I have cancelled my GSTN but there has been balances in my credit ledger, how can I now reverse my balance ITC in ledger even after cancellation of GSTN

Reply—While filing the application for cancellation (REG-16) of registration, the taxpayer needs to fill the value of stock and corresponding tax liability on the stock, and accordingly offset the liability (tax payable) from Electronic Cash Ledger / Electronic Credit ledger equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished goods or finished goods held in stock or capital goods or plant and machinery, on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed.

As per Circular No.69/43/2018 Dated: 26th October 2018, It is clarified that this requirement to debit the electronic credit and/or cash ledger by suitable amounts should not be a prerequisite for applying for cancellation of registration. This can also be done at the time of submission of final return in FORM GSTR-10 In any case, once the taxpayer submits the application for cancellation of his/her registration from a specified date, he/she will not be able to utilize any remaining balances in his/her electronic credit/cash ledgers from the said date except for discharging liabilities under GST Act upto the date of filing of final return in FORM GSTR-10.

Therefore, the requirement to reverse the balance in the electronic credit ledger is automatically met.

In case it is later determined that the output tax liability of the taxpayer, as determined under sub-section (5) of section 29 of the CGST Act, was greater than the amount of input tax credit available, then the difference shall be paid by him/her in cash. It is reiterated that, as stated in sub-section (3) of section 29 of the CGST Act, the cancellation of registration does not, in any way, affect the liability of the taxpayer to pay any dues under the GST law, irrespective of whether such dues have been determined before or after the date of cancellation.