January 07, 2019

GST ANNUAL RETURN:

A Return to be filed once in a year, by the registered taxpayers under GST. It is a consolidated information of all inward and outward supplies for tax administrator in the monthly or quarterly returns for a particular financial year. It consists of details regarding the supplies made and received during the year under different tax heads i.e. CGST, SGST and IGST.

CONTENTS:

  1. Liability to file GST Annual return:
  2. Different types of GST Annual return:
  3. Due date of filling  GST Annual return:
  4. Details required in the GSTR 9 form:
  5. Preparation & discussion of form GSTR-9:
  6.  Issues with GSTR 9 form and suggestions:
  7. Consequences of Non-Compliance:
  1. Liability to file GST Annual return:

All the registered taxable persons under GST must file Annual Return in GSTR 9 form. However, following persons are not required to file GSTR 9:

  • Taxpayers opting Composition scheme as they must file GSTR-9A
  • Casual Taxable Person
  • Input service distributors
  • Non-resident taxable persons
  • Persons paying TDS under section 51 of GST Act.
  1. Different types of GST annual returns:

There are 4 types of GST annual returns:

  • GSTR 9: GSTR 9 should be filed by theregular taxpayers filing GSTR 1, and GSTR 3B.
  • GSTR 9A:GSTR 9A should be filed by the persons registered under composition scheme under GST.
  • GSTR 9B:GSTR 9B should be filed by the e-commerce operators who have filed GSTR 8 during the financial year.
  • GSTR 9C: GSTR 9Cshould be filed by the taxpayers whose annual turnover exceeds Rs  2 crores during the financial year. All such taxpayers are also required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement of tax already paid and tax payable as per audited accounts along with GSTR 9C.
  1. Due date of filling GST annual return:

GST annual return (GSTR-9) due date is on or before 31st December of the subsequent financial year. For instance, for FY 2017-18, the due date for filing GSTR 9 is 31st December 2018.

  1. Details required in the GSTR 9 form:
  • Part-1: Basic details of the taxpayer. This detail will be auto-populated.
  • Part-2: Details of Outward and Inward supplies declared during the financial year(FY). This detail must be picked up by consolidating summary from all GST returns filed in previous FY.
  • Part-3: Details of ITC declared in returns filed during the FY. This will be summarised values picked up from all the GST returns filed in previous FY.
  • Part-4: Details of tax paid as declared in returns filed during the FY.
  • Part-5: Particulars of the transactions for the previous FY declared in returns of April to September of current FY or up to the date of filing of annual returns of previous FY whichever is earlier. Usually, the summary of amendment or omission entries belonging to previous FY but reported in Current FY would be segregated and declared here.
  • Part-6: Other Information comprising details of:

--- GST Demands and refunds,

--- HSN wise summary information of the quantity of goods supplied and received with its corresponding Tax details against each HSN code,

---Late fees payable and paid details and

---Segregation of inward supplies received from different categories of taxpayers like Composition dealers, deemed supply and goods supplied on approval basis.

  1. Preparation & discussion of form GSTR-9:

The declaration of the information in the Annual returns has multiple implications. Any incorrect information can attract tax demands, interest and penalties on the same, leave alone the long-term litigations that follow years later.

The principal source for preparing GSTR-9 will be GSTR-1 and GSTR-3B returns. All information must be cross-checked with the books of accounts before declaring in the annual returns.

Broadly, the form entails the declaration of annual sales, bifurcating it between the cases subject to tax and cases not subject to tax. On the purchase side, the annual value of inward supplies and ITC availed thereon, classified as inputs, input services and capital goods and the ITC to be reversed due to ineligibility.

Important Note:

Primarily, certain transactions are not reported in the GST returns, but these affect the tax liability at the end of the annual period. Supply without consideration and goods sent on approval basis to name a few. One of the popular ones being the deemed supplies where taxpayers have sent inputs or capital goods to the job workers and have not received them by one or three years respectively.

Although no clarity is obtained regarding the treatment of any additional liability arising due to mismatch or ITC identified as available but not declared in periodic returns, it is advisable that the liability so is identified, be paid before filing annual returns. Hence, the annual returns must be prepared as per the GSTR-1 and GSTR-3B on an ‘as is’ basis.

  1. Issues with GSTR 9 form and suggestions:

The issues were mostly based on the fact that the annual return form would not auto-populate the information which was already filed in the periodic returns. In order to make the filing of annual return simple for taxpayers, the GSTN updated the form and resolved most of the issues. Some of them are as follows: 

Issues:

  • HSN of inward supplies is required in the annual return GSTR 9 which was not needed while filing monthly GSTR 3B.
  • The difference in the annual return as per the books of accounts and GST data filed during the financial year.
  • Segregated details of ITC availed are required as Inputs/Input services/ Capital Goods

Suggestions/Solutions:

  • This requirement of reporting HSN wise inward supplies should be done away with. However, Clear Tax GSTwill fill in table 18 i.e. HSN codes of the inward supplies in the GSTR 9 automatically from the purchase register.
  • GSTR 9 should provide the means to verify whether the figures from GST data filed for annual return are in line with the books of accounts. ClearTax GST will prepare annual returns in 2 formats; one as per books of accounts and other as per GST data filed. In case of any differences, a reconciliation report will be generated and accordingly, the discrepancies will be sorted.
  • This bifurcation in the ITC availed will lead to reworking on the accounting entries by the assessee, as the same details were not required in the periodic returns.

Clear Tax GST will help the assessee file GST annual return to report the bifurcation with ease in the annual return.

  1. Consequences of Non-Compliance :

Late fees for not filing the GSTR 9 within the due date is Rs. 100 per day per act up to a maximum of an amount calculated at a quarter percent of the taxpayer turnover in the state or union territory. Thus it is Rs 100 under CGST & 100 under SGST, the total penalty is Rs 200 per day of default. There is no late fee on IGST.

The government’s support and intention to ensure that GST compliance is followed paved a way for application of penalties. The penalties can be partially or fully waived as the government reserves the right to do the same.

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