The Goods and Services Tax has been continuously evolving since its implementation. The improved revenue and the growth in registered members are proof of the success of the GST regime. Filing the annual return in Form GSTR-9 is a significant part of compliance in GST. The annual return is a consolidation of the periodic returns that cannot be modified once they are submitted.
Purpose of GSTR-9
GSTR-9 provides an opportunity for taxpayers to rectify the errors or omissions made in GSTR-1 or GSTR-3B. The government has introduced many amendments and refinements to simplify filing GSTR-9 and make compliance easier for taxpayers. Here we discuss the important amendments and revisions in GSTR-9 that have helped taxpayers file their annual returns.
All registered persons except for a few specified categories of persons are required to file the annual return GSTR-9 for every financial year. One of the important aspects of GST is the self-assessment routine in which the registered person has to compute and declare his monthly tax liability by filing GSTR-3B and paying the taxes online. But if the registered person has opted for the composition scheme, he has to pay taxes monthly and file a simplified quarterly return.
Read more: Applicability and exemptions for GSTR-9
To ensure the correctness and accuracy of the reported information in the returns submitted during the year, the annual return GSTR-9 has to be filed to collate the data and ensure accuracy. Filing the annual return is considered the final stage, and the particulars submitted in this return are taken up for further processing by the tax department for assessment and audit.
Matching GSTR-9, GSTR-3B and GSTR-1
As we know, GSTR-1 is a periodic return with details of outward supplies, while GSTR-3B is a periodic return with summarized data of all inward and outward transactions and payment of tax. Ideally, the values in GSTR-1, GSTR-3B, and the books of accounts and records of the taxpayer as prescribed in Section 35 of the CGST Act should match. If they do not match, reconciliation must be done to determine the cause of the mismatch, and steps must be taken to rectify the same. No new information can be provided in the annual return. The information already furnished in Form GSTR-1 and Form GSTR-3B is consolidated with rectifications wherever required and submitted for verification by the GST authorities.
Maintenance of books of account
Section 35(1) of the CGST Act, read with Rule 56, specifies the maintenance of accounts and other records. Correct maintenance of the books of accounts helps in the reconciliation and accurate filing of the annual returns. Therefore, it is important to maintain accurate records of all the financial transactions related to the business.
Also read: Understanding the Components of GSTR-9
Amendments: filing of annual return in form GSTR-9
The central government made it optional for small taxpayers whose aggregate turnover in the financial year is up to Rs. 2 crore to file the GSTR-9 annual return as per Notification No. 47/2019-Central Tax dated October 9, 2019 and 77/2020-Central Tax dated October 15, 2020 for the financial years 2017-18, 2018-19, and 2019-20. But subsequent notifications exempted the registered taxpayers whose aggregate turnover in the financial year is up to 2 crores for FY 2020–21, 2021–22, and 2022–23 from filing the annual return.
Furnishing annual return in Form GSTR-9
- An amendment to Section 44 with regard to the annual return was made effective from 01-10-23, according to which:
- Every registered person other than a casual taxable person, an input service distributor, and a non-resident taxable person whose annual aggregate turnover is above 5 crore rupees in a financial year should furnish a self-certified reconciliation statement as specified under Section 44 in Form GSTR-9C along with the annual return on or before the 31st of December following the end of such financial year, electronically through the common portal or through a notified facilitation center.
- Under Section 144 of the Finance Act, 2023, a new provision under Section 44(2) was inserted that restricts filing of annual returns for a financial year after the expiry of three years from the due date of furnishing the said annual return.
- As per notification no. 47/2019-Central Tax dated 09.10.2019 and 77/2020-Central Tax dated 15.10.2020, filing an annual return in form GSTR-9 from the financial year 2020-21 onwards is exempt for small taxpayers provided the aggregate annual turnover of the business is up to 2 crore rupees.
Consequences of late filing and non-filing of return
- Late fee for delayed filing: Section 47(2) of the CGST Act states that a late fee of Rs. 200 per day (CGST Rs. 100 and SGST Rs. 100) for delay in filing the annual return in Form GSTR-9 is subject to a maximum of a quarter percent of the turnover of the business in the financial year.
- Notice to defaulters: Section 46 of the CGST Act provides that when a registered person fails to file the annual return in Form GSTR-9, a notice shall be issued that requires him to furnish the returns within fifteen days.
- Other penalties: As per Section 125 of the CGST Act, the penalty for willful default, fraud, etc., is Rs. 25000/-each under CGST, and SGST is applicable for further legal proceedings.
