GSTR-10: A Comprehensive Overview

GSTR-10 is an essential return for individuals and businesses that have chosen to cancel their Goods and Services Tax (GST) registration. This return acts as a final compliance measure for taxpayers whose registration has been canceled or surrendered. Grasping the nuances of GSTR-10 is crucial for adhering to the regulations established under GST law.

Who is Required to File GSTR-10?

Filing GSTR-10 is mandatory for registered individuals whose GST registrations have been canceled. However, specific categories of taxpayers are exempt from this obligation, including:

• Input Service Distributors (ISD)
• Taxpayers under the Composition Scheme
• Non-Resident Taxable Persons (NRTP)
• Taxpayers obligated to deduct TDS under Section 51 of the CGST Act
• Taxpayers required to collect TCS under Section 52 of the CGST Act

Key Deadlines for GSTR-10 Submission

The GSTR-10 must be submitted within three months from the cancellation date of GST registration or from the date of the cancellation order—whichever is later. For instance, if your GST registration is canceled on January 1, 2025, and you receive the cancellation order on January 5, 2025, your GSTR-10 must be filed by April 5, 2025.

Required Information for GSTR-10

The GSTR-10 return comprises 11 sections. Key sections that are automatically populated upon logging into the GST portal include:

• GSTIN
• Legal Name
• Business or Trade Name
• Correspondence Address

Taxpayers are also required to provide details in the following sections:

1. Effective Date of Surrender/Cancellation: Specify the cancellation date from the order.
2. Reference Number of Cancellation Order: Unique identifier assigned during cancellation.
3. Date of Cancellation Order: The date when the cancellation order was issued.
4. Closing Stock Details: Provide information on stock held when the business ceases operations, including:
   • Inputs in stock with invoices
   • Semi-finished or finished goods with invoices
   • Capital goods or machinery in stock
   • Inputs without invoices
5. Tax Payable and Paid: Include details on ITC reversals and taxes due or paid, detailing CGST, SGST, IGST, and Cess.
6. Interest and Late Fees: Provide a breakdown of interest and late fees that are payable or have been paid.
7. Verification: Confirm that all provided information is accurate.

After completing all sections, taxpayers must digitally sign the return using either a Digital Signature Certificate (DSC) or Aadhaar-based verification.

Important Considerations for GSTR-10 Filing

In cases where invoices are missing for stock, the values must be estimated based on market value, as per CGST Rule 44(3). This estimation must be certified by a practicing chartered accountant or cost accountant and submitted along with the GSTR-10.

For capital goods, the value is calculated using a specific formula: Invoice value less 1/60th of the value for each month or part thereof since the invoice date, assuming a useful life of five years.

Consequences of Failing to File GSTR-10

Neglecting to file GSTR-10 by the due date can result in significant penalties. Taxpayers will receive a notice and will have 15 days to submit their return. If they fail to comply, a tax officer will issue a final order for cancellation and assess any due tax along with applicable interest or penalties.

GSTR-10 Compared to Annual Returns

Unlike GSTR-10, which serves as a final return for canceled registrations, the annual return (GSTR-9) is a requirement for all registered taxpayers to file once a year. Understanding the differences between these two types of returns is vital for compliance.

Conclusion

Filing GSTR-10 is a critical step for businesses that have exited the GST framework. By following the guidelines and deadlines, taxpayers can ensure compliance and avoid penalties. Stay informed and organized to effectively navigate the complexities of GST registration cancellation.