The aim of implementing GST was to simplify compliance and streamline the indirect tax system in the country. GSTR-9 annual return filing is an important aspect of GST compliance in India. The annual return is a crucial document that summarizes the financial and tax liabilities of the taxpayer for a particular financial year. Non-compliance under GSTR-9 can result in late fees and other penalties. Here we discuss the importance of GSTR-9 compliance and the consequences of non-compliance.
GTR-9 return filing is imperative, and taxpayers must understand the process of filing GSTR-9 thoroughly so that the input tax credit and tax liability can be computed accurately. All registered regular taxpayers, except certain businesses exempted as specified under the law, are required to file GSTR-9. It is an annual return with details of all inward and outward supplies, input tax credit, tax liability, and tax paid during a financial year. It consolidates the monthly and quarterly returns filed by taxpayers in a year. It is expected to show the final values along with corrections, if any, for a financial year. The annual return must be filed by the due date as part of the compliance process.
Requirement for filing GSTR-9
All taxpayers, excluding those registered under the composition scheme, non-resident taxpayers, input service distributors, and OIDAR service providers, are required to file the annual return in GSTR-9. The following taxpayers are required to file GSTR-9:
- Normal taxpayers: All businesses that are involved in supplying goods and services and registered as normal taxpayers under GST are required to file GSTR-9.
- SEZ units and SEZ developers: Special economic zone units and SEZ developers come under the purview of filing GSTR-9 like normal taxpayers.
- Transition from the composition scheme: Taxpayers who have transitioned to the normal scheme from the composition scheme at any time during the financial year are required to file GSTR-9.
- The taxpayers must ensure timely filing of relative returns like GSTR-3B, GSTR-2A, and GSTR-1, as per the taxpayer’s classification. Without filing these returns and without clearing outstanding dues, the taxpayer will not be allowed to file the GSTR-9 annual return.
Also read: All About GSTR 9 Online Filing Process
Compliance under GSTR-9
Compliance under GSTR-9 is mandatory for all taxpayers registered under GST in India. Compliance with GSTR-9 includes the timely filing of GSTR-9, accurate reporting and reconciliation of data with the monthly and quarterly returns filed during the year, and payment of taxes and late fees within the due date.
Filing GSTR-9 is mandatory for taxpayers with an annual aggregate turnover above 2 crores in a financial year. For taxpayers with an annual aggregate turnover of up to Rs 2 crore, it is optional. Taxpayers with an annual aggregate turnover above Rs. 5 crore are required to file GSTR-9C.
Due date for filing GSTR-9
The due date for filing GSTR-9 is December 31st of the year following the tax year. For example, the due date for filing the return for the year 2022–23 is December 31st, 2023.
Late fees and Penalties for non-compliance in GSTR-9
The irregularities in filing the annual returns by the taxpayers mandated stricter norms and the introduction of penal provisions for return filing. So CBIC introduced the following rules with regard to late fees and other penalties for non-compliance under GSTR-9:
Types of non-compliance
|Late fees for delayed filing of GSTR-9: Normal or regular taxpayers||
Late fee for delayed filing of GSTR-9: A late fee of Rs. 200/- per day (CGST Rs. 100/- and SGST Rs. 100/-) per day, subject to a maximum of Rs. 5000/- or 1/4th of the taxpayer’s turnover in the state or union territory, whichever is less, is applicable for delayed filing of GSTR-9.
Late fees for non-filing of GSTR-9: Normal or regular taxpayers
Late fee for non-filing of GSTR-9: A late fee of Rs. 200 per day (CGST Rs. 100 and SGST Rs. 100) per day, subject to a maximum of 1/2th of the taxpayer’s turnover in the state or union territory, is applicable.
Late fees for delayed filing of GSTR-9 on Interstate Supplies
For interstate supplies, a late fee of Rs. 200 per day is applicable for delayed filing of GSTR-9.
Late fees for delayed filing of NIL GSTR-9
For NIL GSTR-9 returns, a late fee of Rs. 100/- (CGST Rs. 50/- and SGST Rs. 50/-) per day is applicable.
