India’s Goods and Services Tax (GST) Act introduced a streamlined tax system in lieu of a laborious system of indirect taxes. For structural reporting and ease of compliance, the GST regime demands the filing of different GST forms based on various taxpayers’ categories, transactions, and business activities. The forms are significant for reporting outward and inward supplies, claiming input tax credit, payment of tax, and structural transparency of the tax system.
GST returns are generally categorized by function, i.e., returns, registrations, payments, and refunds, and further segmented by taxpayer types, including regular taxpayers, composition scheme dealers, non-resident taxpayers, Input Service Distributors (ISDs), and e-commerce operators. GSTR-1, for instance, is filed to report outward supplies, and GSTR-3B is a summary return for the monthly reporting of tax liability. Returns like GSTR-4 are for composition dealers, but annual returns and reconciliation statements are for GSTR-9 and GSTR-9C.
Each of these forms has a specific filing frequency (quarterly, monthly, or yearly) and due dates set by the GST authorities. Timely and correct submission of the same is required to prevent penalties and allow the free movement of input tax credit. Familiarity with the purpose and usage of each form is the solution to maintaining GST compliance for India’s businesses.
What is Form GSTR-10?
Form GSTR-10 is the final return that a registered taxpayer needs to complete under the Goods and Services Tax (GST) Act in the event of cancellation of their GST registration or surrender. Such a type is a formal closure of the tax filer’s GST compliance requirement and contains a list of inputs in stock, inputs in semi-finished and finished goods, and capital goods, equipment, and machinery as of one day prior to the cancellation date.
This is to be filed by all taxpayers whose registration has been cancelled, except for those under the composition scheme (who are required to file GSTR-4). The primary reason for GSTR-10 is to make sure that the taxpayer accounts for and pays correctly any tax due in respect of the remaining inventory or assets on which an input tax credit (ITC) was already utilised. This move is necessary to prevent the abuse of ITC following the cancellation of the registration.
The GSTR-10 must be submitted online within three months from the cancellation date or the order date of cancellation, whichever is later. Not submitting GSTR-10 can lead to a notice from the GST department, among other legal problems, such as penalties. Timely submission is therefore necessary to accomplish proper tax closure and also to be GST compliant.
Who is Not Required to File GSTR-10?
Form GSTR-10 is not to be filed by every registered taxpayer. The following taxpayers are exempt from filing GSTR-10:
- Composition Scheme taxpayers need to file GSTR-4 (composition dealer annual return) in lieu of GSTR-10 when their registration is cancelled.
- Non-resident taxable persons are not to file GSTR-10 because their registration is temporary; they only need to file GSTR-5.
- Input Service Distributors (ISDs) distribute input tax credits to other branches and file GSTR-6. They do not have taxable outward supplies and hence are exempt from filing GSTR-10.
- Tax deductors or collectors at source, like TDS (GSTR-7) or TCS deductors (GSTR-8), are not required to file GSTR-10 in case their registration is canceled.
- Casual taxable persons are temporary registrants who file GSTR-1 and GSTR-3B for their operations but are exempted from GSTR-10.
GSTR-10 is therefore only for regular taxpayers (except the aforementioned groups) whose registrations have been cancelled or surrendered. The intention is to furnish a closing statement of goods and liabilities not related to these kinds of taxpayers.
Important Considerations Before Filing Form GSTR-10
Properly filing GSTR-10 is critical to formally closing your GST compliance and to preventing future legal or tax issues. To properly and compliantly file GSTR-10 (Final Return) under the GST regime, a number of pre-requisites, conditions, and important considerations need to be considered:
Pre-requisites:
- GSTIN should be cancelled or in the process of cancellation. GSTR-10 can only be filed after the GST registration has been cancelled or where an application for cancellation has been granted.
- Correct login credentials should be submitted. Taxpayers must have a valid User ID as well as a password for the GST portal login.
- Filing of GSTR-10 requires a Digital Signature Certificate (DSC) for companies/LLPs and an Electronic Verification Code (EVC) for others.
Key Conditions & Points:
- Filing Deadline: GSTR-10 is to be filed within three months of the cancellation date or the date of the cancellation order, whichever is later.
- Stock and Capital Goods Information: The taxpayer is required to mention: Stock inputs, Semi-finished and finished products, Capital goods/machinery as of the previous day before cancellation. This data decides any tax liability on the current stock when the Input Tax Credit (ITC) has already been availed.
- Outstanding returns should be submitted first. Returns of earlier months (e.g., GSTR-1, GSTR-3B) should be submitted before the GSTR-10.
- No Revisions Permitted: Filing of GSTR-10 should be accurate since it cannot be revised.
- Late Filing Penalties: Late filing can result in a late fee and penalty, along with a notice from the GST officer.
Documentation For GSTR-10
According to the GST Act, some documents and information need to be easily accessible in order to file the GSTR-10 (Final Return). The records help the taxpayer accurately report their stock position and final tax dues on the date of cessation of their GST registration. Keeping these documents in order reduces the possibility of accumulating penalties or receiving letters from the GST department, ensures accurate filing, and avoids errors.
