diff --git a/src/Spd.Manager.Licence/BizLicAppContract.cs b/src/Spd.Manager.Licence/BizLicAppContract.cs
index 8bf5f7f6e..3c2a3a768 100644
--- a/src/Spd.Manager.Licence/BizLicAppContract.cs
+++ b/src/Spd.Manager.Licence/BizLicAppContract.cs
@@ -14,6 +14,7 @@ public interface IBizLicAppManager
     public Task<BizLicAppCommandResponse> Handle(BizLicAppUpdateCommand command, CancellationToken ct);
     public Task<IEnumerable<LicenceAppListResponse>> Handle(GetBizLicAppListQuery cmd, CancellationToken ct);
     public Task<FileResponse> Handle(BrandImageQuery qry, CancellationToken ct);
+    public Task<Unit> Handle(CancelDraftApplicationCommand cmd, CancellationToken ct);
 }
 
 public record BizLicAppUpsertCommand(BizLicAppUpsertRequest BizLicAppUpsertRequest) : IRequest<BizLicAppCommandResponse>;
@@ -22,6 +23,8 @@ public record BizLicAppSubmitCommand(BizLicAppUpsertRequest BizLicAppUpsertReque
 public record GetBizLicAppQuery(Guid LicenceApplicationId) : IRequest<BizLicAppResponse>;
 public record GetLatestBizLicenceAppQuery(Guid BizId) : IRequest<BizLicAppResponse>;
 public record GetBizLicAppListQuery(Guid BizId) : IRequest<IEnumerable<LicenceAppListResponse>>;
+public record CancelDraftApplicationCommand(Guid ApplicationId) : IRequest<Unit>;
+
 public record BizLicAppReplaceCommand(
     BizLicAppSubmitRequest LicenceRequest,
     IEnumerable<LicAppFileInfo> LicAppFileInfos)
diff --git a/src/Spd.Manager.Licence/BizLicAppManager.cs b/src/Spd.Manager.Licence/BizLicAppManager.cs
index 781f67cbd..e3f6907bf 100644
--- a/src/Spd.Manager.Licence/BizLicAppManager.cs
+++ b/src/Spd.Manager.Licence/BizLicAppManager.cs
@@ -30,6 +30,7 @@ internal class BizLicAppManager :
         IRequestHandler<BizLicAppUpdateCommand, BizLicAppCommandResponse>,
         IRequestHandler<GetBizLicAppListQuery, IEnumerable<LicenceAppListResponse>>,
         IRequestHandler<BrandImageQuery, FileResponse>,
+        IRequestHandler<CancelDraftApplicationCommand, Unit>,
         IBizLicAppManager
 {
     private readonly IBizLicApplicationRepository _bizLicApplicationRepository;
@@ -356,6 +357,18 @@ public async Task<FileResponse> Handle(BrandImageQuery qry, CancellationToken ct
             return new FileResponse(); //error in S3, probably cannot find the file
         }
     }
+    public async Task<Unit> Handle(CancelDraftApplicationCommand cmd, CancellationToken ct)
+    {
+        try
+        {
+            await _bizLicApplicationRepository.CancelDraftApplicationAsync(cmd.ApplicationId, ct);
+        }
+        catch (ArgumentException e)
+        {
+            throw new ApiException(HttpStatusCode.Forbidden, e.Message);
+        };
+        return default;
+    }
 
