GST transformed India’s indirect tax system by subserving various central and state taxes into a common tax levied across the entire country and fulfilling the long-cherished vision of ‘one nation, one tax of the government. It eliminated the cascading effect of taxes, created a common market with the abolition of state barriers, reduced compliance costs, controlled tax evasion, and brought uniformity in taxation, resulting in unprecedented growth in the economy of our country.
Constant improvements were made to the GST system to increase efficiency and bring transparency to the indirect tax system through many amendments and revisions. Filing the periodic returns as specified under law is an important part of the compliance process in GST. It is mandatory for businesses that opt out of the GST system to file a final return in Form GSTR-10.
Essentials of GSTR-10
It is the final return that taxpayers who have opted for the cancellation of their GST registration must file. It must be filed within three months from the date of cancellation or the date of the order of cancellation, whichever is later. The final return is a declaration of the closing stock and the liabilities and credits associated with it. Non-filing of the return can result in penalties and other consequences. All the periodic returns, like GSTR-3B and GSTR-1, are required to be filed up to the date of cancellation before filing Form GSTR-10. Both online and offline facilities are provided by GSTN on the common portal for filing the return.
Also Read: Introduction to GSTR-10 (Final Return)
Who is required to file GSTR-10?
All taxpayers who cancel their GST registration voluntarily or by an order of government are required to file GSTR-10, with the exception of input service distributors, composition scheme taxpayers, casual taxpayers, non-resident taxable persons, and persons collecting and deducting tax under TCS/TDS.
Details required to be furnished in GSTR-10
The information required to be furnished while filing the final GSTR-10 involves the following steps:
In this step, the basic details of the taxpayer are reflected. Details such as GSTIN, legal name, and trade are auto-populated when the taxpayer logs into the portal with his valid user id and password. He then has to update details like address for future correspondence, and date of cancellation of registration, reason for cancellation, reference number, and date of cancellation order.
This Section comprises of the details of
- Inputs are held in stock where invoices are available.
- Inputs contained in semi-finished, finished goods held in stock where invoices are available
- Inputs contained in semi-finished, finished goods held in stock where invoices are not available.
- Capital goods, plants, and machinery are held in stock.
The details of the input tax credit already available on the above stock are required to be reversed and paid back to the government.
In the case of inputs held in stock for which invoices are not available, the registered person must estimate the value of the stock based on prevailing market price of the goods as per Rule 44(3). This must be certified by a chartered accountant or cost accountant. The copy of the certificate is required to be uploaded while filing the final return.
After entering all the details, the taxpayer can preview the draft GSTR-10 summary, download it and check the information provided. If any discrepancies are observed, corrections can be made.
Next, the tax, interest, and late fee, if any, are computed based on the information of inputs, capital goods, plants, and machinery held in stock and the tax liability, including the input tax credit on the stock provided above. The fields for tax, interest, and late fees are auto-populated and not editable.
Additional details can be added, and rectifications can be made in the above tables even after the ‘proceed to file’ button is clicked. Then steps 1 to 3 have to be repeated.
Amendments and revisions in GSTR-10
GSTR-10 cannot be modified or revised once it is filed. Then the taxpayer must repeat the first three steps again and calculate the liabilities.
The next step is payment of tax through tables 9 and 10. The balances in the electronic cash and credit ledgers can be utilized for setting off liabilities.
The “preview draft GSTR-10” alternative is accessible at each step of the submitting process. So the taxpayer can verify the details at every step and make revisions and rectifications wherever necessary.
Possible errors and their rectification while filing GSTR-10
Incorrect information in basic details
The taxpayers must ensure that the personal information, such as name, trade name, and address, is correct. If there is change in address, it must be updated.
Discrepancy in details in stock and input tax credit details
The value of stocks, semi-finished and finished goods, finished goods, capital goods, and plant and machinery should be correctly reported so that tax liabilities and input tax credits can be accurately calculated. The values reported should match the records maintained by them.
Valuation and certification by a chartered or cost accountant
The value of the stock for which invoices are not available must be valued at the prevailing market rate and certified by a authorized chartered accountant or cost accountant. The certificate must be uploaded in the portal at the time of filing the final return GSTR-1
NIL GSTR-10 filing.
