The Department of Trade and Taxes under the Government of National Capital Territory of Delhi has issued a fresh order streamlining the process for cancellation of GST registrations which mandated zonal approval for Input Tax Credit (ITC) above Rs. 2.5 crore.
The order, dated April 2, 2026, supersedes all previous directives on the subject and aims to bring clarity and uniformity in decision-making.
The order has been issued under the powers conferred by Section 5(1) read with Section 2(91) of the Delhi Goods and Services Tax Act, 2017. It formally assigns jurisdiction and authority to proper officers for handling applications related to cancellation of GST registration filed by taxpayers under Section 29 of the Act.
As per the new framework, Ward-level Proper Officers have been designated as the primary authority to process and decide applications for cancellation of registration. However, this authority is subject to a monetary threshold based on the amount of Input Tax Credit (ITC) involved in each case.
In cases where the total ITC availed and/or passed on by the taxpayer exceeds ₹2.5 crore, the Ward Officer cannot independently decide the application. Such cases must be decided only after obtaining prior approval from the concerned Zonal In-charge. This introduces an additional supervisory layer for high-value matters involving significant revenue implications.
Conversely, where the total ITC involved does not exceed ₹2.5 crore, the Proper Officer posted in the Ward is empowered to decide the application independently without requiring prior approval from higher authorities. This is expected to expedite the disposal of lower-risk cases while ensuring efficiency in administration.
The order also mandates strict procedural compliance. The Ward Officer is required to scrutinize each application thoroughly in accordance with applicable statutory provisions, circulars, instructions, and Standard Operating Procedures. In cases requiring approval, a reasoned proposal along with findings must be submitted to the Zonal In-charge on a case-to-case basis.
Further, the order stipulates that a copy of the approval granted by the Zonal In-charge must be mandatorily uploaded along with the speaking order. This requirement is aimed at enhancing transparency, ensuring accountability, and maintaining proper audit trails in decision-making.
The directive has been circulated to all concerned officials, including Zonal In-charges, Assistant Commissioners, and GST Officers, and has also been forwarded for uploading on the departmental portal. The move is expected to strengthen internal controls, curb potential misuse of ITC, and ensure a more consistent and risk-based approach to GST registration cancellations in Delhi.
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