GSTR-10 Return Filing

GSTR-10 Return Filing in India

Are you voluntarily surrendering your GST Registration number?

Section 45 of the CGST Act, 2017, and Rule 81 of the CGST Rules mandate that every registered taxpayer whose GST registration number has been cancelled or who is voluntarily surrendering has to file. The GSTR-10 final return must be filed within three months from the effective date of cancellation or the date of the cancellation order, whichever is later. The return requires disclosure of closing stock, input tax credit (ITC) claimed, and the reversal of any unutilized ITC using Form DRC-03. It also includes taxpayer details, HSN-wise classification of stock, and final declaration via DSC or EVC. Filing GSTR-10 is crucial to avoid penalties of ₹200 per day, legal notices, and issues in future registration.

What is the GSTR-10 Return?

GSTR-10 is the final return filed by the taxpayer whose GST Registration has been cancelled or surrendered. The return is filed for:

• Declaring details of inputs held in stock,
• Semi-finished and finished goods, and
• Input tax credit (ITC) is involved in those goods, as on the date of cancellation of GST registration.

Legal Framework Governing GSTR-10

Section 45 of the CGST Act, 2017 states that every GST-registered person who wishes to surrender their GST voluntarily has to file the ‘final return’ within three months of the date of cancellation or the date of order of cancellation, whichever is later.

Rule 81 of the CGST Rules, 2017

Rule 81 outlines the format, contents, and filing timeframe for Form GSTR-10, as well as the proper process for submitting the final return through the GST portal or offline utility.

Who Needs to File the GSTR-10 Return?

GSTR-10 must be filed by:

1. Voluntarily surrendered registrants - Taxpayers, whether regular dealers, composite dealers, or casual taxable persons, who decide to close operations and surrender their GST registration.

2. Registered taxpayers whose registration was cancelled by the authorities

3. All categories of registrants - GSTR-10 is applicable regardless of taxpayer type, regular, composite, casual, or otherwise, except for certain excluded classes.

Exempted Taxpayer Categories

Certain are not strictly excluded from filing GSTR-10 return:

• Input Service Distributors (ISD)
• Non-resident taxable persons (NRTP)
• Persons paying tax under the composition scheme (Section 10 of the CGST Act)
• Persons deducting tax at source (TDS) under Section 51
• Persons collecting tax at source (TCS) under Section 52
• Casual taxable persons

Importance of GSTR-10 Return Filing

GSTR-10 return is essential for:

1. Legal closure of GST registration

GSTR-10 serves as the final return for a taxpayer whose GST registration has been cancelled or surrendered. Without this return, the taxpayer’s GST account remains incomplete in the records of the government. Filing GSTR-10 officially closes the compliance cycle for that GSTIN.

2. Reversal of Input Tax Credit (ITC)

If a taxpayer had availed of Input Tax Credit on goods or services that are still lying in stock (raw materials, semi-finished goods, or finished goods) on the date of cancellation, GSTR-10 ensures that this credit is properly reversed or paid back to the government.

3. Avoid penalties and notices

Non-filing or delay in filing GSTR-10 can attract penalties under Section 47 of the CGST Act, 2017, ₹200 per day of delay (₹100 CGST + ₹100 SGST), subject to a maximum of ₹5,000. Additionally, the taxpayer may receive notices under Sections 62 or 73 of the CGST Act, 2017, for non-compliance, leading to further complications.

4. Requirement for future registrations

If a business intends to restart operations or open a new entity in the future, a clean history with all returns, including GSTR-10, properly filed, ensures smooth processing of the new GST registration.

5. Declaration of stock and liabilities

GSTR-10 provides a final declaration of:

• Goods held in stock as of the cancellation date,
• ITC claimed on such goods,
• Any tax payable on the reversal of ITC.

6. Helps to track closure

For tax authorities, GSTR-10 is a tool to ensure that:

• The taxpayer has cleared all tax dues,
• No, ITC remains unjustly claimed,
• The taxpayer is no longer liable to file any further returns under that registration.

7. Mandatory under the GST Law

Filing GSTR-10 is not optional. As per Section 45 of the CGST Act, 2017, read with Rule 81, it is a statutory obligation for every person whose GST registration is cancelled.

Structure of GSTR-10 Return Form

Form GSTR-10 includes the following parts:

• Part A: Taxpayer Identification: Includes GSTIN, entity name, date of cancellation or surrender, and reason for cancellation.
• Part B: Details of goods held: It includes details of unsold inventory, such as raw materials, semi-finished goods, and finished goods, as of the cancellation date. Requires classification via HSN, along with value and quantity assessment.
• Part C: Input Tax Credit claimed: Identifies ITC available on stock, declared under CGST and SGST/UTGST. Requires breakdown and total ITC claimed, along with credit utilised.
• Part D: ITC reversal details: If ITC has been claimed on stock, the reversal amount payable to the government must be computed and declared. Payment must follow in Form DRC-03.
• Part E: Certification and Verification: Mandatory declaration by the taxable person, followed by verification through DSC or EVC of the Authorised Signatory or Principal Officer.