Cancellation of registration clarifies grounds, retrospective effect, and obligation to pay input tax credit equivalents after cancellation. Cancellation of registration may be effected where the business is discontinued, transferred, reconstituted, amalgamated, demerged, or where liability to register ceases, and also for prescribed contraventions, prolonged non-filing of returns, failure to commence after voluntary registration, or fraud in obtaining registration; the proper officer may fix a cancellation date, including retrospectively, after giving an opportunity of being heard. Cancellation does not affect pre-cancellation tax liabilities, and cancelled registrants must pay an amount equivalent to the input tax credit on goods held immediately before cancellation or the output tax payable on such goods, calculated as prescribed, with specified rules for capital goods and plant and machinery.