Hi @Kawaldeep Kaur ,
I would make a brief summary of this thread:
Issue Symptom:
If an organization has SharePoint Plan 2 and SharePoint Plan 1 licenses and they are only leveraging SharePoint Plan 2. Can they return SharePoint plan 1 licenses?
Answer:
SharePoint Plan 1 license is not a prerequisite to utilizing SharePoint Plan 2 licenses. You can cancel your Microsoft 365 subscription any time by going to the Microsoft 365 admin center.
You could click the "Accept Answer" button for this summary to close this thread, and this can make it easier for other community member's to see the useful information when reading this thread. Thanks for your understanding!
If you still have any other questions, please feel free to comment here and I'm glad to provide further support.