records. It serves as legal proof of deregistration and may be required for future audits, loan applications, or new business registrations.

Step 8: Update Business Records and Inform Stakeholders

After successful surrender, take the following internal and external actions:

• Update your accounting software to reflect the cancellation
• Remove your GSTIN from invoices, website, and official correspondence
• Notify your suppliers, customers, and banks of the cancellation
• Close any GST-linked bank accounts or digital payment gateways
• Archive all GST-related documents for at least 6 years, as mandated by law

Even after cancellation, you remain liable for any post-cancellation audit or scrutiny for up to five years from the date of cancellation. Maintain organized records to handle any future queries.

Best Practices

Successfully surrendering a GST number requires more than just following steps—it demands strategic planning and disciplined compliance. Below are best practices to ensure a seamless, error-free process.

Plan Ahead, Don’t Wait Until the Last Minute

Many businesses delay surrender until they are already non-operational, leading to missed deadlines and accumulated penalties. Begin the process at least 30–45 days before you intend to cease operations. This allows time to file pending returns, resolve ITC mismatches, and respond to officer queries without rush.

Conduct a Pre-Surrender Compliance Audit

Before submitting Form GST REG-29, perform a full compliance audit. Use the GST portal’s “Compliance Rating” feature to assess your current status. Address any low scores in return filing, payment, or ITC reconciliation. A rating above 80% significantly improves approval chances.

Use a Single Point of Contact for All Communications

Assign one person—typically the proprietor, partner, or authorized signatory—to handle all correspondence with the GST department. Avoid multiple users submitting conflicting replies or documents. Consistency in communication prevents confusion and delays.

Never Surrender Without Settling ITC

Unsettled ITC is the most common reason for rejection. Even if you believe the credit is “unused,” you must reverse it if it relates to exempt supplies, personal use, or non-business assets. Consult a tax professional if unsure about ITC eligibility.

Keep Digital and Physical Records

Store electronic copies of all filings, payment receipts, ARN numbers, and final orders in a secure cloud folder. Simultaneously, print and file hard copies in a dedicated compliance binder. This dual backup ensures you can produce evidence during audits or disputes.

Do Not Re-Register Immediately After Surrender

If you plan to restart the business under the same name or structure, wait at least six months after surrender before reapplying. Frequent cancellations and re-registrations may trigger scrutiny from tax authorities, leading to delays or denial of future registration.

Monitor Email and SMS Regularly

Official notices are sent via registered email and SMS. Ensure your registered contact details are current. If you change your mobile number or email during the process, update them immediately via “Services > Registration > Amendment of Registration.”

Seek Professional Help When Needed

For complex cases—such as business transfers, mergers, or disputes over ITC—consult a GST practitioner or chartered accountant. Their expertise can prevent costly errors and expedite approval.

Tools and Resources

Leveraging the right tools and official resources can simplify the surrender process and reduce the risk of errors. Below is a curated list of essential tools and resources available to taxpayers.

Official GST Portal (https://www.gst.gov.in)

The primary platform for all GST-related activities. Use it to:

• File returns (GSTR-1, GSTR-3B, GSTR-9)
• Check ITC reconciliation
• Pay dues
• Submit Form GST REG-29
• Track application status
• Download Form GST REG-19

Always use the official portal. Avoid third-party sites claiming to “speed up” surrender—they may be fraudulent or collect your credentials.

GSTN Mobile App

The GSTN app (available on Android and iOS) allows you to:

• Receive instant alerts for notices and due dates
• Access your ARN and application status on the go
• Verify supplier GSTINs
• View your electronic ledgers

Enable notifications to stay updated without relying on email.

ITC Reconciliation Tools

Third-party tools like ClearTax, Zoho Books, TallyPrime, and Khatabook offer automated ITC reconciliation features. These tools compare GSTR-2B with your books and highlight mismatches. While not mandatory, they save hours of manual checking and reduce errors.

Electronic Cash and Credit Ledgers

Access these under “Services > Ledgers” on the GST portal. Use them to:

• Track cash balance for tax payments
• Verify available ITC for utilization
• Confirm that all liabilities are zero before surrender

Do not assume your books match the portal. Always reconcile with official ledgers.

GST Suvidha Providers (GSPs)

Authorized GSPs like neofin, Taxmann, and others offer end-to-end GST compliance services. They can help file returns, reconcile ITC, and submit surrender applications on your behalf. Choose only those registered with GSTN.

Official Circulars and Notifications

Refer to the following documents for legal clarity:

• CGST Act, 2017 – Section 29 (Cancellation of Registration)
• Rule 21 of CGST Rules – Conditions for Surrender
• Notification No. 14/2020-Central Tax dated 21.03.2020 – Clarifications on Surrender
• CBIC Circular No. 132/01/2020-GST – Procedure for Cancellation

All documents are available on the CBIC website (https://www.cbic.gov.in).

Sample Templates and Checklists

Download free surrender checklists from state tax department websites or professional bodies like ICAI and ICSI. These templates list every document and step required, helping you avoid omissions.

Real Examples

Real-world examples illustrate how businesses successfully navigate the surrender process—and where others falter.

Example 1: Small Retail Shop Closing Due to Low Turnover

Mr. Arun runs a small stationary shop in Jaipur with annual turnover of ₹18 lakh. He registered voluntarily under GST in 2020 to claim ITC on bulk purchases. In 2023, he decides to close the shop due to declining sales.

