Section 45 of the Central Goods and Services Tax Act, 2017 deals with the final return to be furnished by a registered person whose GST registration has been cancelled.
The purpose of the final return is to provide a final statement of the taxpayer’s GST position after cancellation of registration and to ensure that any liability arising in respect of goods held in stock, inputs contained in semi-finished or finished goods, and capital goods or plant and machinery is properly discharged.
Under the current framework, the final return is furnished electronically in FORM GSTR-10. Rule 81 of the CGST Rules prescribes GSTR-10 as the form for furnishing the final return.
Section 45 should be understood together with Section 29, which deals with cancellation of registration, particularly Section 29(5), and Rule 81, which prescribes the final-return form and procedure.
The final return is different from the annual return under Section 44. GSTR-9 is a year-wise annual compliance return, whereas GSTR-10 is associated with the cancellation of a GST registration.
What Is Section 45 of the CGST Act?
Section 45 is titled:
“Final return.”
The provision requires a registered person whose registration has been cancelled to furnish a final return within the prescribed period.
The final return is intended to close the taxpayer’s GST compliance position following cancellation of registration.
The statutory framework therefore follows this broad sequence:
GST registration → business activity → cancellation of registration → determination of closing GST liabilities → final return in GSTR-10
The final return does not itself cancel the GST registration. Cancellation takes place through the applicable cancellation process under Section 29 and the CGST Rules.
Instead, GSTR-10 is a compliance step that follows cancellation.
Who Is Required to File the Final Return?
The basic requirement applies to a registered person whose registration has been cancelled and who is required to furnish the relevant return under Section 39.
However, Section 45 excludes certain categories of taxpayers from this requirement.
The excluded categories include:
- an Input Service Distributor;
- a non-resident taxable person;
- a person paying tax under Section 10; and
- a person paying tax under Section 51 or Section 52.
Thus, the final-return requirement should not simply be described as applying to every person who ever held a GST registration.
The taxpayer’s category must first be examined.
An official GST Council FAQ similarly explains that Section 45 requires the specified registered person whose registration has been cancelled to furnish FORM GSTR-10, while identifying the relevant excluded categories.
What Is FORM GSTR-10?
FORM GSTR-10 is the prescribed form for furnishing the final return under Section 45.
Rule 81 states that every registered person required to furnish a final return under Section 45 shall furnish it electronically in FORM GSTR-10 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.
The form captures important information relating to the taxpayer and the closing stock and capital goods held at the time of cancellation.
The original notified GSTR-10 format includes information such as:
- GSTIN;
- legal name;
- trade name;
- address for future correspondence;
- effective date of cancellation;
- cancellation-order reference number;
- date of cancellation order; and
- details of inputs and capital goods on which ITC is required to be reversed and paid to the Government.
Due Date for GSTR-10
Section 45 provides that the final return must be furnished within three months of the date of cancellation or the date of cancellation order, whichever is later.
This distinction is important.
The relevant period is not simply calculated from the date on which the taxpayer stopped doing business.
The taxpayer must consider:
- the effective date of cancellation; and
- the date of the cancellation order.
The later of these two dates is used for determining the three-month period.
For example, suppose:
- Effective date of cancellation: 10 April
- Cancellation order date: 25 April
The later date is 25 April.
The three-month period is therefore calculated from 25 April.
The GST Council has specifically described the Section 45 requirement in these terms.
Example of the Three-Month Rule
Consider a business whose GST registration is cancelled.
Suppose:
Effective date of cancellation: 15 June 2026
Cancellation order date: 25 June 2026
The later date is:
25 June 2026
Therefore, the final return is required within three months from that date, subject to the applicable statutory rules and any extension or special relief notified by the Government.
The taxpayer should therefore preserve the cancellation order and verify both dates before calculating the filing deadline.
Why Is a Final Return Required?
Cancellation of GST registration does not automatically mean that every GST liability has disappeared.
