When a sole proprietor dies, the legal heirs can apply for the GST registration to be cancelled in Form GST REG-16, with the reason "death of the proprietor" and the death certificate. We settle the returns and dues up to that date, work out the payment on stock and credit, file the application and the final return GSTR-10, and plan the credit move to the heir who carries on the business.
Section 29(1) of the CGST Act lets the proper officer cancel a registration on an application filed by the registered person or, in case of death, by his legal heirs. One of the grounds listed is that the business has been "transferred fully for any reason including death of the proprietor". Rule 22(5) adds that the officer processes the heirs' application as if the proprietor himself had submitted it.
An heir carries on the business / The business is closed / Something is open
The 30-day limit is reported to be lifted on the death of a proprietor. We have not found that in the Act, the Rules or the Circular, so we advise filing within 30 days.
Returns up to the date: Cancellation does not cancel earlier obligations (section 29(3)). Returns due for the periods up to the date from which cancellation is sought are filed first. After the application, regular returns are not required while the registration is suspended (Rule 21A(3)), but the final return is.
If the business closes: The registration being cancelled, you pay the higher of the input tax credit on the stock and capital goods held, or the tax on them, by debit of the credit or cash ledger. Stock is taken as on the day before the cancellation date (section 29(5); Circular 69/43/2018-GST, para 8).
A marker to plan the filing, not a reason to wait.
Documents are collected after payment, through the application.
The application is incomplete: the portal needs the reason, the date, the stock position and the last return with its acknowledgement number (Circular 69/43/2018-GST, para 4)
Route check: We confirm that the heir's cancellation, not revocation or a notice reply, is what you need.
Item, Amount, Note
The legal heirs. Section 29(1) allows an application by the legal heirs in case of death, and Rule 22(5) says the officer treats it as if the proprietor himself had applied. Who the legal heirs are depends on the law of succession that applies to the family; we do not decide that and take the heir proof you hold.
The Act makes the successor of a business liable to be registered from the date of succession (section 22(3)), and the old registration is cancelled on the heir's application. So the heir who carries on registers afresh. We confirm the order of the steps on the portal with you for your case.
Rule 20 says within 30 days of the event. Circular 69/43/2018-GST asks officers to read the limit liberally where the event date is hard to fix and not to reject only for delay. Some sources say the limit does not apply on a death; we have not found that in the Act, Rules or Circular, so file within 30 days.
Yes. Cancellation does not affect liability or obligations for any earlier period (section 29(3)). We file the returns due for the periods up to the date from which cancellation is sought, with tax, interest and late fee, before the application.
Section 93(1): if the business is continued after the death, the legal representative or other person continuing it is liable for the tax, interest and penalty due from the deceased. If the business is discontinued, the legal representative is liable only out of the estate, to the extent the estate can meet it. This applies whether the amount was fixed before or after the death.
If an heir continues the business, the credit in the electronic credit ledger can be moved on Form GST ITC-02 under Rule 41, which covers a change in ownership for any reason. It is planned before the cancellation is filed, because after applying the ledger balances can be used only to pay GST liabilities. If the business closes, the stock and capital goods are dealt with under section 29(5).
A regular taxpayer files GSTR-10 within 3 months of the cancellation date or the order date, whichever is later (section 45, Rule 81). Composition taxpayers, input service distributors, non-resident taxable persons and tax deductors or collectors file none. If it is missed, a notice in Form GSTR-3A follows.
The heir proof and the written no-objection of the other heirs, so that one heir can sign the application. The proof you hold, such as a succession or legal heirship certificate, is taken as it is; we tell you if the officer is likely to ask for more.
Do not ignore it. The reply date is the one printed on the notice, and a show-cause notice for cancellation (REG-17) is answered within 7 working days of service. Send it to us before anything is filed; our team reviews the matter first. See also our GST notice reply page.
Then a cancellation cannot be filed again. The route is revocation, whose time limit runs from service of the order. See our GST revocation page and act quickly.
We have not found a portal fee for Form GST REG-16, and we confirm that on the portal before filing. The payment on stock and capital goods, tax, interest and late fee are paid to the government and are not our fee.
No. StampMitra is a filing assistance platform. We prepare and file the application and the returns. The decision is the officer's. For a question of inheritance or a dispute between heirs, take advice from a lawyer.