- GST Registration Information: The GST Identification Number of the taxpayer (GSTIN). Date of cancellation that is effective and, if so, the pre-existing cancellation order.
- Cancellation Date Stock Information: Complete inventory of stock inputs, semi-finished and finished products inputs, capital goods, plant, and machinery for which input tax credits (ITCs) were eligible.
- Purchase Vouchers and Invoices: Collect the invoices and supporting documents to claim an ITC.Closing inventory, raw material, and capital goods invoices.
- Information on ITC Reversal and Tax Payable: The stock liability tax is calculated (since the already claimed ITC has to be reversed). Information on taxes payable on capital goods and leftover inventories.
- Payment Documents (where applicable): Details on any tax payments made while filing GSTR-10, e.g., Form GST PMT-06.
- Electronic Signature/Electronic Verification Code: EVC (Electronic Verification Code) for individual taxpayers like proprietors and individuals or DSC (Digital Signature Certificate) for business entities and limited liability partnerships.
- Return Filing Status: As GSTR-10 cannot be filed otherwise, make sure all earlier GST returns (such as GSTR-1 and GSTR-3B) have been filed up to the date of cancellation.
Steps to File GSTR-10 Online
To file GSTR-10 online, it is required to clear all pending returns (like GSTR-1 and 3B) in advance, as after filing, the GSTR-10 cannot be edited. Filing on time (i.e., three months after cancellation) helps in avoiding penalties.
1. Log in to the official GST Portal https://www.gst.gov.in. Click on ‘Login’ to enter your username, password, and captcha code.
2. To obtain the GSTR-10 Form, log in and select the ‘Services’ option. Select ‘Returns’ and then ‘Final Return’. You will be taken to the dashboard of the GSTR-10 form.
3. Fill in the required details. The GSTR-10 has multiple sections. Please fill in the following information:
- Auto-filled basic information consists of GSTIN, legal name, trade name, and address.
- Cancellation Effective Date (auto-filled or filled in manually, as the case may be)
- Stock and ITC Details like Stock input, Semi-finished and finished products input, Capital goods, plant, and machinery
- Specify the HSN codes, quantity, value, and ITC to be reversed.
- Tax Payable
- The system will automatically calculate the tax payable as per the ITC declared.
4. Make the payment (if required). If tax is payable, a payment challan (GST PMT-06) will be auto-generated. Make payment through net banking, credit/debit card, or NEFT/RTGS. The transaction is recorded in the computerised cash ledger.
5. Choose ‘Preview Draft GSTR-10’ to download and see the completed form. Make any necessary changes. Click ‘Proceed to File’.
6. File with DSC or EVC. File either using a Digital Signature Certificate (DSC) (required for companies/LLPs) or an Electronic Verification Code (EVC) (for individuals). A successful filing will result in an Acknowledgement Reference Number (ARN).
7. Download the form submission acknowledgment. Get a confirmation alert and email. Download the acknowledgement receipt for record purposes.
Due Date of GSTR-10
The due date for the furnishing of GSTR-10 is three months from the date of cancellation of GST registration or the date of the order of cancellation, whichever is later.
Cancelled or surrendered taxpayers of GST registration are obliged to furnish this terminal return, except in the case of non-residents and composition dealers.
It is necessary to file within time to formally close GST compliance and to avoid paying fines. Non-compliance in filing GSTR-10 within the required period might invite a notice from the GST department, as well as possible late fees and other legal liabilities under the GST Act.
Consequences of Non-Compliance
Non-filing of GSTR-10 can have serious consequences. If a taxpayer fails to file the final return within the prescribed time limit, the GST department can issue a notice (Form GSTR-3A) seeking the filing within 15 days. For non-payment, penalties of ₹100 per day under CGST and SGST (amounting to ₹200 per day) can be levied, which will not exceed ₹5000. Further penalties and legal action may also be imposed. On top of this, the taxpayer may be left with no choice but to leave the cancellation process in a pending state, so that the GSTIN is still active and susceptible to future compliance and tax obligations.
Conclusion
Filing GSTR-10 is an essential part of formally bringing to a close your requirements under the GST regime after the cancellation of registration. It helps ensure that any earlier claimed input tax credit (ITC) on left-over inventory and capital assets is properly accounted for, and any tax is paid. Filing in a timely and accurate manner helps prevent legal issues, fines, and notifications by the GST authorities. It also ensures easy closure of your GSTIN in government records, thus freeing you from compliance obligations. Companies must pre-prepare the documents required, make sure all previous returns are filed, and optimise the use of the GST system to finalise the process. Since GSTR-10 cannot be revised once filed, one must review it carefully before filing.
At the end of the day, compliance with GSTR-10 requirements translates into good corporate practice while protecting oneself from possible legal and financial liability. It represents a smooth and professional withdrawal from the GST regime for the taxpayer.
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