Section 29 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 29 of the Central Goods and Services Tax Act, 2017 lets the proper officer cancel a registration, on his own motion or on an application by the registered person or his legal heirs, and lets him suspend it while proceedings are pending. It lists the grounds, requires a hearing before an officer-initiated cancellation under sub-section (2), says that cancellation does not end the liability, and requires a payment on the stock and capital goods held.
This article follows the CGST Act, 2017 as amended up to 31 October 2025 in the compilation consulted; notifications issued after that date should be checked.
The proper officer may cancel a registration on his own motion or on an application, where the business is discontinued, transferred, merged or demerged, there is a change in constitution, or the person is no longer liable (sub-section (1)). He may cancel from any date, including a retrospective date, on the grounds in sub-section (2), but not without a hearing. Cancellation does not affect past liability, and a payment is due on stock and capital goods (sub-sections (3) and (5)).
Where section 29 sits
Section 29 is in Chapter VI, "Registration", after the amendment of registration in section 28 (section 28) and before revocation in section 30 (section 30: revocation and the 2023 change). The rules that carry it out are rules 20 to 22: see rules 20 and 21: application for cancellation and the cases where registration is liable to be cancelled and rule 22: cancellation, notice, reply and order. If a notice proposing cancellation has reached you, our GST cancellation and revocation service can help you reply.
Section 29(1): cancellation on application or on his own motion
"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,-" three grounds follow:
- (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";
- (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". The compilation records clause (c) as substituted by section 121 of the Finance Act, 2020, notified under notification number 92/2020-CT dated 22.12.2020 with effect from 01.01.2021.
The proviso adds 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". Note the limit of this first proviso: it is about proceedings filed by the registered person.
Section 29(2): the officer's grounds, from any date
"The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,-"
| Clause | Ground as printed |
|---|---|
| (a) | A registered person has contravened such provisions of the Act or the rules made under it as may be prescribed |
| (b) | A person paying tax under section 10 has not furnished the return for a financial year beyond three months from the due date of furnishing the said return |
| (c) | Any registered person, other than a person specified in clause (b), has not furnished returns for such continuous tax period as may be prescribed |
| (d) | A person who has taken voluntary registration under section 25(3) has not commenced business within six months from the date of registration |
| (e) | Registration has been obtained by means of fraud, wilful misstatement or suppression of facts |
The compilation records the wording of clauses (b) and (c) as substituted by section 101 of the Finance Act, 2022, notified under notification number 18/2022-CT dated 28.09.2022 with effect from 01.10.2022. Clause (c) leaves the length of the continuous period to the rules; the section prints no number of months. For the grounds in detail see section 29(2): grounds for cancellation by an officer.
Two provisos follow. "Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard." And a further proviso: "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". The suspension power here is general, so it is not limited to proceedings filed by the registered person.
Section 29(3): past liability stays
The cancellation "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." So the dues of the past are open even after cancellation, and may be determined later.
Section 29(4): cancellation under the State or Union territory law
"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) and (6): payment on cancellation
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".
The proviso for capital goods or plant and machinery: the taxable person pays "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". Sub-section (6) says the amount "shall be calculated in such manner as may be prescribed". The percentage points and the manner are in the rules (see section 29(5): what you pay when registration is cancelled); no figure is printed in the section.
Who does what
| Who | What | Provision |
|---|---|---|
| Proper officer | Cancels on his own motion or on application, in the manner and period prescribed | 29(1) |
| Registered person or legal heirs | May apply for cancellation (heirs in case of death) | 29(1) |
| Proper officer | May suspend pending proceedings filed by the registered person | First proviso to 29(1) |
| Proper officer | Cancels from any date, including a retrospective date, on the grounds of 29(2), after a hearing | 29(2) and first proviso |
| Proper officer | May suspend during pending cancellation proceedings | Second proviso to 29(2) |
| Person whose registration is cancelled | Pays the amount on stock and capital goods, by debit of the ledgers | 29(5) |
A worked example
Names and amounts are assumed. Marigold Traders, an invented registered person, has not furnished a return for a financial year beyond three months from its due date, and it is a person paying tax under section 10. The proper officer, after giving it an opportunity of being heard, cancels its registration from a retrospective date under clause (b) of sub-section (2). Under sub-section (3), Marigold Traders remains liable for tax and dues of all periods before the cancellation date. On the day before cancellation it held stock whose input tax credit was 1,20,000 rupees and whose output tax would be 1,50,000 rupees; under sub-section (5) it pays 1,50,000 rupees, the higher figure, by debit of the electronic credit ledger or electronic cash ledger, calculated in the prescribed manner.
Need help with a cancellation notice or application?
A cancellation can be retrospective and carries a payment on stock. We check the ground cited, prepare the reply or application and advise on revocation. See our GST cancellation and revocation service.
Key takeaways
- The proper officer may cancel on his own motion or on an application by the registered person or his legal heirs.
- Sub-section (2) lets him cancel from any date, including a retrospective date, on its listed grounds, and never without a hearing.
- Registration may be suspended while cancellation proceedings are pending.
- Cancellation does not affect liability for any period before the cancellation date.
- A cancelled person pays an amount on stock and capital goods held, by debit in the ledgers.
Read next
- Section 30: revocation of cancellation and the 2023 change
- Rule 22: cancellation, notice, reply and order
- Section 28 of the CGST Act, 2017: amendment of registration
- Section 29(2): grounds for cancellation by an officer
Disclaimer: Based on the Central Goods and Services Tax Rules, 2017 and the GST Acts as amended up to 31 October 2025 in the compilation consulted, read with the Finance Act, 2026 where this article says so, as consulted on 2 October 2026. Notifications, circulars and amendments issued after that date, the forms on the common portal and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.