Treatment of Unutilised ITC at the Time of GST Registration Cancellation

[vaibhav agrawal]

At the time of cancellation of GST registration, after discharging the liability as required under Section 29(5) of the CGST Act, a balance of ITC still remain in the electronic credit ledger.

What will be the treatment of such unutilised ITC balance?

Will it lapse automatically upon cancellation, or is there any provision for its utilisation or refund?

Kindly clarify.

AI Summary

Unutilised input tax credit after GST registration cancellation cannot be utilised or refunded and may lapse.
Treatment of unutilised ITC after GST registration cancellation concerns whether the balance remaining in the electronic credit ledger can be utilised or refunded. The discussion states that, after discharging the liability under section 29(5), further utilisation is not possible once registration is cancelled, refund is not available, and the unutilised credit is treated as lapsing. It also refers to reversal of accumulated ITC in GSTR-10, the final return filed after cancellation, and notes conflicting views in cited Sikkim High Court decisions.