A taxpayer may still have:
- goods in stock;
- inputs in stock;
- inputs contained in semi-finished goods;
- inputs contained in finished goods;
- capital goods;
- plant and machinery;
- output tax liabilities;
- tax relating to earlier transactions; or
- other amounts payable under the GST law.
Section 29(5) specifically deals with the amount payable in respect of stock and capital goods at the time of cancellation.
The final return provides a mechanism through which the taxpayer can report the relevant information and discharge the applicable liability.
An official GST Council FAQ explains that the final return is connected with ensuring discharge of liability under Section 29(5).
Section 45 and Section 29(5)
Section 45 should be read together with Section 29(5).
Section 29 deals with cancellation or surrender of registration.
Section 29(5) provides for payment of an amount relating to:
- inputs in stock;
- inputs contained in semi-finished goods;
- inputs contained in finished goods; and
- capital goods or plant and machinery,
where the registration is cancelled.
The amount is determined according to the statutory mechanism applicable to the relevant goods and capital assets.
Therefore:
Section 29(5) → determines the liability
Section 45 → requires the final return
Rule 81 → prescribes GSTR-10
This relationship is important for understanding the purpose of the final return.
What Information Is Reported in GSTR-10?
The GSTR-10 form requires information concerning the taxpayer and the goods or assets on which the applicable ITC reversal/payment is required.
The prescribed form includes details relating to:
1. GSTIN
The GST identification number of the cancelled registration is reported.
2. Legal Name
The legal name associated with the GST registration is provided.
3. Trade Name
Where applicable, the taxpayer’s trade name is provided.
4. Address for Future Correspondence
The form captures an address at which future communication can be made.
5. Effective Date of Cancellation
The effective date of cancellation is reported.
6. Cancellation Order Details
The reference number and date of the cancellation order are included.
7. Details of Stock and Capital Goods
The form requires relevant details of:
- inputs held in stock;
- inputs contained in semi-finished goods;
- inputs contained in finished goods; and
- capital goods or plant and machinery.
The notified GSTR-10 format specifically contains columns for invoice or bill-of-entry details, description, quantity, value and applicable ITC/tax payable.
Stock on the Date of Cancellation
One of the most important practical aspects of GSTR-10 is the treatment of stock.
Suppose a taxpayer cancels its GST registration while holding goods purchased for business purposes.
Those goods may contain input tax credit that was previously availed.
At cancellation, the taxpayer has to determine the amount payable under Section 29(5) and report the relevant information in the final return.
The taxpayer therefore needs accurate stock records as of the relevant cancellation date.
Inputs Held in Stock
Inputs remaining in stock at the time of cancellation can be relevant to the Section 29(5) calculation.
For example, suppose a registered trader purchased goods on which eligible ITC was availed and later cancelled its GST registration while some of those goods remained unsold.
The taxpayer needs to identify the relevant stock and determine the applicable amount under the GST law.
The GSTR-10 format provides for reporting of such inputs.
Inputs Contained in Semi-Finished Goods
A manufacturer may not hold all inputs separately.
Some inputs may already have been consumed in manufacturing and may be present in semi-finished goods.
The prescribed GSTR-10 format therefore separately recognises:
inputs contained in semi-finished goods held in stock.
This is particularly relevant for manufacturing businesses.
Inputs Contained in Finished Goods
Similarly, inputs may have been incorporated into finished goods that remain in stock when registration is cancelled.
The taxpayer needs to account for these goods under the applicable Section 29(5) mechanism.
The GSTR-10 form specifically provides for reporting of inputs contained in finished goods held in stock.
Capital Goods and Plant and Machinery
The final-return framework also covers capital goods and plant and machinery.
Examples include:
- machinery;
- production equipment;
- certain business-use equipment;
- other capital assets on which ITC was availed.
The amount payable in respect of capital goods is determined under the applicable provisions, and the relevant information is reported in GSTR-10.
The notified GSTR-10 form specifically contains a separate category for capital goods/plant and machinery.