Amendment in Late Fees
There has been a modification of the above fees as per notification no. 07/2023-Central Tax dated March 31, 2023, for filing the annual return in Form GSTR-9. From FY 2022–23 onwards, if the registered person has aggregate turnover in the relevant financial year,
- Up to 5 crore rupees-late fee of Rs. 50/- per day (CGST Rs. 25/- and SGST Rs. 25/-) with a maximum of 0.04% of turnover
- More than 5 crore rupees but less than 20 crore rupees: Rs. 100 per day (CGST Rs. 50 and SGST Rs. 50), with a maximum of 0.04% of turnover.
Provision of summary statements in GST portal
To make it easier for the taxpayers, GSTN introduced the provision of summary statements of the important returns. The taxpayer can download the system-computed summary of Forms GSTR-9, GSTR-1, and GSTR-3B. This downloaded summary is a consolidation of monthly returns; the consolidated values of taxable liabilities paid by adjusting ITC and through cash are displayed. As well as other details like reverse charge liability, HSN-wise details of outward supplies, etc., as per the monthly returns filed, in the annual return, the auto-populated fields are editable except Tables 6A, 8A, and 9.
The benefit of editing the system-calculated Form GSTR-9 is that it allows the taxpayer to enter the actual values of supplies, tax paid, etc., as per the books of account. This helps them to correct the values and pay any additional liability for the reporting financial year form in GST DRC-03 through the electronic cash ledger. This helps in ensuring accurate filing of the GSTR-9 annual return and avoiding notices and other legal consequences.
Reconciliation of GSTR-9 with GSTR-1 and GSTR-3B
As per GST rules, ideally the information in GSTR-1, GSTR-3B, and the books of account of the taxpayer should match. The mismatch can be due to two reasons. One, the tax was not paid to the government; two, the tax was paid in excess. In the former case, the shortage can be declared in the annual return and paid, and in the latter case, after declaring all the information in the annual return, a refund can be applied through Form GST RFD-01A.
As per Notification No. 18/2022-Central Tax dated September 28, 2022, from the financial year 2021–22 onwards, rectification of any omissions or errors in Form GSTR-3B or GSTR-1 of the financial year shall be allowed in the relevant return furnished up to November 30th of the next financial year or the date of furnishing the annual return, whichever is earlier.
Input tax credit eligibility
In an advisory dated August 18, 2020, GSTN enabled taxpayers to know their input tax credit eligibility at the invoice level while filing the annual return GSTR-9. The taxpayers can download the details of invoices that are eligible for ITC in Table 8A of the Form GSTR-9 annual return. They can find the reasons for the non-inclusion of an invoice in the ITC value. This download option is a great help for the taxpayers, as they will now be able to know their ITC at the invoice level and reconcile the values that are displayed in table 8A of Form GTR-9 while filing the annual return. After reconciliation of the input tax credit, if any difference in tax liability arises, the taxpayer can pay the same through Form DRC-03. A refund, if eligible, can be claimed through Form GST DRC RFD-01A. The input tax credit cannot be reversed or availed through Form GSTR-9. The reversal of input tax credit, if any, can be done through Form GST DRC-03 separately.
Another important amendment was made with regard to the export of goods. However, CBIC, vide Notification No. 16/2020-C.T. dated March 23, 2020, inserted Rule 96B of the CGST Rules, which provides for the recovery of refunds of unutilized ITC or IGST paid on the export of goods where export proceeds are not realized.
Amendments and revisions in GSTR-9 give the taxpayer an opportunity to rectify the discrepancies due to mismatches in the returns filed during the financial year. The government has been constantly striving to ease the process of compliance for taxpayers. Auto-population of important tables in GSTR-9, the requirement to co-relate the information in GSTR-3B, GSTR-2A, and GSTR-9, and steps to ensure uniformity in reporting ineligible ITC and reversals of ITC in GSTR-3B are the major steps taken to ease the burden of return filing, accurate computation of ITC, and tax payment under the GST regime. There are still many challenges that taxpayers face, and more needs to be done to make the annual return filing process user-friendly and economical for taxpayers.
Frequently asked questions
Can the Annul return GSTR-9 be revised or modified?
Answer: GSTR-9 is an annual return, is a final return, and cannot be revised after it is filed. Hence, accuracy in the values reported and classification must be ensured by the filer.
Is it mandatory to report the HSN code while filing the annual return?
Answer: As per notification no. 14/2022 – Central Tax dated 05.07.2022, CBIC, it is mandatory to report HSN code at six-digit level for taxpayers having an annual turnover above 5 crore rupees in the preceding financial year. B2B suppliers with an annual turnover of up to 5 crore rupees must report the HSN code at the four-digit level.