Synopsis of Provision for GST Annual Return and GST Audit: (9 Questions for GSTR9 and 9C) :

Ever since GST implemented from 01^st July 2017 there were several rumours and anticipation for GST Annual return and reconciliation of GST Annual return with GST Audit.

Government has through Notification number 39/2018-CT dated 04.09.2018 and Notification number 49/2018 -CT dated 13.09.2018 have notified GSTR 9 & 9A (GST Annual Return for Regular & Composite dealer) and GSTR 9C (GST Audit Form), respectively.

Synopsis of Provision for GST Annual Return and GST Audit

Lets see provisions in question & answer form related to GST Annual Return and GST Audit to understand better:

Question 1: What are legal provisions for GST Annual return and GST Audit

Answer: – Legal requirement of filing GST Annual return hereafter called GSTR9 is governed by section 35(5) and section 44(1) of CGST Act. Section 44(1) of CGST Act read with Rule 80(1) of CGST Rules requires that every Registered person other than

– an Input Service Distributor,

– a person paying tax under section 51 (TDS) or section 52 (TCS),

– a casual taxable person and

– a non-resident taxable person,

Shall furnish an GST annual return for every financial year electronically in Form GSTR9 on or before the thirty-first day of December following the end of such financial year.

Further, as per section 35(5) of CGST Act, every registered person whose turnover during a financial year exceeds the prescribed limit (Rs. 2 cr.) shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement (GSTR9C) under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed. Reconciliation statement GSTR9C is reconciliation of data as per books of accounts and data as reported in GSTR9.

Question 2: Whether transactions for the period April-17 to June-17 are also to be included in GSTR9 for FY 2017-18

Answer: – No, instructions forming part of GSTR9 which was notified by Notification No. 39/2018 dated 04th September 2018, clearly mentions that only details for the period July 2017 to March 2018 are to be provided in GSTR9.

Question 3: If a Taxpayer has obtained more than one GST Registration even though he has a single PAN, then whether GSTR9 is to be filed at Entity level or GSTIN wise

Answer: – As per Legal provision of Section 44(1) of CGST Act, every registered person shall be required to file GSTR9. Hence, if a Taxpayer has obtained multiple GST Registrations whether in one state or more than one state, it shall be treated as a distinct person in respect of each such registration as per section 25(4) of CGST Act. Hence, GSTR9 is required to be filed separately for each such GSTIN.

Question 4: What is the difference between GSTR9 and GSTR9C

Answer: – As per section 35(5) of CGST Act, every registered person whose turnover during the financial year exceeds prescribed limit (Rs. 2 cr.) shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 which is called GSTR9C and such other documents in such form and manner as may be prescribed. Hence, requirement of GST Audit u/s 35(5) would arise only if prescribed limit of turnover exceeds Rs. 2 cr. and certified reconciliation statement -GSTR9C shall require to be submitted.

On the other hand, GSTR9 is a GST Annual return which is required to be filed by every registered person irrespective of threshold limit of turnover.

Question 5: Whether Turnover of 2 Cr. For GST Audit would be for 9 months or Full Financial year

Answer: – For the FY 2017-18, the GST period comprises of 9 months whereas the relevant section 35(5) uses the expression Financial Year; Therefore, in the absence of clarification from Government, also to avoid any cases of default, it is reasonable to understand that reckon the turnover limits prescribed for audit i.e. 2 Cr. One has to reckon the turnover for the whole of the Financial Year which would include the first quarter of FY 2017-18.

Question 6: What will be source of information for filling up GSTR9

Answer: – GSTR9 is merely a compilation of data filed in GSTR3B and GSTR1. As per the instructions of the form GSTR9, it is stated that information of outward supplies may be derived from Form GSTR 1. Hence, so far as Outward supplies and tax payable in the GST annual return is concerned, the same are to be extracted from Form GSTR 1 only.

Inward supplies, input tax credit and the net tax paid in cash are to be gathered from Form GSTR 3B.

But before filing GSTR9, Value as per GSTR3B and GSTR1 must align. If there are any differences, then the same must be adjusted to subsequent returns filed up to September-18 as per circular 26/26/2017-GST dated 29th December 2017.

It seems that the inherent assumption that has been taken while drafting the form is that Form GSTR 3B and Form GSTR 1 are in consonance with each other which may not be always true.

In case the values as per Form GSTR 3B and GSTR 1 are not matching with each other, one may arrive at a differential value of tax payable and tax paid as per GST annual return. A clarification may be expected from the Government regarding the manner of payment of any additional liability (if any). However, if one faces such a situation, then the additional tax liability may be paid through Form GSTR 3B of the subsequent month/Form DRC-03.

Question 7: Whether GSTR9 can be revised

Answer: No such option has been provided in the law till now.

Question 8: How much late fee is payable for late filing of GSTR9

Answer: – As per section 47(2) of CGST Act, Late fee for belated filing of GSTR9 is Rs.100 per day subject to maximum of 0.25% of turnover in a state/UT. Similar provision is there in SGST Act also. Hence, in total there will be late fee of Rs.200 per day subject to 0.50% of turnover in a state on late filing of GSTR9.

Question 9: What are the consequences of the failure to file GSTR9

Answer: – If one fails to file GSTR9 then first late fees will be payable as discussed above. A notice may be issued u/s 46 requiring him to furnish such return within stipulated time.

Note: This article is for reference purpose only; this article shall have no legal implication. Views expressed in this article are strictly personal and are not bound by the law.

Mr Anand Tanna is a partner at Hemal Parikh & Co LLP, and Can be reached at, [email protected]

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