GST annual Return and Reconciliation Statement

GST Annual Return

The GST Annual return i.e. GSTR 9 is a return to be filed by the every taxpayer once a year which is summary of all monthly/quarterly returns (GSTR 1, GSTR 2A, GSTR-3B) filed for that year. It consists of details regarding the outward and inward supplies made/received during the relevant year, ITC availed and utilised, Refund claimed under different tax heads i.e. CGST, SGST & IGST.

Reconciliation Statement and GST Audit

GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.

Audit under GST involves examination of records, returns and other documents maintained by a registered person. It ensures correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and compliance with provisions of law. Till Year 2019-20, GST Audit was to conducted by CA/CMA. From year 2020-21, Government has amended the act and there is no need of audit to be done by CA/CMA. The taxpayer can himself self-certify the GSTR-9C i.e. Reconciliation Statement.

Applicability

GSTR 9 is to be filed by every registered taxpayer* except Composition Dealer, Casual Taxable Person, Input Service Distributor, Non Resident Taxable Person, taxpayer paying TDS u/s 51.

*As per decision taken in GST Council Meeting, For FY 17-18, 18-19, 19-20 and 20-21 if aggregate turnover of taxpayer is less than 2 Crores, then he need not file GSTR 9. In such cases, it shall be deemed that GSTR 9 has been filed with auto-populated figures, if not filed by taxpayer by due date and hence no late fees shall be levied.

GSTR-9C is to be filed by every registered taxpayer* except Composition Dealer (GSTR-9A is prescribed for them), Casual Taxable Person, Input Service Distributor, Non Resident Taxable Person, taxpayer paying TDS u/s 51.

*As per decision taken in GST Council Meeting, For FY 17-18, 18-19, 19-20 and 20-21 if aggregate turnover of taxpayer is less than 5 Crores, then he need not file GSTR-9C.

These limits for FY 20-21 have been simplified in following manner:

Aggregate Turnover	Up to 2 Crore	2 Crore to 5 crore	More than 5 crore
GSTR-9	Optional	Compulsory	Compulsory
GSTR-9C	NA	NA	Compulsory
GSTR-9B	For E-commerce operators.

Here, “Aggregate Turnover” includes aggregate value of taxable supplies, zero rated supply of goods or services or both, exempt supplies and interstate branch transfers under same PAN. It should be noted that Aggregate turnover excludes inwards supplies on which GST has been paid on RCM basis and it excludes outward GST liability too.

It is worthwhile to note that calculation of Aggregate turnover should be done on PAN basis. This simply means that if the aggregate turnover during financial year is more than prescribed limit and taxpayer has multiple branches then every branch is liable for the GST audit whether it individually reached the threshold limit or not.

Details required to be furnished for annual return and Reconciliation Statement

GST annual return and audit for any given financial year requires following details to be reported in prescribed forms by tax payers.  These details should be reported after due reconciliation of data reported in GST returns during the year and books of accounts. So that any errors reported earlier can be duly rectified:

1. Annual turnover including taxable turnover, exempted turnover, zero rated turnover during the year and output tax liability thereon.
2. Input tax credit available in books of accounts (whether availed or not in GST returns).
3. Details of ITC reversed during the year due to ineligibility of ITC or any other reasons.
4. Details of adjustments of turnover or ITC made in current financial year pertaining to previous applicable financial year. 
5. Details of refund applications filed, sanctioned and rejected during the financial year.

Due date of filing GSTR-9 and GSTR-9C

Financial Year	Due date
FY 2017-18	Group 1 states: 5th February, 2020Group 2 states: 7th February, 2020
FY 2018-19	31th January,  2021
FY 2019-20	31th March,  2021
FY 2020-21	31th December,  2021

Note: For effective and speedy filing of GST audit and annual return, government has prescribed due dates in staggering manner for FY 2017-18. According to this, various states and territories have been divided in two groups.  Taxpayers can identify their group according to their registered principal place of business.

1) 5th February 2020

Chandigarh, Delhi, Gujarat, Haryana, Jammu and Kashmir, Ladakh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand

2) 7th February 2020

Andaman and Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Dadra and Nagar Haveli and Daman and Diu, Goa, Himachal Pradesh,Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Telangana, Tripura, West Bengal and Other Territory

Late fee and Penalty

The late fees for not filing GSTR-9 within the due date is Rs.  200 (Rs. 100 under CGST Act and SGST Act each). This late fees is subject to maximum of 0.25% of aggregate turnover. 

For late filing and submission of GSTR-9C, No such late fees or penalties have been prescribed under the act.  Hence, general penalty of Rs.  25000 should be applicable.

Frequently Asked Questions

Q. What is the difference between GSTR-9 and GSTR-9C? A: GSTR-9 is annual return and it has to be filed by Taxpayer only. Whereas, GSTR-9C is reconciliation statement.  It reconciles GST turnover between Books of accounts and data reported in GSTR-9.

Q. Can I file GSTR-9C without filing GSTR-9? A:  No, GSTR-9C cannot be file without filing GSTR-9.

Q. Can GSTR-9 be revised? A: At present, such facility is not available on GST portal.

Q. I have less claimed input tax credit during filing of GSTR-3Bs of previous year.  Can I claim the same in annual return? A: No, you cannot claim ITC in Annual return. Reporting of ITC in annual return is just for government purpose.  It will not affect Electronic Credit Ledger.

Q. For the purpose of GST audit applicability for FY 17-18, should I consider Aggregate turnover from April 2017 to March 2018? A: No, the aggregate turnover for the purpose of GST should be reckoned for the period July 2017 to March 2018.

Q. Whether I am required to file GSTR-9 even though my registration stands cancelled on or before 31st March, 2018? A: As per the GST law, Taxpayer is required to file GSTR-9 because he was registered between July 2017 to March 2018.

Q. Does “Aggregate turnover” include Branch transfers under same PAN? A: Yes, It includes interstate stick transfers, Cross charges of services provided from one branch to another branch under same PAN.

Q. I have reconciled my GST returns and Books of accounts and there is excess claim of ITC/short reporting of outward supply in GST returns.  What should I do? A: In case you have claimed excess ITC or paid less GST during the year, then you have option to discharge your liability through FORM DRC-03 along with applicable interest thereon.

Q. Can additional liability of tax be discharged using Input tax credit lying in credit ledger? A. As per instructions and Press release issued from time to time, it has been instructed that Additional liability is to be discharged by payment in cash only.

Q. Is reporting of inward and outward HSN summary compulsory to file GSTR-9? A: Reporting of inward and outward HSN summary has been made optional for the purpose of filing GSTR-9 for FY 17-18, FY 18-19. & FY 19-20

Q. Can I file GSTR-9 even if I have not filed GSTR 3B and GSTR 1 for whole year? A: No, GSTR 9 cannot be filed unless and until you have filed GSTR 3B and GSTR 1 for whole year.