How Is the Amount Determined?
The statutory framework under Section 29(5) requires the taxpayer to determine the amount payable in relation to the relevant stock and capital goods.
Broadly, the amount associated with inputs and goods is determined based on the applicable input tax credit attributable to the stock, while the treatment of capital goods follows the specific statutory mechanism applicable to them.
The final-return form itself refers to:
“Input tax credit/Tax payable (whichever is higher)”
for the relevant stock and capital-goods reporting.
The taxpayer should therefore maintain supporting documents and calculations rather than entering an arbitrary amount in GSTR-10.
Example: Stock Held at Cancellation
Suppose a trader has the following stock when registration is cancelled:
- Goods purchased with ITC: ₹2,00,000
- Applicable ITC attributable to the relevant stock: ₹36,000
The taxpayer must determine the amount payable according to the applicable Section 29(5) provisions and report the relevant details in GSTR-10.
The exact liability should be calculated using the statutory method applicable to the taxpayer’s goods, tax rate and records.
The example demonstrates why stock reconciliation is an important part of final-return preparation.
Example: Capital Goods
Suppose a business purchased machinery and availed input tax credit.
The business later cancels its GST registration while the machinery remains in its possession.
The taxpayer must examine the applicable Section 29(5) mechanism for capital goods and determine the amount payable.
The relevant details are then reported in GSTR-10.
The calculation should be supported by:
- original invoice;
- date of purchase;
- tax amount;
- ITC availed;
- period of use;
- relevant depreciation or statutory calculation, where applicable; and
- other required records.
Is GSTR-10 the Same as GSTR-9?
No.
Although both are associated with GST reporting, they serve completely different purposes.
| Particular | GSTR-9 | GSTR-10 |
|---|---|---|
| Purpose | Annual return | Final return after cancellation |
| Relevant provision | Section 44 | Section 45 |
| Trigger | Financial year | Cancellation of registration |
| Period | Financial year | Closing/cancellation stage |
| Main focus | Annual consolidation and reconciliation | Closing GST compliance after cancellation |
| Form | GSTR-9 | GSTR-10 |
| Filing deadline | Generally 31 December following FY, subject to applicable rules/exemptions | Three months from later of cancellation date or cancellation-order date |
GSTR-9 should therefore not be confused with GSTR-10.
Is GSTR-10 the Same as the Last GSTR-3B?
No.
The taxpayer may still have periodic return obligations relating to the period before cancellation.
GSTR-10 is an additional final-return requirement where Section 45 applies.
A taxpayer cannot simply assume that filing the last GSTR-3B automatically satisfies the final-return requirement.
The GST Council has expressly treated GSTR-10 as a separate final return under Section 45.
Cancellation of Registration Does Not Erase Tax Liability
An important principle is that cancellation of GST registration does not eliminate liabilities that arose before cancellation.
Cancellation ends or changes the registration status, but it does not provide a general waiver of outstanding GST liabilities.
The GST Council’s official FAQ specifically states that cancellation of registration does not affect the taxpayer’s liability to pay dues under GST, regardless of whether those dues were determined before or after cancellation.
Therefore, a taxpayer should not assume:
“GST registration cancelled = all GST liability finished.”
That is incorrect.
The taxpayer may remain liable for:
- tax;
- interest;
- penalty;
- late fees;
- liabilities determined later; and
- other amounts payable under the GST law.
What Happens If GSTR-10 Is Not Filed?
Failure to furnish GSTR-10 within the prescribed time can result in compliance action.
The GST framework provides for a notice to a return defaulter.
The GST Council’s official FAQ explains the process for failure to file the final return:
- A notice in FORM GSTR-3A may be issued.
- The taxpayer is required to furnish the final return within the period specified in the notice.
- If the taxpayer continues to default, the proper officer may determine liability on a best-judgment basis under Section 62, based on available information.
- The relevant order is issued in FORM GST ASMT-13.