The late fee must be paid in cash and cannot utilize the input tax credit available in the electronic credit ledger of the taxpayer.
Interest applicability for non-compliance in GSTR-9
Along with the late fees, taxpayers are liable to pay interest for non-compliance under GSTR-9 as follows:
- Delayed GST payment: Interest at 18% per annum
- Excess ITC claim: Interest at 24% per annum
- Reduced Tax Liability: Interest at 18% per annum Other Penalties
Cancellation of registration
The GST registration of the taxpayer is liable to be cancelled under the following circumstances:
- A regular taxpayer has not filed the returns for a continuous period of 6 months
- A composite taxpayer has not filed returns for 3 quarters
- A person who has availed voluntary registration under GST and not commenced business within 6 months of the date of registration
- Registration under GST has been obtained by fraud, willful misrepresentation, or suppression of facts.
Seizure of goods or conveyance
When a person does not account for the taxable goods on which he is liable to pay the tax, he is liable for the seizure of goods or conveyances and a fine of Rs. 10,000 or the amount equal to the tax evaded for the following offenses:
- When a person supplies or receives goods in breach of any provisions or rules with the intent to evade tax
- When a person supplies taxable goods without registering with GST
- When a person uses a conveyance for the transportation of goods in breach of any provisions of GST
Penalties under Section 122 of CGST Act
There are certain offenses specified under Section 122 of the CGST Act that attract penalties like interest and taxes. Some of the offenses may also attract prosecution under Section 132, depending on the severity of the offense defined in the section.
Steps to avoid non-compliance under GSTR-9
Compliance under GSTR-9 is important for taxpayers to avoid late fees, penalties, and other consequences. Taxpayers can stay compliant by following these steps:
- Timely filing: Delayed filing and non-filing will lead to late fees, interest, and other penalties and consequences. Therefore, taxpayers must ensure the timely filing of GSTR-9. Maintaining a calendar of returns and properly recording the entries in the calendar can be very useful in filing the returns on time.
- Accurate reporting: The taxpayers must ensure accuracy in the GSTR-9 annual return. Incorrect or false reporting can lead to penalties and losses.
- Reconciliation: Reconciling data in GSTR-9 with data in other specified returns like GSTR-3B, GSTR-2A, etc. is compulsory. Taxpayers should regularly reconcile the data in the returns as well as their books of account to ensure accuracy in filing the annual return.
GSTR-9 is an important return, and filing this annual return by the due date is a crucial aspect of compliance. Non-compliance can lead to late fees, penalties, and even legal consequences. It is therefore very important for taxpayers to understand the filing process and avoid penal consequences due to late, incorrect, or non-filing. The taxpayers should maintain proper records of their transactions and reconcile the returns with their financial statements regularly. They must collect and keep accurate information ready well before the due date to ensure timely filing of this important annual return and stay compliant.
Frequently asked questions
Which are the different types of GST annual returns?
There are four types of annual GST returns in India. They are:
- GSTR-9: For regular taxpayers, SEZ units, and SEZ developers
- GSTR-9A: For taxpayers registered under the composition scheme
- GSTR-9B: For taxpayers who are e-commerce operators and who are required to collect tax at source (TCS).
- GSTR-9C: This is a reconciliation statement that is applicable to taxpayers whose aggregate annual turnover is above 5 crore rupees in a financial year and is required to be filed.
Is the GSTR-9C required to be certified by a chartered accountant?
No, as per the changes to Section 35(5) and Section 44 of the CGST Act, notified by CBIC, taxpayers with an annual turnover exceeding 5 crore rupees can submit the self-certified reconciliation statement in Form No. GSTR-9C during their annual return.
Is filing GSTR-9 mandatory?
Yes, it is mandatory for all taxpayers registered under GST in India to file the annual return.
Should a taxpayer who has been a normal taxpayer for part of the year and a composition taxpayer for part of the year file GSTR-9?
The taxpayer is required to file Forms GSTR-9 and GSTR-9A for the related periods. That is, for the period in which the taxpayer has remained a composition taxpayer, he must file GSTR-9A, and for the period in which he is registered as a normal taxpayer, he is required to file the annual return in Form GSTR-9.