GST Cancellation Is Not the End – File Your Final Return Correctly

 

What Is the Final Return in Case of GST Cancellation?

Cancellation of GST registration does not end compliance immediately. Even after surrender or cancellation by the department, one important legal requirement remains — filing the Final Return.

As per Section 45 of the Central Goods and Services Tax Act, 2017, every registered person whose GST registration has been cancelled must file a Final Return in Form GSTR-10 within three months from the later of:

  • The date of cancellation, or
  • The date of the cancellation order.

What Is GSTR-10?

GSTR-10 is a one-time return filed after GST cancellation. It ensures that all tax liabilities are properly settled before complete closure of registration.

It is applicable to:

  • Regular taxpayers whose registration is cancelled voluntarily
  • Taxpayers whose registration is cancelled by the department
  • Businesses that discontinue operations

It is not required for:

  • Composition taxpayers
  • Input Service Distributors (ISD)
  • TDS/TCS deductors
  • Non-resident taxable persons

What Needs to Be Reported?

The most important disclosure in GSTR-10 is the details of closing stock, including:

  • Inputs held in stock
  • Semi-finished goods
  • Finished goods
  • Capital goods

The taxpayer must reverse Input Tax Credit (ITC) on such stock. The amount payable will be:

  • ITC taken on the stock, or
  • Output tax payable on such goods,

Whichever is higher.

For capital goods, ITC is reduced at 5% per quarter (or part thereof) from the invoice date before calculation.

Why It Is Important

Many businesses assume that surrendering GST ends all compliance. However, non-filing of GSTR-10 may result in:

  • Late fees
  • Notices from the department
  • Demand and recovery proceedings
  • Incomplete closure of GST records

Proper filing ensures clean closure and protects the taxpayer from future litigation.

Conclusion

The final form in case of GST cancellation is GSTR-10. It is a crucial compliance step that settles tax liability on closing stock and capital goods. Businesses should calculate ITC reversal carefully and file within the prescribed time to avoid penalties.

#GST
#GSTCancellation
#GSTR10
#TaxCompliance
#InputTaxCredit
#GSTIndia
#CharteredAccountant

 

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