When there are no inputs held in stock, inputs in semi-finished goods, finished goods, capital goods, and plant and machinery on which input tax credit is required to be reversed, or the amount of tax paid back to the government, then a NIL return must be filed. Sometimes businesses fail to file the NIL return, which may result in them receiving notices from the tax authorities.
Mandatory filing of GSTR-3B and GSTR-1
It is mandatory for businesses that have filed for cancellation of registration to have filed all the periodic regular returns, like GSTR-3B and GSTR-1, before filing GSTR-10. Businesses may miss out on filing some of the returns, and then the system will not allow them to file the GSTR-10 return.
Application not filed or cancellation order not received
The taxpayer cannot see the link to the final return in the GST portal to file the form GSTR-10 if the application for cancellation of registration has not been filed by the taxpayer or the cancellation order has not been issued by the GST authorities. After ensuring that the application for cancellation of registration has been filed, taxpayers must file the final return after receiving the cancellation order from the GST authorities.
Non-payment or partial payment of tax
It is mandatory for taxpayers to pay the liabilities computed in the final return. The option to file GSTR-10 is enabled only after the liabilities are cleared. If partial payments through electronic cash and credit registers are made, the taxpayer must pay the remaining amount externally through his bank account.
Important amendments in GSTR-10
But the taxpayers faced many challenges that resulted in late filing and non-filing of returns. One such measure introduced by the government to encourage compliance and help taxpayers was the introduction of the GST amnesty scheme.
Amnesty scheme to file GSTR-10 final return
Under the GST amnesty scheme, taxpayers have been given the opportunity to file their pending GSTR-10 final returns before June 30, 2023, without any penalty.
Taxpayers who received assessment orders under Section 62 of the CGST Act and taxpayers applying for revocation of cancelled GST registration in Form REG-21 have been given relief under the amnesty scheme. The GST amnesty scheme for non-filers for GSTR-4, GSTR-9 and GSTR-10 has been extended by the Central Board of Indirect Taxes (CBIC). According to the announcement, the deadline for submission of the form was extended from June 30th, 2023, to August 31st, 2023.
Reduction in late fee for non-filing of GSTR-10
As per Notification No. 08/2023-non-filing of Form GSTR-10 final return within the due date, taxpayers who have not filed the final return within the due date can file GSTR-10 at a concessional late fee of the maximum amount of Rs. 1000 (Rs. 500 under CGST and Rs. 500 under SGST). The late fee is waived in excess of Rs. 1000 for delayed filing of GSTR-10 if the return is filed between April 1, 2023, and June 30, 2023.
GST section 141: Revocation or cancellation of GST registration
Notification No. 38/2023-Central Tax, dated August 4, 2023
The time limit for filing an application for revocation or cancellation of GST registration was 30 days, as per Section 30(1) of the CGST Act. The time duration has now been extended to 90 days from the date of the order of cancellation or such period as may be authorized by the commissioner, but must not exceed 180 days as specified under Rule 23 of the CGST rules.
GST Section 148: Unregistered Person Assessments
The time limit for submitting either GSTR-3B or GSTR-10 in the case of best judgment assessment when the best judgment order is considered withdrawn is extended from 30 days to 60 days. This period can be further extended to 120 days upon payment of an additional late fee above the standard late fee.
Many amendments and revisions are introduced by the government to simplify compliance and help taxpayers. But there are still many problems faced by taxpayers. Some of the common errors, like non-filing of NIL return, incorrect valuation of stock without invoices, not uploading the certificate issued by the chartered accountant or cost accountant, etc., are some of the common mistakes made by taxpayers while filing the final return. They have to understand and rectify these issues so that they can file an accurate GSTR-10 and exit from the GST regime in a smooth and hassle-free manner.
Frequently asked questions
Can the taxpayer view the details of the late fee calculation while filing GSTR-10?
Yes, the taxpayer can view the details of the late fee calculation by clicking on the late fee hyperlink in tables 9 and 10.
What happens after GSTR-10 is filed?
After Form GSTR-10 is filed, the ARN is generated, and a successful filing message is sent to the taxpayer both through email and mobile. Electronic cash and credit ledgers get updated, and the return filed is saved in the record search and made available to the tax authorities.