Whether GST registration to be retained for an owned premises where the business is inoperative?

[Balaji Srinivasamurthy]

Dear experts,

I humbly request you to share an insight where a company owns a property and unfortunately closed down its operations, whether they need to surrender the GST registration or retain the registration based on its ownership? Sale of property is uncertain and so is GST payable on disposal.

[Sadanand Bulbule]

Under Section 29(1)(c) of the CGST Act, 2017, a registered person can apply for cancellation of GST registration if the business has been discontinued. There is no mandate  to retain registration solely because the premises is owned.

Further, sale of immovable property like land/building is outside the GST regime. No GST is payable on its sale in terms of Entry No 5 of Third Schedule to the Act.

[Shilpi Jain]

Sale of land and completed building is not liable to GST.

So finish off all compliances under GST law and surrender the registration if there are no other taxable supplies.

AI Summary

Company must cancel GST registration if business is discontinued; sale of immovable property is GST-exempt under CGST Act. A company that owns property but has ceased business operations is not required to retain GST registration solely based on property ownership. Under the CGST Act, registration must be canceled if the business is discontinued. Additionally, the sale of immovable property such as land or completed buildings is exempt from GST, so no GST is payable on such sales. Therefore, if there are no other taxable supplies, the company should complete all GST compliances and surrender its registration.