Managing Your GST Lifecycle: LUT & Cancellation

A GSTIN is an active responsibility. Sometimes you need to expand (Export), and sometimes you need to close.

1. Letter of Undertaking (LUT)

If you export services or goods, filing an LUT is a 'No-Brainer'.

• Benefit: Export without paying IGST upfront. This preserves your cash flow.
• Renewal: LUT must be filed every financial year before April 1st.

2. Cancellation of GST Registration

Closing a business or falling below the threshold? You MUST cancel your GSTIN.

• The Risk: If you stop filing returns without cancelling, penalties accumulate indefinitely (even for Nil returns).
• Process: File Form GST REG-16. You must pay off any pending liabilities or tax on closing stock.

3. Final Return (GSTR-10)

Once cancellation is approved, you have 3 months to file the 'Final Return'. This is different from your regular monthly return.

Pro Tip: Ensure all your vendors have filed their GSTR-1 before you cancel, so you don't lose any Input Tax Credit during the closure.