GSTR-10, often referred to as the "Final Return," is a crucial one-time return that a taxpayer must file when their Goods and Services Tax (GST) registration is cancelled or surrendered. Its purpose is to ensure that all outstanding tax liabilities are settled and all Input Tax Credit (ITC) on closing stock is reversed, providing a clear exit from the GST system.

 

Who Needs to File GSTR-10?

GSTR-10 is mandatory for every registered person under GST whose registration has been cancelled or surrendered, regardless of whether the cancellation was initiated by the taxpayer (voluntary surrender) or by the tax authorities (suo-moto cancellation).

Exemptions from Filing GSTR-10: The following types of taxpayers are not required to file GSTR-10:

• Input Service Distributors (ISD)

• Persons paying tax under the Composition Scheme (they file GSTR-4)

• Non-Resident Taxable Persons (NRTP)

• Persons required to deduct Tax at Source (TDS) under Section 51 of the CGST Act (Government Departments, PSUs, etc.)

• Persons required to collect Tax at Source (TCS) under Section 52 of the CGST Act (E-commerce Operators)

 

Due Date for Filing GSTR-10

GSTR-10 must be filed within three months from the date of cancellation of registration or the date of the cancellation order, whichever is later.

Example: If your GST registration was cancelled on January 1, 2025, and the cancellation order was issued on January 5, 2025, then the due date for filing GSTR-10 would be April 5, 2025 (three months from January 5, 2025).

 

Pre-requisites for Filing GSTR-10

Before you can file GSTR-10, ensure the following:

• You have a valid User ID and password for the GST Portal.

• Your GST registration has actually been cancelled or surrendered, and you have the relevant cancellation order.

• All your regular GST returns (GSTR-1, GSTR-3B, etc.) up to the effective date of cancellation have been filed. The system will generally not allow GSTR-10 filing if previous period returns are pending.

• Any outstanding tax liabilities, interest, or late fees from previous periods are cleared.

 

Details to be Provided in GSTR-10

GSTR-10 captures critical information related to the period leading up to the cancellation. It has 11 sections, with some auto-populated:

Auto-Populated Sections:

1. GSTIN

2. Legal Name

3. Trade Name (if any)

4. Address for future correspondence

Sections where Information needs to be Furnished:

1. Effective Date of Surrender/Cancellation: The exact date from which your GST registration is considered cancelled.

2. Reference Number of Cancellation Order: The unique ID provided by the tax authorities in the cancellation order.

3. Date of Cancellation Order: The date on which the cancellation order was issued.

4. Particulars of Closing Stock: This is the most crucial part. You must declare details of inputs, semi-finished goods, finished goods, and capital goods held in stock on the effective date of cancellation. For these, you need to provide:

   • Inputs in stock (where invoice is available): Details like GSTIN of supplier, invoice/bill of entry number and date, description of goods, UQC, quantity, value, and the ITC/Tax payable (CGST, SGST/UTGST, IGST, Cess).

   • Inputs contained in semi-finished or finished goods (where invoice is available): Similar details as above.

   • Capital goods/plant and machinery in stock: Invoice details, value, and the ITC/Tax payable.

   • Inputs in stock or in semi-finished/finished goods (where invoice is NOT available): In this case, the amount must be estimated based on the prevailing market price of the goods (as per Rule 44(3) of CGST Rules) and certified by a practicing Chartered Accountant or Cost Accountant. This certificate must be uploaded.

   • Important Note on ITC Reversal: When GST registration is cancelled, any Input Tax Credit (ITC) previously claimed on the closing stock (inputs, semi-finished goods, finished goods, and capital goods) needs to be reversed. This is because these goods are no longer used for taxable supplies. The amount to be reversed will be the higher of the ITC availed on such stock or the output tax payable on the market value of such stock. For capital goods, the ITC reversal is computed proportionally based on the remaining useful life (5 years, 60 months).

5. Amount of Tax Payable and Paid: This section summarises the ITC reversal or any other tax liability determined from Table 8, along with interest and late fees. You need to declare the amounts payable and how they are paid (through Electronic Cash Ledger or Electronic Credit Ledger).

6. Interest, Late Fee Payable and Paid: Breakdown of any interest and late fees due for non-compliance or delayed payments, categorized under relevant tax heads.

7. Verification: A solemn affirmation and digital signature (DSC or EVC) to confirm the accuracy of the information provided.

 

Step-by-Step GSTR-10 Filing Process (Online)

1. Login to GST Portal: Go to www.gst.gov.in and log in with your credentials.

2. Navigate to Final Return: Click on Services > Returns > Final Return.

3. Initiate GSTR-10: On the GSTR-10 tile, click the PREPARE ONLINE button. (If you have a large number of records, you might opt for the PREPARE OFFLINE utility, fill details in the Excel template, generate a JSON file, and then upload it).

4. Update Basic Details (if required): Verify the auto-populated details.

5. Enter Cancellation Details: Provide the "Effective Date of Surrender/Cancellation," "Reference number of Cancellation order," and "Date of Cancellation order."

6. Update Closing Stock Details (Table 8):

   • Click on the relevant tiles for "Goods Details with Invoices" (8A, 8B, 8C) and "Goods Details Without Invoices" (8D).

   • Enter the required details for each type of stock.

   • For stock without invoices (Table 8D), remember to estimate the value at the prevailing market price and indicate that a CA/CMA certificate is required.

7. Enter Tax Payable and Paid (Table 9): The system will calculate the ITC reversal or tax payable based on your stock details. You need to verify this and ensure sufficient balance in your electronic cash/credit ledger to offset the liability. If not, generate a challan and make the payment.

8. Enter Interest and Late Fee (Table 10): Declare any interest and late fees.

9. Compute Liability: Click the COMPUTE LIABILITIES button to allow the system to calculate your final liabilities.

10. Preview Draft GSTR-10: Download and carefully review the draft GSTR-10 in PDF or Excel format. Ensure all details are accurate.

11. Proceed to File: Once satisfied, click PROCEED TO FILE.

12. File GSTR-10: Submit the return using your Digital Signature Certificate (DSC) (mandatory for companies and LLPs) or Electronic Verification Code (EVC) (for other taxpayers).

13. Acknowledgement: Upon successful filing, an Acknowledgement Reference Number (ARN) will be generated.

 

Penalties for Not Filing GSTR-10

Failing to file GSTR-10 within the stipulated due date can lead to significant penalties:

• Late Fee:

  • A late fee of INR 200 per day (INR 100 CGST + INR 100 SGST/UTGST) is levied for each day of delay.

  • There is no upper limit specified for the late fee for GSTR-10 in the law, making it potentially very high if the delay is long.

  • Note: While there have been temporary waivers or caps on late fees for other returns or specific periods, GSTR-10 generally carries a daily penalty without a cap, making timely filing critical.

• Notice and Assessment: If GSTR-10 is not filed, the tax officer may issue a notice. If the taxpayer still fails to file the return within the given grace period (usually 15 days), the officer may proceed with a final assessment of the tax liability based on available records, along with applicable interest and penalties.

• Consequences of Non-Compliance: Non-filing of GSTR-10 can keep the GSTIN "active" on paper, leading to future compliance obligations and potential issues during departmental audits. It also means you haven't formally exited the GST system, which could impact other business registrations or licenses.