How To File Your GSTR-10 Final Return For Cancelled GST Registrations

Purpose of GSTR-10

GSTR-10, also known as the Final Return, is a one-time document required to be filed by GST-registered taxpayers whose registration has been cancelled or surrendered. This return helps in declaring the tax liability for the period between the last return filed and the date of cancellation, ensuring that all dues are settled, and no further GST liabilities exist for the taxpayer.

Who is Required to File GSTR-10

All GST-registered entities whose registration has been cancelled or surrendered must file GSTR-10. This includes businesses that have voluntarily cancelled their registration or whose registration has been compulsorily cancelled by tax authorities. However, it excludes Input Service Distributors (ISD), non-resident taxable persons, and persons paying tax under the composition scheme.

Key Components of GSTR-10

Details of Outward Supplies

Taxpayers must report details of all outward supplies made from the last return filed until the date of GST registration cancellation. This ensures that all sales up to the point of cancellation are accounted for.

Input Tax Credit Reversals

GSTR-10 requires the taxpayer to reverse any input tax credit that is not eligible due to cancellation. This includes ITC on closing stock and any ITC that was availed but not utilized before cancellation.

Details of Stock on Hand

The taxpayer must declare the details of stock on hand as of the date of cancellation. This includes the value of finished goods, work-in-progress, and raw materials, which is essential for calculating the final tax liability.

Preparing for GSTR-10 Filing

Documents and Information Required

To accurately file GSTR-10, you'll need:

• The GST cancellation order and the effective date of cancellation.
• Details of the last return filed before cancellation.
• Invoices related to outward supplies made after the last return until the date of cancellation.
• Invoices and records for the stock on hand as of the date of cancellation, including purchase invoices to support the Input Tax Credit (ITC) claims.

Reconciliation Before Filing

Before filing GSTR-10, it's crucial to:

• Reconcile your sales and purchase records with the GST returns filed up to the date of cancellation.
• Ensure that all outward supplies and inward supplies are accounted for and that the ITC claimed is accurate and justified.

Step-by-Step Guide to Filing GSTR-10

Accessing the Form on the GST Portal

• Log in to the GST portal using your credentials.
• Navigate to the 'Services' > 'Returns' > 'Final Return' section and select the GSTR-10 form.

Completing and Submitting GSTR-10

• Fill in the necessary details, including the effective date of cancellation, details of outward supplies made, and ITC reversals.
• Declare the stock on hand as of the date of cancellation and calculate the tax liability, if any.
• Review the form for accuracy, then submit it using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).

Deadlines and Penalties

Filing Deadline for GSTR-10

GSTR-10 must be filed within three months from the date of cancellation or the date of the cancellation order, whichever is later. Adhering to this deadline is crucial to avoid penalties.

Consequences of Late Filing

Late filing of GSTR-10 attracts a penalty of INR 200 per day (INR 100 under CGST and INR 100 under SGST) up to a maximum of a quarter of the taxpayer's turnover in the state or union territory.

Common Mistakes to Avoid in GSTR-10 Filing

Inaccurate Reporting of Closing Stock

Ensure that the closing stock is accurately reported to avoid discrepancies in the tax liability. This includes a careful assessment of the stock's value and the applicable tax rates.

Failure to Reverse Applicable ITC

Not reversing the ITC that is not eligible post-cancellation is a common oversight. Ensure all necessary ITC reversals are made to reflect the correct tax liability.

Rectifying Errors in Filed GSTR-10

Process for Making Corrections

If errors are discovered after filing GSTR-10, the taxpayer may need to approach the GST authorities as the portal does not allow for direct amendments to the filed GSTR-10.

Limitations on Amendments

Corrections to the GSTR-10 are subject to approval by GST authorities, and there may be limitations based on the nature of the errors and the time elapsed since filing.

Conclusion

Filing GSTR-10, the Final Return, is a critical step for businesses that have cancelled their GST registration. It ensures that all pending tax liabilities are settled, and the taxpayer's GST obligations are concluded. By preparing diligently, adhering to the filing deadlines, and avoiding common mistakes, taxpayers can ensure a smooth and compliant closure to their GST registration. Regular updates from the GST council and guidance from GST professionals can further aid in navigating the complexities of GSTR-10 filing.