Chapter 9: GSTR 9, 9A, 9C: Annual Returns and Audit Under GST
GSTR-9, 9A & GSTR-9C: Annual returns & Audit under GST
In this topic, we are going to cover what are the types of annual returns, its contents, the filing process in brief and issues faced while filing the return. Let us first start with:
What are the types of annual returns, who should file them and by when must the returns be filed?
All registered taxpayers under GST are required to file annual returns. There are 4 types of annual returns:
- GSTR-9- It is an annual return to be filed by all regular taxpayers filing GSTR-1, GSTR-2 and GSTR-3B under GST.
- GSTR-9A- It is an annual return to be filed by a taxpayer who has opted for the Composition Scheme under GST for a particular financial year.
- GSTR-9B- GSTR 9B is the annual return to be filed by an e-commerce operator who has filed GSTR 8 during a financial year.
- GSTR-9C- All registered taxpayers under GST whose aggregate turnover during a financial year exceeds Rs 2 crores is required to get his accounts audited by a Chartered Accountant or a Cost Accountant every year. The audit ensures correct self-assessment of taxes by a taxpayer. A certified GSTR-9C should be filed by the taxpayer along with the audited accounts and Annual Return in Form GSTR-9. The GSTR-9C is a reconciliation statement between these audited accounts and the annual return filed.
Due date for filing the annual return- All GSTR-9 returns need to be filed on or before 31st December of the subsequent financial year.
However, this due date could get extended by the Government, if it deems necessary. For FY 2017-18, the due date has gotten extended to 30th June 2019.
Filing process in brief
Step 1: Login to the GST Portal and go to Returns Dashboard and click Annual Return.
Select the Financial Year and then click Prepare Online.
Step 2: Select the option to file NIL return: Answer the questionnaire whether the taxpayer wants to file NIL return or return with data.
If a taxpayer selects Yes to NIL return - He can directly go to Compute Liabilities page and file a Nil return.
If a taxpayer selects No to NIL return - Annual Returns page will be displayed. It will contain various tiles for which details must be provided to proceed further for filing the return.
Step 3: Fill the data in tiles: Provide the required details in the respective tables. Most of the details will be auto-populated based on the data provided in GSTR-1 and GSTR-3B. A taxpayer can edit the auto-populated details but if the variation is +/- 20% from the auto-populated details, the respective cells will be highlighted in red and a confirmation message will pop-up asking if you want to continue with the variation. Select Yes to proceed.
Fill all the tiles in the Annual returns page and click Save.
Step 4: Preview the draft Annual Return: A taxpayer can preview the draft return in excel or pdf format.
Step 5: Compute Liabilities and late fees: After previewing the draft, a taxpayer can click on compute liabilities. The system will calculate the liabilities along with late fees if any. A taxpayer needs to make payment of the late fees using the electronic cash ledger and the balance payment can be made via net banking, NEFT/RTGS or over the counter payment can also be made.
An important point to note over here is: A taxpayer cannot file Annual Return until the late fees are paid off.
Step 6: File Annual return: Select the Declaration checkbox and Authorised Signatory and then proceed to file by either selecting DSC/EVC.
Contents of each Form
Contents of GSTR-9: It is divided into six parts as shown
Basic details of the taxpayer like trade name, legal name and GSTIN will be auto-populated here.
It requires details of all outward and inward supplies made during the financial year
It requires details of ITC availed during the financial year
It requires details of tax paid during the financial year as reported in the returns filed during the year.
It requires details of transactions related to previous financial year but declared in the returns of April to September of the current financial year or up to the date of filing of annual returns of previous financial year whichever is earlier.
It requires other information like:
- Demands and Refunds
- HSN wise summary of goods supplied and received
- Late fees payable
- Segregation of inward supplies received from a different category of taxpayers.
Contents of GSTR-9A
Its contents are similar to that of GSTR-9. The difference is that it does not require ITC claimed details because the Composition Scheme does not allow claiming of ITC on inputs.
Contents of GSTR-9C
It contains 2 parts:
Part A: Reconciliation Statement which is further subdivided into 5 parts.
Part B: Certification
It requires basic details such as GSTIN, FY, legal name and trade name. A taxpayer is also supposed to report if he is subject to audit under any other law.
It requires a reconciliation of turnover declared in audited financial statements and the one declared in Annual Return.
It requires a reconciliation of tax liability as per the books of accounts and taxes paid as per GSTR-9. It also requires taxpayers to state additional liability arising due to unreconciled differences.
It requires a reconciliation of ITC claimed in GSTR-9 and the one reported in audited financial statements.
It requires reporting by an auditor on any additional liability identified by him during the GST Audit. Taxpayers can settle taxes as recommended by the auditor in Form DRC-03.
It should be certified by a CA or a Cost Accountant.
Some of the issues faced by a taxpayer while filing GSTR-9/9C are:
- Bifurcation of ITC: GSTR-9 requires bifurcation of inputs into inputs, input services, and capital goods. Such bifurcation is not required while filing the monthly return form GSTR-3B. Thus, this additional exercise is required on the part of taxpayers while filing GSTR-9.
- HSN-wise reporting of inward supplies: GSTR-9 requires HSN-wise reporting of inward supplies whereas this reporting is not required in monthly/quarterly returns except for a specified class of taxpayers.
- No space for correction of mistakes made in monthly/quarterly returns: GSTR-9 does not have any table wherein the taxpayer can rectify mistakes made while filing GSTR-1 and GSTR-3B.
- Additional liability reported by an auditor needs to be paid only in cash: Any additional liability recommended by the auditor in Part V of GSTR-9C can be paid only through electronic cash ledger. However, it is optional on the part of the taxpayer to accept or reject the liability recommended by the auditor.
- State-wise calculation of turnover for GSTR-9C: GSTR-9C requires various reconciliations which need to be prepared GSTIN-wise. Thus, the turnover needs to be bifurcated state-wise. Generally, companies prepare accounts at a central location, however, they now need to recalculate state-wise turnover which is again a tedious task.