- If the taxpayer subsequently furnishes the final return within the prescribed period after the order, the order may be deemed to be withdrawn according to the applicable provisions.
This makes timely filing of GSTR-10 important.
FORM GSTR-3A and Final Return Default
FORM GSTR-3A is a notice to a registered person who has failed to furnish a required return.
The GST framework recognises Section 45 final-return defaults within this mechanism.
A taxpayer should therefore not ignore a GSTR-3A notice relating to GSTR-10.
Instead, the taxpayer should:
- verify the cancellation details;
- identify the pending final return;
- prepare the stock and capital-goods calculations;
- discharge applicable liability; and
- file GSTR-10 within the permitted period.
Best-Judgment Assessment Under Section 62
If the taxpayer does not respond to the final-return default notice, the proper officer may determine the taxpayer’s liability using the best-judgment assessment provisions.
The official GST Council FAQ explains that where GSTR-10 is not filed after the relevant notice, an assessment order in FORM GST ASMT-13 may be issued under Section 62 read with Rule 100 to determine liability under Section 29(5), based on information available to the proper officer.
This is a significant consequence of continued non-compliance.
What Happens If the Taxpayer Files GSTR-10 After the Assessment Order?
The GST Council FAQ states that if the taxpayer files the final return within 30 days from the date of service of the FORM GST ASMT-13 order, the assessment order is deemed to be withdrawn.
This does not mean taxpayers should intentionally delay filing.
The proper approach is to file GSTR-10 within the original statutory deadline and avoid assessment proceedings.
Late Fee for GSTR-10
Section 47 provides for late fees for specified GST return defaults.
For final returns under Section 45, the statutory late fee provision is relevant.
The GST Council’s records explain that the late fee for delayed GSTR-10 was ₹100 per day under CGST and ₹100 per day under the corresponding State/UT GST law, subject to the applicable maximum of ₹5,000 under the respective tax. This results in a combined maximum of ₹10,000 where both components apply.
The taxpayer should always check the applicable statutory provisions and any specific waiver or relaxation notified for the relevant period.
Practical Example of GSTR-10 Compliance
Consider a business that stops operations and applies for cancellation.
The GST registration is cancelled with:
Effective cancellation date: 1 August 2026
Cancellation order date: 10 August 2026
The later date is:
10 August 2026
The taxpayer must therefore calculate the three-month filing period from 10 August 2026.
Before filing GSTR-10, the taxpayer should:
- identify all stock held on the relevant date;
- identify inputs contained in semi-finished goods;
- identify inputs contained in finished goods;
- identify capital goods and plant and machinery;
- obtain relevant purchase invoices;
- determine the applicable ITC/tax liability under Section 29(5);
- reconcile the amounts with the electronic ledgers;
- discharge the applicable liability; and
- file FORM GSTR-10 electronically.
Documents and Records to Keep Ready
A taxpayer preparing GSTR-10 should maintain supporting documentation.
Important records can include:
Purchase Invoices
Invoices help establish:
- purchase value;
- GST charged;
- ITC availed; and
- relevant dates.
Stock Statement
A closing-stock statement helps identify the quantity and value of goods remaining at cancellation.
Fixed Asset Register
This helps identify capital goods and plant and machinery on which ITC was availed.
ITC Records
The taxpayer should reconcile the relevant ITC with the electronic credit ledger and accounting records.
Cancellation Order
The cancellation order is important for determining the filing deadline and completing the relevant GSTR-10 fields.
GST Returns
Previous GSTR-1 and GSTR-3B filings may be required for reconciliation and verification.
Common Mistakes While Filing GSTR-10
Mistake 1: Assuming Cancellation Ends All GST Compliance
Cancellation does not automatically eliminate outstanding GST liabilities.
Mistake 2: Ignoring Stock
The taxpayer should carefully determine the stock position relevant to Section 29(5).
Mistake 3: Ignoring Capital Goods
Capital goods and plant and machinery can also be relevant to the final-return calculation.
