GSTR-10 is a crucial document for taxpayers who are required to cancel or surrender their GST registration. It is also called a final return and for the tax authorities, it provides a complete picture of the taxpayer’s financial activities, tax liabilities, and compliance observance up to the date of cancellation of GST registration. For the taxpayer, it provides a smooth exit from the GST regime. Payment of tax liability and input tax credit is an essential part of GSTR-10 filing. So let us delve into the topic and understand the process in detail:
Essentials of GSTR-10
GSTR-10 is the final return that is required to be filed by taxpayers when they cancel their registration either voluntarily or when it is initiated by the tax authorities. Certain categories of taxpayers are exempt from filing GSTR-19. They are input service distributors (ISD), non-resident taxpayers, casual taxpayers, composition taxpayers, TDS, and TCC taxpayers under sections 51 and 52 of CGST, respectively.
It is mandatory to file GSTR-10 within three months of the effective date of cancellation or the date of the order of cancellation, whichever is later. All the mandatory returns, like GSTR-3B and GSTR-1, must be filed up until the cancellation. A nil return can be filed when there are no inputs held in stock, capital goods, or machinery on which input tax credit is required to be reversed or the amount paid back to the government.
Purpose of GSTR-100
The purpose of GSTR-10 is to assess the amount of input tax contained in the stock of inputs, semi-finished goods, finished goods, and capital goods in stock on the day preceding the date of cancellation of registration or output tax payable on such goods, whichever is higher. The taxpayer is required to pay this amount before filing the final return. The final return is a crucial component of compliance as it provides complete information on the taxpayer’s financial activities up to the date of cancellation of GST registration.
Consequences of Non-filing of GSTR-10
If the applicant does not file the final return within the due date, he will receive a notice seeking an explanation for non-filing of the final return. The taxpayer must furnish an explanation for non-filing of the return within the due date. default continues even after the issuance of notice by the authorities. The authorities will issue an assessment order with the liability of the applicant, including late fees, interest, and other penalties.
Payment of tax liability and input tax credit (ITC) in GSTR-10
While filing the final return in GSTR-10, the taxpayer must furnish the value of the stock and the corresponding tax liability on the stock. He is required to offset the liability, inclusive of input tax credit, in respect of inputs held in stock and inputs contained in semi-finished or finished goods, capital goods, or plant and machinery, on the day prior to the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated as prescribed. The taxpayer is allowed to utilize any remaining balances in their electronic credit, cash ledgers to discharge the liabilities while filing the final return.
Read more: Filing Process and Due Dates for GSTR-10
Steps for payment of tax and ITC in GSTR-10
After the taxpayer has submitted the application for cancellation of GST registration or received the cancellation order from the authorities, he must file the final return in form GSTR-10 through the common portal provided by GST. The steps to file the return online on the portal for the taxpayer are as follows:
Step 1: Login and navigate to the GSTR-10 page
Navigate to the GST homepage www.gst.gov.in
Login with valid credentials
Go to services>returns>final return
In the GSTR-10 page, click on prepare online
Step 2: Update address for future correspondence
Where an application for cancellation is filed, the address filed in Form REG-16 is auto-populated. It is editable. Click on save.
Step 3: Update particulars of certifying chartered accountant or cost accountant
Details of chartered or cost accountants must be updated here.
This section needs to be updated for stocks without invoices. The chartered or cost accountant has to certify the accuracy of the value of such stocks.
Step 4: Enter details of stock
- Details of goods and invoices
In tables 8A, 8B, and 8C, enter details of goods with invoices. Here, enter the details separately for suppliers registered under GST and those registered under CX/VAT regimes. The details to be entered are:
- Invoice, bill of entry number
- Invoice, bill of entry number
Details of inputs held in stock, inputs contained in semi-finished or finished goods, and plants and machinery on which input tax credit is required to be reversed must be reported in the tables provided. Here, enter the details separately for suppliers registered under GST and unregistered suppliers
- Details of goods without invoices
In table 8D, enter the details of goods without invoices. Here enter the details of inputs held in stock, inputs contained in semi-finished, finished goods held in stock, on which input tax credit is required to be reversed.
Here, the valuation of the stock without invoices must be determined at the prevailing market rate and certified by a chartered or cost accountant. The certificate issued by the CA must be uploaded in the return.
Step 5: Preview of form GSTR-20
After entering all the details, click on the ‘preview on draft GSTR-10’ option. The draft GSTR-10 will be displayed. Review the summary carefully. The form can be edited if there are any discrepancies. After confirming the details, the return has to be filed.
Step 6: Filing and payment of tax
Click on ‘proceed to file’. The tax, late fee, and interest if any will be computed, auto-populated and reflected in table 9 and 10
Click on table 9 and 10 to pay liabilities and file the return
Additional details can be added even after clicking on ‘proceed to file’, and then you would be required to follow steps 1 to 3 again to file the return.
Click on the download filed GSTR-10 option to view the summary of the filed details in pdf format.
The cash and credit balances available to date are shown in the table.
There are two scenarios for the payment of tax:
Scenario 1: when available balance in cash is less than the amount required to offset the liabilities
In this scenario, part of the payment of liabilities can be made from the available balance in the electronic cash and credit ledgers. A challan can be created in the ‘create challan’ option for payment of the outstanding part of the liabilities. The amount in the challan is auto-populated.
Select the payment mode as e-payment, over-the-counter, NEFT, or RTGS.
Make the payment through net banking, a check, or a payment of cash through the bank.
Scenario 2: When the available balance in the electronic cash and credit ledgers is greater than the amount required to offset the tax liabilities, no amount needs to be paid. A refund of the excess amount can be claimed separately.
Step 7: Authentication of form GSTR-10
After selecting the declaration and authorized signatory check boxes, click on ‘File GSTR-10 Return’.
A warning message is displayed. Click on ‘yes’ and the’submit application page is displayed’. Click on the ‘file with DSC’ or ‘file with EVC’ option.
For filing with DSC, select the certificate and click on the sign button.
For filing with EVC, enter the OTP sent to the registered mobile of the authorized signatory registered at the GST portal and click on validate.
A success message and ARN are shown. The status of Form GSTR-10 turns to filed.
After Form GSTR-10 is filed:
An SMS and email are sent to the taxpayer on their registered mobile number and email ID.
Electronic cash and credit registers will be updated with the set-off of the liabilities.
The return filed will be saved in the record search and made available to the tax officials.
Step 8: Download filed GSTR-10 return.
Click the ‘download filed GSTR-10 ‘option to download the filed return.
GSTR-10 is a mandatory return after the cancellation of GST registration. It serves as a final document reflecting the financial transactions and tax liabilities of a business before its exit from the GST system. It ensures a smooth withdrawal from the compliance process of the goods and services tax regime. For the government, it ensures that businesses have followed the tax laws and discharged their tax obligations correctly and on time. They have complete information on the taxpayer’s financial activities until the time of their GST cancellation.
Frequently asked questions
Is there an offline tool for filing GSTR-10?
Answer: Yes, GSTN has provided an offline tool for filing GSTR-10.
Can the Form GSTR-10 be revised after it is filed?
Answer: No, the Form GSTR-10 cannot be revised after it is filed.
Is the amount paid during registration cancellation adjusted towards tax payment in GSTR-10?
Answer: Yes, the amount paid during registration of cancellation of GST registration is adjusted during the final payment in GSTR-10.
Can the tax official restore the cancelled registration after the final return has been filed?
Answer: Yes, the tax official can restore the cancelled registration after the final return has been filed by order of the appellate authority.