Annual return filing and compliance is the moral and social duty of every responsible Indian citizen. It helps the government determine the amount and means of expenditure of the citizens, allowing access to claim a refund and other reliefs from time to time.
The Indian government mandates that registered regular taxpayers earning a specified annual income must file a tax return within a pre-decided due date. The registered taxpayer must pay the tax, and failure to do so will invite penalties from the Income Tax department.
The annual return filing and compliance for registered regular taxpayers falls under GSTR 9 under India’s Goods and Services Tax (GST) regime. GSTR 9 is a consolidated return that summarizes the details of all GST returns filed by the registered taxpayer during a financial year.
The Income Tax regime also allows for conversion from a composite scheme to a regular taxpayer scheme for businesses that have outgrown their turnover threshold. Through this transition, taxpayers and businesses can benefit from the input tax credit, comply with the GST rules and regulations, and stay on the right side of the law.
Importance of timely and accurate annual return filing for regular taxpayers
GSTR 9 details the inward and outward supplies made and received during the relevant financial year under distinct tax heads like CGST, SGST, IGST, and HSN codes.
Even though the process of annual return filing for regular taxpayers seems complex, it helps in an extensive reconciliation of data for 100% transparency in disclosures.
It is important to file annual returns along with compliance for regular registered taxpayers as:
- It helps the taxpayers maintain accurate records of their GST transactions.
- Timely annual return filing enables the government to assess the tax liability and ensure taxpayers pay the correct amount of GST.
- It is a statutory requirement as per the GST laws in India. Registered taxpayers failing to file their GSTR 9 returns on time must pay late fees, interest, and additional penalties for non-compliance.
- Moreover, filing annual returns on time is important for businesses to maintain a positive standing with the government.
Additionally, annual return filing and compliance by registered regular taxpayers offers a comprehensive summary of the taxpayer’s GST liability plus transactions during the financial year. This provides transparency and ensures the government that the taxpayer has accurately reported their GST liability and claimed precise input tax credit.
Filing annual returns on time helps reconcile GST liability and input tax credit reported in the quarterly or monthly GST returns (GSTR 1, GSTR 2, GSTR 3) comprising the annual financial statements. This helps rectify and identify discrepancies with the GST returns filed during the particular financial year.
Understanding GST annual return filing procedures and deadlines
GSTR 9, the annual return filing for registered regular taxpayers, includes lots of GST data such as taxes paid, refunds, demands, etc. One can file the GSTR 9 if registered for at least one day in a financial year. However, it is important to file the GSTR 1 and 3B returns before filing the GSTR 9.
The procedure for annual return filing for registered regular taxpayers is as follows:
Begin by signing into the online GST portal and clicking on the Returns Dashboard option under which you will notice the option of Annual Returns. Proceed by clicking File Annual Returns and choose the relevant financial year for which you are filing the annual return. This displays an important message highlighting the steps of the online and offline GSTR 9 filing process. Fill out the questionnaire by opting for the online mode.
The questionnaire determines whether the applicant wants to file an NIL return for the financial year. Hence, select Yes or No for the same. You can select the option of Yes only if:
- The applicant doesn’t have a receipt for the goods and services
- Applicant has not made any outward supplies and has no liabilities to report
- The applicant has not claimed credits or filed any refund requests
- The applicant has not received any demand orders
- If no late fees are applicable in this case
When you choose Yes for filing NIL returns, the next step takes you to the calculation of liabilities to file NIL GSTR 9. On opting for No, the site will take you to a page titled GSTR 9 Annual Return for Normal Taxpayers. This page consists of multiple sections required to be filled with correct information.
The next step is to click on four tabs and download the GSTR 1 summary, and GSTR 3B summary. Along with GSTR 9 and Table 8A document details with respect to the system-generated summary. The downloaded summaries provide information about the details required for the sections. Make sure to input essential data into the tables for the relevant financial year.
Also ensure filing accurate details like inward and outward supplies, advances made during the relevant financial year on which tax liability exists and other sections. Click on the corresponding section and the system will auto-populate all details as per the details entered in GSTR 3B and GSTR 1. Moreover, it is important to edit all cells and enter the correct tax values.
Remember, if any of the figures vary within a + or – of 20% of the auto-populated data, these cells will be highlighted, asking for a confirmation message. Proceed by clicking Yes to confirm the details and the site will showcase a confirmation message of accepting the save request.
Return to the dashboard and repeat the same steps to fill all remaining sections.
Annual return filing also comprises details of the Input Tax Credit availed of during the relevant financial year. This includes ITC reverse and ineligible ITC. Additionally, details of outward supplies made during the relevant financial year do not have any tax liability.
Table 8(A) mentions other ITC-related information consisting of Tables 10,11,12,13,15,17,17 and 18. These tables mention differential tax paid toward the declaration, refunds and demands, and HSN-wise summary of inward, and outward supplies, etc.
The next step is to preview the GSTR 9 draft in Excel or PDF for which you can click on the Preview GTSR 9 PDF option and download the same. Review it and note the changes to be made. Follow the same step for the Excel format, except you will have to extract the summary from a Zip file.
Additionally, for the calculation of late fees and annual return filing liabilities, click on the Calculate Liabilities option on the GST website. This will process the details from multiple sections and compute late fees in case of delayed annual return filing.
You will notice a confirmation message, allowing you to proceed with the filing process. After this message, registered regular taxpayers can pay the annual return filing tax through funds in their electronic cash ledger.
In case of insufficient funds, an additional payment can be made via Netbanking or NEFT/RTGS using an additional payment challan.
Annual return filing is only possible once applicable late fees are paid.