Mistake 4: Calculating the Due Date From the Wrong Date
The three-month period is calculated from the later of the date of cancellation or the date of the cancellation order.
Mistake 5: Treating GSTR-10 as GSTR-9
GSTR-10 is the final return after cancellation, while GSTR-9 is the annual return.
Mistake 6: Assuming the Last GSTR-3B Is Enough
GSTR-10 is a separate compliance requirement where Section 45 applies.
Mistake 7: Ignoring a GSTR-3A Notice
Failure to respond can lead to best-judgment assessment under Section 62.
Mistake 8: Not Keeping Supporting Documents
The stock and ITC calculations reported in GSTR-10 should be supported by appropriate records.
Section 45 and Different Types of Cancellation
GST registration may be cancelled for different reasons.
For example:
- taxpayer voluntarily applies for cancellation;
- business is discontinued;
- business is transferred;
- taxpayer ceases to be liable for registration;
- registration is cancelled by the proper officer under Section 29.
The reason for cancellation does not by itself eliminate the final-return requirement where Section 45 applies.
The taxpayer should therefore check the cancellation order and determine whether GSTR-10 is required.
Voluntary Cancellation and GSTR-10
Where a taxpayer voluntarily applies for cancellation and the registration is subsequently cancelled, the final-return obligation can arise under Section 45.
The taxpayer should not consider the cancellation application itself to be the final return.
The process is broadly:
Application for cancellation → Cancellation order → Final return GSTR-10
The final-return deadline is then determined under Section 45.
Cancellation by the Tax Officer and GSTR-10
If the proper officer cancels a registration, the taxpayer may also become liable to furnish the final return, provided the taxpayer falls within the categories covered by Section 45.
The cancellation order becomes particularly important because it determines the relevant cancellation details and assists in calculating the final-return deadline.
Final Return Does Not Prevent Later Proceedings
Filing GSTR-10 does not create a blanket immunity from future GST proceedings.
If the taxpayer had unpaid tax or other liabilities, the Government can take action under the applicable provisions.
Similarly, cancellation of registration does not prevent the proper officer from determining liabilities relating to earlier periods.
The GST Council’s official FAQ specifically confirms that cancellation does not affect liability for dues under the GST law.
Therefore, GSTR-10 should be viewed as a final-return compliance requirement, not as a complete discharge from every possible GST proceeding.
Section 45 vs Section 44
The distinction between these provisions is important.
| Particular | Section 44 | Section 45 |
|---|---|---|
| Subject | Annual return | Final return |
| Main form | GSTR-9, where applicable | GSTR-10 |
| Trigger | End of financial year | Cancellation of registration |
| Filing period | Annual | One final filing after cancellation |
| Main purpose | Annual consolidation and reconciliation | Closing compliance after cancellation |
| Stock/capital goods at cancellation | Not its primary purpose | Important because of Section 29(5) |
| Due date | Generally 31 December following FY | Three months from later of cancellation date/order date |
A taxpayer may encounter both provisions during its GST lifecycle, but they address different compliance events.
Section 45 and Section 47
Section 47 deals with late fees for certain GST filing defaults.
Because Section 45 creates a final-return obligation, failure to furnish GSTR-10 within the prescribed time can attract the applicable late fee.
The GST Council has discussed the specific late-fee treatment for GSTR-10 and noted the ₹100-per-day CGST and corresponding SGST/UTGST framework, subject to the prescribed maximum.
Section 45 and Section 46
Section 46 deals with notices to persons who fail to furnish returns.
Therefore, where a taxpayer does not furnish GSTR-10, the GST authorities can initiate the prescribed notice procedure.
This creates a compliance chain:
Section 45 → final-return obligation
Section 47 → late fee
Section 46 → notice to return defaulter
Section 62 → possible best-judgment assessment in applicable circumstances
This illustrates why GSTR-10 should not be ignored after cancellation.
