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Section 45 — Final Return

Picture this: Rajesh & Co. Pvt. Ltd. has been running for years, filing GST returns every month. Now, for whatever reason — maybe the business is shutting down, maybe turnover dropped below the threshold, maybe the owner wants to retire — the GST registration gets cancelled. Does the GST story end there? Not quite. There's one last return to file: the Final Return under Section 45.

The rule is simple. Any registered person who was required to file a regular return under Section 39(1) — that means normal taxpayers filing GSTR-3B — and whose registration has been cancelled, must file a Final Return. This return is filed in Form GSTR-10. The deadline? Within 3 months from whichever is later — the date of cancellation of registration OR the date of the cancellation order. Why two dates? Because sometimes you apply for cancellation on one date, but the officer passes the order weeks later. The law protects you by taking the later of the two.

Who is exempt from this? Taxpayers whose registration was cancelled because they voluntarily switched to the Composition Scheme are not required to file GSTR-10 — they have a different return mechanism. Also, if cancellation is revoked (i.e., restored), no final return is needed. The purpose of GSTR-10 is essentially a farewell filing — you declare your closing stock, pay any tax liability on inputs whose credit you took but didn't use, and settle all dues with the government before walking out. Miss this filing, and the department can issue a notice and eventually a best judgment assessment under Section 62. This is asked frequently as a 2 to 4 mark question — especially the 3-month timeline and the 'whichever is later' logic.

📊 Worked example

Example 1: Identifying the Due Date

Ms. Iyer applied for cancellation of her GST registration on 1st January 2025. The GST officer passed the cancellation order on 10th March 2025.

Working:

  • Date of application for cancellation: 1st January 2025
  • Date of cancellation order: 10th March 2025
  • Section 45 says: 3 months from the date of cancellation OR date of order, whichever is later
  • Later date = 10th March 2025
  • Due date for GSTR-10 = 10th March 2025 + 3 months = 10th June 2025

Final Answer: Ms. Iyer must file her Final Return (GSTR-10) by 10th June 2025.

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Example 2: Liability on Closing Stock

Mr. Sharma's registration was cancelled. On the date of cancellation, he had closing stock worth ₹5,00,000 on which he had claimed Input Tax Credit (ITC) of ₹45,000 (GST @ 9% CGST + 9% SGST). He has not used this ITC.

Working:

  • ITC availed on closing stock = ₹45,000
  • Since registration is cancelled, he must reverse this ITC in GSTR-10
  • Alternatively, he pays an amount equal to the ITC OR the tax on the transaction value of goods, whichever is higher
  • ITC to be reversed/paid = ₹45,000

Final Answer: Mr. Sharma must pay ₹45,000 as ITC reversal while filing GSTR-10.

⚠️ Common exam mistakes

  • Students confuse the 3-month clock start. Don't assume the clock starts from the date of application for cancellation — it starts from the later of the cancellation date or the order date. Always check both dates and pick the later one.
  • Mixing up the form number. Final Return is filed in GSTR-10, not GSTR-9 (that's the Annual Return). These two are commonly swapped in MCQs — memorise: Section 44 → GSTR-9, Section 45 → GSTR-10.
  • Assuming all cancelled registrations must file GSTR-10. Only those who were filing under Section 39(1) (normal scheme) need to file it. If someone migrated to the Composition Scheme (not outright cancellation), GSTR-10 is not required.
  • Ignoring ITC reversal on closing stock. Students often think GSTR-10 is just a 'nil' return. It isn't — if you have closing stock on which ITC was taken, you must reverse it or pay equivalent tax. Missing this in exam answers costs marks.
  • Forgetting consequences of non-filing. If GSTR-10 is not filed within the due date, the department issues a notice giving 15 days to comply. If still not filed, a best judgment assessment is made under Section 62. Mentioning this in a theory answer adds marks.
📖 Bare Act text — Section 45, CGST Act 2017 (click to expand)
Every registered person who is required to furnish a return under sub-section (1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed.
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