Filing the annual return:
This is the final step wherein one has to select the declaration checkbox and choose “Authorized Signatory.”
Clicking “File GTSR 9” will showcase two options: File with DSC and File with EVC. In DSC, one can select the certificate and submit it with a signature. In EVC, an OTP will be sent to the registered mail and mobile number, validating the same changes the return status to filed.
Preparing and submitting annual returns as a registered regular taxpayer
Preparing and submitting annual returns as a registered regular taxpayer entails knowledge of basic yet important facts like filing GSTR 1 and GSTR 3B for the particular financial year before filing the annual return, as GSTR 9 is a compilation of data filed in GTSR 3B and GTSR 1.
Moreover, it is important to note that according to the information in GSTR 3B, table 6A will be auto-filled, and the same won’t be editable. The same goes for table 8A, which is auto-populated per GTSR 2A. Taking note of the non-editable aspects of annual return filing ensures no scope for error.
Table 9 consists of the details of tax paid as declared in returns filed during the financial year, which is auto-filled as per the details of GTSR 3B, wherein the paid through cash and paid through ITC columns are not editable.
Ensuring completeness and accuracy of data in annual returns
GSTR 9 is divided into 19 sections and 6 parts, wherein every part consists of details available from the previously filed returns and the books of accounts. It is important to ensure completeness and accuracy of data in annual returns as the data attracts tax liability, penalties, etc.
The data in annual return filing consists of annual sales divided into cases subject to tax and not subject to tax. As for the purchases, the annual value of inward supplies and ITC must be revealed thereon. Additionally, the complete data in annual returns consists of the purchases classified as input, capital goods, and services. The details of ITC required to be reversed owing to ineligibility are also to be entered.
Meeting compliance requirements and avoiding penalties for late filing
It is extremely important to meet compliance requirements like filing annual returns by all registered taxpayers by 31st December of the year following the specific financial year. Failure to do so results in penalties based on the turnover for imposing late fees for filing annual returns past the deadline.
The penalties for late filing of annual returns are as follows:
|Late fees per day
|Maximum threshold of late fee
|Up to 5 crores
|₹50 per day divided into ₹25 each under the SGST and CGST act
|0.04% of turnover in state or Union territory divided into 0.02% under SGST and CGST
|Over 5 crores and less than 20 crores
|₹100 divided into ₹50 each under the SGST and CGST act
|0.04% of turnover in state or Union territory divided into 0.02% under SGST and CGST
|Exceeding 20 crores
|₹200 divided into ₹100 each under the SGST and CGST act
|0.50% of turnover in the state or Union territory divided into 0.25% each under the SGST and CGST act
For the financial years up to 2021-2022, the late fee penalty for not filing annual returns within the due date was Rs 100 per day per act, meaning ₹100 under CGST and ₹100 under the SGST act. Hence, the total liability amounted to ₹200 per day of default. This is subject to a maximum of 0.25% of the registered taxpayer’s turnover in the relevant state or Union territory.
Another interesting thing to note is that there have yet to be late fees on IGST.
Maintaining proper records and documentation for annual return filing
Annual return filing and compliance requirements for registered regular taxpayers entail filling important information across multiple tables for which accurate records and documentation are required.
According to the GST Act, every registered taxpayer must maintain the account records and books for at least 72 months (6 years). This period will be counted from the last date of filing the annual return for that particular year. The last date for filing the annual return per the act is 31st December of the following year.
If the registered taxpayer fails to maintain proper records and documentation concerning goods and services, then a proper officer would treat such unaccounted goods and services as if the taxpayer had supplied the same. The officer can determine the tax liability on such unaccounted goods. Moreover, the taxable person must pay the tax liability and the calculated penalty.
While one can complete annual return filing alone, you should seek professional assistance. This ensures that every compliance requirement is met and the filing process is hassle-free, smooth, and in sync with the GST regulations.
Frequently Asked Questions
Q1. What is GSTR 9?
The annual return is filed by registered taxpayers once every financial year. It includes SEZ units and developers as well.
Q2. Who all needs to file annual returns under GSTR 9?
A person registered as a normal taxpayer, including SEZ developer or unit and taxpayers who have transitioned from composition scheme to normal taxpayer at any time during the financial year.
Q3. Is there a difference between GSTR 9 and GSTR 9C?
Every registered taxpayer should file GSTR 9, while GSTR 9C is to be filed by registered persons whose aggregate turnover exceeds a certain threshold in the financial year.
Q4. Is it compulsory to file annual returns?
Yes, registered taxpayers must file annual returns under GSTR 9.
Q5. If one gets their registration canceled in the financial year, do they still have to file an annual return?
Yes. The annual return must be filed even if the taxpayer’s registration is canceled during the financial year.
Q6. Do taxpayers opting for a composition scheme in the financial year have to file GSTR 9?
Taxpayers opting for the composition scheme must also file annual returns under GSTR 9 when registered as regular taxpayers.
Q7. Do taxpayers opting out of a composition scheme need to file annual returns under GSTR 9?
Taxpayers opting out of the composition scheme must file annual returns under GSTR 9 only when they paid taxes at normal rates.
Q8. Are there any preconditions for filing annual returns under GSTR 9?
Yes, there are certain preconditions for filing annual returns:
Taxpayers compulsorily have an active GSTIN as regular taxpayers during the relevant financial year, even for one day.
Taxpayers filing all applicable returns like GSTR 1 and GSTR 3B.
Q9. From where can taxpayers file Form GSTR 9?
One can file annual returns on the GST portal by selecting Service-Returns-Annual Return.
Q10. Can annual returns be filed offline by registered regular taxpayers?
Yes. It is possible to file GSTR 9 offline by downloading the form and filling it out physically.