Final Return – Section 45 of GST

Under the GST regime in India, compliance with return filing requirements is crucial for registered taxpayers. One such mandatory filing is the Final Return, governed by Section 45 of the CGST Act, 2017. This provision ensures that businesses winding up their GST registration properly disclose all outstanding tax liabilities.

Understanding Section 45 of the CGST Act

Section 45 states that every registered person whose GST registration has been cancelled must file a final return within three months from:

1. The date of cancellation, or

2. The date of the cancellation order, whichever is later.

This return must be filed in the prescribed form and manner, as per GST rules.

Objective of Final Return

The Final Return is a crucial compliance measure designed to ensure that businesses clear all pending GST liabilities before their registration is formally closed. It prevents tax evasion by requiring disclosure of any outstanding taxes on inputs, capital goods, and stock held as of the cancellation date.

Final Return vs. Regular GST Returns

Prescribed Form for Final Return (GSTR-10)

The Final Return under Section 45 of the CGST Act must be filed using Form GSTR-10. Key details required in this form include:

• GSTIN (Goods and Services Tax Identification Number)

• Effective date of cancellation

• Details of tax liabilities on closing stock

• Amount of tax payable and paid

• Details of input tax credit (ITC) reversal

Consequences of Non-Filing of Final Return

Failure to file GSTR-10 within the prescribed time can lead to:

1. Notice from GST Authorities – A notice in Form GSTR-3A may be issued to the taxpayer.

2. Penalty & Late Fees – A daily penalty of Rs. 100 per Act (CGST + SGST = Rs. 200 per day) may apply, subject to a maximum of Rs. 10,000.

3. Legal Action – The GST department can initiate further legal proceedings to recover unpaid dues.

Step-by-Step Guide to Filing GSTR-10

1. Log in to the GST portal.

2. Navigate to ‘Returns Dashboard’ and select ‘Final Return (GSTR-10).’

3. Enter GSTIN and effective cancellation date.

4. Provide details of stocks, tax liabilities, and input tax credit reversal.

5. Compute tax liability and make payment (if applicable).

6. Submit the return and verify using DSC or EVC.

7. Download the Acknowledgment for records.

Key Takeaways

• Section 45 mandates filing of a Final Return (GSTR-10) within three months of GST cancellation.

• It ensures settlement of all pending tax liabilities before deregistration.

• Non-compliance can attract penalties and legal consequences.

• Filing is done online via the GST portal.

For businesses planning to close their GST registration, timely compliance with Section 45 of the CGST Act is essential to avoid penalties and legal hassles.

Conclusion

Filing a Final Return under Section 45 of the CGST Act is a crucial compliance requirement for businesses whose GST registration has been cancelled. It ensures transparency in tax obligations and prevents legal complications. Taxpayers should adhere to the prescribed timeline and file GSTR-10 to avoid penalties and maintain a clean tax record.

For expert assistance in GST compliance, feel free to consult us at +91 9769647582 to ensure seamless filing and compliance with GST laws.