Current Practical Checklist for GSTR-10
Before filing the final return, a taxpayer should check:
- GST registration cancellation order;
- effective date of cancellation;
- date of cancellation order;
- GSTR-10 due date;
- stock of inputs;
- inputs contained in semi-finished goods;
- inputs contained in finished goods;
- capital goods and plant and machinery;
- purchase invoices;
- ITC availed;
- Section 29(5) calculation;
- tax/ITC amount payable;
- electronic credit ledger;
- electronic cash ledger;
- outstanding GST liabilities;
- previous GST returns;
- applicable late fee, if any; and
- final GSTR-10 filing status.
Key Points to Remember
The important points regarding Section 45 are:
- Section 45 deals with the final return under GST.
- It applies after cancellation of a covered GST registration.
- The final return is furnished in FORM GSTR-10.
- Rule 81 prescribes GSTR-10 as the final-return form.
- The final return is generally due within three months from the later of the date of cancellation or the date of the cancellation order.
- Input Service Distributors are excluded.
- Non-resident taxable persons are excluded.
- Persons paying tax under Section 10 are excluded.
- Persons paying tax under Section 51 are excluded.
- Persons paying tax under Section 52 are excluded.
- GSTR-10 is closely connected with the liability under Section 29(5).
- Stock of inputs can be relevant to the final-return calculation.
- Inputs contained in semi-finished goods can be relevant.
- Inputs contained in finished goods can be relevant.
- Capital goods and plant and machinery can also be relevant.
- The GSTR-10 form requires details supporting the applicable reversal/payment.
- Cancellation of registration does not automatically extinguish outstanding GST liabilities.
- GSTR-10 is different from GSTR-9.
- GSTR-10 is also different from the taxpayer’s last GSTR-3B.
- Failure to file can lead to a notice in FORM GSTR-3A.
- Continued non-compliance can result in best-judgment assessment under Section 62 in the circumstances prescribed.
- The proper officer may determine liability based on available information.
- Filing the final return within the prescribed period after an ASMT-13 order can result in the order being deemed withdrawn according to the applicable provisions.
- Late filing can attract the applicable late fee under Section 47.
- The taxpayer should retain supporting records for the stock and capital-goods calculations.
- The cancellation order should be checked carefully before calculating the GSTR-10 due date.
Conclusion
Section 45 of the CGST Act provides the statutory framework for the final return after cancellation of GST registration. Unlike the annual return under Section 44, the final return is triggered by cancellation of registration and is intended to complete the taxpayer’s GST compliance at the closing stage.
The prescribed form for this purpose is FORM GSTR-10, which is required to be furnished electronically under Rule 81.
The final return is particularly important because cancellation of registration does not automatically remove liabilities that arose under GST. Section 29(5) requires the taxpayer to account for the applicable amount relating to inputs in stock, inputs contained in semi-finished or finished goods, and capital goods or plant and machinery. The GSTR-10 format captures the information required for this purpose.
The filing deadline is generally three months from the later of the date of cancellation or the date of the cancellation order. A taxpayer should therefore carefully check the cancellation order and calculate the due date accordingly.
Failure to furnish GSTR-10 can result in a notice to the return defaulter and, if the default continues, a best-judgment assessment under Section 62 based on the information available to the proper officer.
For this reason, GSTR-10 should not be treated as a form that can simply be ignored after GST registration is cancelled. A proper closing reconciliation of stock, capital goods, input tax credit and outstanding liabilities is important before filing the final return.
In simple terms:
Section 45 creates the final-return obligation, Section 29(5) determines the relevant closing liability, and Rule 81 provides FORM GSTR-10 for furnishing the final return.
Frequently Asked Questions
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
Why Choose Sarkari Bakery?
Official Information
Government schemes & banking information based on official sources.
Step-by-Step Guides
Simple application process explained for every service.
Regular Updates
Content updated whenever official rules or services change.
People-First Content
Helpful, transparent and user-focused content.
Pingback: Section 44 – Annual Return - Sarkari Bakery