GSTR-10 Final Return

Who has to file it

• Every taxpayer whose registration is cancelled, whether on their own application or by the officer
• Due within three months of the date of cancellation, or the date of the cancellation order, whichever is later
• Composition dealers file GSTR-10 as well, though their reporting differs
• Input service distributors and non-resident taxable persons are outside it
• Persons deducting or collecting tax at source are outside it

The credit reversal

The substance of the return is the reversal. Where you hold stock, semi-finished or finished goods, or capital goods on which input credit was taken, an amount must be paid back.

For inputs held in stock the amount is the credit attributable to them. For capital goods it is the credit taken reduced by a prescribed percentage per quarter of use, or the tax on the transaction value, whichever is higher. Getting this computation wrong is the usual reason a return is queried.

Why it should not be ignored

• A per-day late fee runs until the return is filed
• A notice in Form GSTR-3A follows for non-filing
• Failure to file can lead to a best judgment assessment under Section 62
• The cancellation is not treated as fully concluded, which surfaces during due diligence
• It obstructs a fresh registration on the same PAN in some circumstances

How we handle it

1. 1 Establishing the date We fix the effective date of cancellation, since the three-month deadline and the stock position both run from it.
2. 2 Valuing closing stock Stock and capital goods held on that date are identified and valued.
3. 3 Computing the reversal The credit to be reversed is calculated under the prescribed method, using the higher of the two bases for capital goods.
4. 4 Clearing pending returns Any outstanding returns up to the cancellation date are filed first, since GSTR-10 cannot stand alone.
5. 5 Filing GSTR-10 is filed with the certificate where required, and the acknowledgement preserved.

Frequently asked questions