He:

• Filed all GSTR-1 and GSTR-3B returns for FY 2022–23
• Settled a ₹1,200 tax liability from March 2023
• Reversed ₹4,500 of ITC claimed on personal-use furniture
• Submitted Form GST REG-29 on April 15, 2023, with effective date of April 30, 2023
• Received Form GST REG-19 on May 12, 2023

His surrender was approved in 27 days. He archived all records and informed his suppliers of the cancellation.

Example 2: E-Commerce Seller Failing to Reconcile ITC

Smt. Priya runs an online apparel store. She filed all returns but ignored ITC mismatches. Her GSTR-2B showed ₹87,000 in unconfirmed ITC due to suppliers not filing GSTR-1.

She submitted Form GST REG-29 without resolving the mismatches. Her application was rejected with the reason: “Unresolved ITC discrepancies.”

She had to:

• Follow up with 17 suppliers to file their GSTR-1
• Wait for two GSTR-2B updates
• Reverse the ITC in GSTR-3B for July 2023
• Resubmit Form GST REG-29 on August 5, 2023

Her second application was approved in 18 days. The delay cost her two months of inactivity and potential customer trust.

Example 3: Partnership Firm Dissolution

A partnership firm of three partners dissolved due to internal disputes. They:

• Obtained a notarized dissolution deed
• Filed GSTR-1 and GSTR-3B for the final month
• Transferred all assets and liabilities to one partner
• Submitted Form GST REG-29 with the dissolution deed as proof
• Received cancellation within 14 days

Their documentation was complete, and the officer accepted the reason without requiring further clarification.

Example 4: Business Reopened After Improper Surrender

A tech startup surrendered its GSTIN in 2022 after pausing operations. Six months later, it restarted under the same name and PAN. When they applied for a new GST registration, the system flagged their previous surrender and demanded a justification.

They were required to submit a detailed explanation and prove that the new entity was legally distinct. Their registration was delayed by 45 days.

Lesson: Always wait a significant period before re-registering under the same identity.

FAQs

Can I surrender my GST number if I have pending refunds?

No. You must withdraw any pending refund applications before submitting Form GST REG-29. The system blocks surrender if refund claims are active. Once the surrender is approved, you can reapply for refunds under a new registration if eligible.

What happens if I don’t surrender my GST number after closing my business?

If you continue to remain registered without filing returns, you will be flagged for non-compliance. Penalties of ₹100 per day (up to ₹5,000) may be imposed under Section 47. Your name may also be listed in the defaulters’ list, affecting future credit eligibility and business credibility.

Can I surrender GSTIN if I have unfiled GSTR-9 or GSTR-9C?

No. Annual returns (GSTR-9) and audit reports (GSTR-9C) are mandatory for eligible taxpayers. You must file them before surrendering. If you missed the deadline, file them late and pay the late fee before proceeding.

Is there a fee to surrender GST registration?

No. There is no application fee for surrendering GST registration. However, you must clear all outstanding tax, interest, and late fees before submission.

How long does it take to surrender GST number?

Typically 7 to 30 working days. Processing time depends on the completeness of your application, response speed to notices, and workload of the jurisdictional officer.

Can I surrender GSTIN for one state if I have multiple registrations?

Yes. If you have multiple GST registrations across states (e.g., due to multiple business locations), you can surrender one state’s registration while keeping others active. Submit Form GST REG-29 for the specific GSTIN you wish to cancel.

Will my GSTIN be reused after surrender?

No. GSTINs are unique and permanently retired upon cancellation. Even if you re-register later, you will be assigned a new GSTIN.

Do I need to inform my customers and suppliers about the surrender?

Yes. While not legally mandatory, it is a professional best practice. Inform them to avoid confusion in invoicing, payments, and audit trails. Update your website, email signatures, and payment gateways.

Can I surrender GSTIN if I’m under audit?

Generally, no. If your business is under audit or investigation, the GST officer may reject your surrender application until the audit is concluded. You must cooperate fully with the audit process before proceeding.

What if I made a mistake in the reason for surrender?

If your application is rejected due to incorrect reason selection, you can reapply with the correct reason. There is no penalty for reapplying, but ensure the new reason is accurate and supported by documentation.

Conclusion

Surrendering a GST number is a critical compliance step that must be handled with precision and care. It is not merely an administrative formality—it is a legal obligation that protects your business from future liabilities, penalties, and reputational damage. The process, while detailed, is straightforward if approached systematically: file all pending returns, settle all dues, reconcile ITC, submit Form GST REG-29 accurately, and respond promptly to official communications.

By following the best practices outlined in this guide—planning ahead, maintaining documentation, using official tools, and seeking expert help when needed—you can ensure a smooth and successful surrender. Real-world examples demonstrate that success hinges on diligence, not speed. One overlooked mismatch or unfiled return can delay your closure by weeks.

Remember, your GSTIN is not just a number—it is a record of your compliance journey. Closing it properly reflects professionalism and integrity. Once surrendered, retain all records for at least six years. Even after deregistration, your tax history remains part of your business legacy.

Whether you are a sole proprietor winding down a small venture or a company dissolving after a merger, the principles remain the same: complete, accurate, and timely compliance. Use this guide as your roadmap, and approach the surrender process with confidence. Your future self—and your business reputation—will thank you.