GST cancellation application

This query is : Resolved

karishma mittal (Querist)
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20 July 2020 I have filed GST cancellation application form 16 in June.
I have already filed all returns till June and no GST liability is due. All the tax is paid in March.
No business transaction occurs in April, may and june.
I have received some clarification notice from department on my cancellation application.
Below is the query:
Tax Details: Others (Please specify) - ADMISSIBLE TAX ON PROFIT WILL NOT
DEPOSIT IN CASH SET OFF
Can anyone please tell me what does it mean and what to reply on this.
All the business stock is nil and no tax liability at the time of applying cancellation application.
Reason of cancellation was closure of business.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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21 July 2020 Get in touch with jurisdictional assessing officer, drop them a mail or contact them on phone/

karishma mittal

karishma mittal (Querist)
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21 July 2020 Are you asking to check with AO to clarify what he is demanding?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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26 July 2024 The query from the GST department regarding the cancellation application—"ADMISSIBLE TAX ON PROFIT WILL NOT DEPOSIT IN CASH SET OFF"—can be somewhat ambiguous but typically relates to the department's need to ensure that all tax liabilities are properly settled before finalizing the cancellation of your GST registration.

Here's a breakdown of the query and how you might respond:

### **Understanding the Query**

**1. Admissible Tax on Profit:**
- This typically refers to any tax credits or adjustments that might be due based on your taxable transactions or profits. Even though your business has ceased, the department wants to ensure that all credits and liabilities are accurately accounted for.

**2. Will Not Deposit in Cash Set Off:**
- This suggests that the department is checking if there is any admissible tax credit or tax that should have been used to set off against any GST liabilities. They want to confirm that no tax credits or refunds are left that should be adjusted or set off before canceling the registration.

### **Steps to Respond**

**1. Confirm No Pending Tax Liabilities:**
- **Confirm Payment**: Reiterate that all taxes have been paid up to the date of cancellation, and no tax liability is pending.
- **Document Proof**: Attach proof of tax payments and return filings showing that all dues were settled.

**2. Provide Details on Business Closure:**
- **Closure of Business**: Clearly state that the reason for cancellation is due to the closure of the business. Provide any supporting documentation, such as cessation of operations or closure documents, to support your claim.

**3. Address Stock and Assets:**
- **Nil Stock**: Confirm that there is no business stock or inventory left as of the cancellation application date. Provide a declaration or proof if required.

**4. Respond to the Query:**
- **Detailed Explanation**: Provide a detailed explanation in your response about why there are no pending tax liabilities and confirm that all GST returns have been filed and taxes have been paid.
- **Attach Relevant Documents**: Include copies of all relevant documents, such as:
- Proof of tax payments
- Final GST returns
- Any declarations regarding the closure of business
- Any records showing nil stock

### **Sample Response**

Here is a sample response you might consider sending to the GST department:

---

**Subject: Response to Clarification Notice on GST Cancellation Application**

Dear [GST Officer's Name],

I am writing in response to the clarification notice dated [date] concerning my GST cancellation application (Application Reference No: [reference number]).

**1. Tax Liability and Payment:**
- All GST liabilities have been fully paid as of March [year], and no pending tax liabilities exist as of the cancellation application date.
- Attached are copies of the tax payment receipts and the final GST returns filed up to June [year], confirming that all dues have been cleared.

**2. Closure of Business:**
- The reason for applying for GST cancellation is the complete closure of my business. No transactions occurred in April, May, and June [year].
- Enclosed are supporting documents related to the closure of business operations.

**3. Business Stock:**
- I confirm that all business stock has been cleared, and no stock is left as of the date of applying for cancellation.

**4. Additional Details:**
- There are no admissible tax credits or refunds pending that need to be adjusted or set off against any liabilities.

Please let me know if any additional information or documentation is required to process the cancellation application.

Thank you for your assistance.

Sincerely,
[Your Name]
[Your GSTIN]
[Your Contact Information]

---

### **Additional Tips**

- **Review Documents**: Ensure that all documents are accurate and complete before submission.
- **Follow Up**: Monitor the status of your application and be prepared to provide further information if requested by the GST authorities.

By addressing the department's query with clear and accurate information, you help facilitate the smooth processing of your GST registration cancellation. If needed, consulting with a GST professional or tax advisor can provide additional guidance tailored to your specific situation.