     private async Task ValidateFilesForRenewUpdateAppAsync(BizLicAppSubmitRequest request,
         IList<LicAppFileInfo> newFileInfos,
diff --git a/src/Spd.Presentation.Licensing/Controllers/LicenceAppController.cs b/src/Spd.Presentation.Licensing/Controllers/LicenceAppController.cs
index e85691e1f..1cb70b975 100644
--- a/src/Spd.Presentation.Licensing/Controllers/LicenceAppController.cs
+++ b/src/Spd.Presentation.Licensing/Controllers/LicenceAppController.cs
@@ -49,5 +49,20 @@ public async Task<IEnumerable<LicenceAppListResponse>> GetBizLicenceApplications
         {
             return await _mediator.Send(new GetBizLicAppListQuery(bizId), ct);
         }
+
+        /// <summary>
+        /// Cancel Draft Application
+        /// </summary>
+        /// <param name="appId"></param>
+        /// <param name="ct"></param>
+        /// <returns></returns>
+        [Route("api/applications/{appId}")]
+        [HttpDelete]
+        [Authorize(Policy = "BcscBCeID")]
+        public async Task<ActionResult> CancelDraftApplication([FromRoute] Guid appId, CancellationToken ct)
+        {
+            await _mediator.Send(new CancelDraftApplicationCommand(appId), ct);
+            return Ok();
+        }
     }
 }
\ No newline at end of file
diff --git a/src/Spd.Resource.Repository/BizLicApplication/BizLicApplicationRepository.cs b/src/Spd.Resource.Repository/BizLicApplication/BizLicApplicationRepository.cs
index 371f336cd..8b229876c 100644
--- a/src/Spd.Resource.Repository/BizLicApplication/BizLicApplicationRepository.cs
+++ b/src/Spd.Resource.Repository/BizLicApplication/BizLicApplicationRepository.cs
@@ -1,4 +1,6 @@
 using AutoMapper;
+using MediatR;
+using Microsoft.AspNetCore.Http.HttpResults;
 using Microsoft.Dynamics.CRM;
 using Microsoft.OData.Client;
 using Spd.Resource.Repository.PersonLicApplication;
@@ -356,4 +358,20 @@ private spd_licence GetLicence(Guid licenceId)
 
         return licence;
     }
+
+    public async Task CancelDraftApplicationAsync(Guid applicationId, CancellationToken ct)
+    {
+        spd_application? app = _context.spd_applications.Where(a => a.spd_applicationid == applicationId).FirstOrDefault();
+        if (app == null) 
+            throw new ArgumentException("Application not found");
+        if (app.spd_licenceapplicationtype == (int)LicenceApplicationTypeOptionSet.New) 
+            throw new ArgumentException("Canceling application with this type is not allowed.");
+        if (app.statuscode != (int)ApplicationStatusOptionSet.Draft && app.statuscode != (int)ApplicationStatusOptionSet.Incomplete) 
+            throw new ArgumentException("Canceling application with this status is not allowed.");
+
+        app.statecode = DynamicsConstants.StateCode_Inactive;
+        app.statuscode = (int) ApplicationStatusOptionSet.Cancelled;
+        _context.UpdateObject(app);
+        await _context.SaveChangesAsync(ct);
+    }
 }
diff --git a/src/Spd.Resource.Repository/BizLicApplication/Contract.cs b/src/Spd.Resource.Repository/BizLicApplication/Contract.cs
index 380a832d9..15104cb46 100644
--- a/src/Spd.Resource.Repository/BizLicApplication/Contract.cs
+++ b/src/Spd.Resource.Repository/BizLicApplication/Contract.cs
@@ -1,4 +1,5 @@
-using Spd.Resource.Repository.Application;
+using MediatR;
+using Spd.Resource.Repository.Application;
 using Spd.Resource.Repository.Biz;
 using Spd.Resource.Repository.PersonLicApplication;
 
@@ -8,6 +9,7 @@ public partial interface IBizLicApplicationRepository
     public Task<BizLicApplicationCmdResp> CreateBizLicApplicationAsync(CreateBizLicApplicationCmd cmd, CancellationToken ct);
     public Task<BizLicApplicationCmdResp> SaveBizLicApplicationAsync(SaveBizLicApplicationCmd cmd, CancellationToken ct);
     public Task<BizLicApplicationResp> GetBizLicApplicationAsync(Guid licenceApplicationId, CancellationToken ct);
+    public Task CancelDraftApplicationAsync(Guid applicationId, CancellationToken ct);
 }
 
 public record BizLicApplicationCmdResp(Guid LicenceAppId, Guid AccountId);