GSTR-9 is merely a compilation of data filed in GSTR-3B and GSTR-1. As per the instructions of the form GSTR-9, it is stated that information of outward supplies ‘may’ be derived from Form GSTR 1. Hence, so far as Outward supplies and tax payable in the annual return is concerned, the same are to be extracted from Form GSTR 1 only. Inward supplies, input tax credit and the net tax paid in cash are to be gathered from Form GSTR 3B. But before filing GSTR-9, Value as per GSTR-3B and GSTR-1 must align. If there are any differences, then the same must be adjusted to subsequent returns filed up to September-18 as per circular 26/26/2017-GST dated 29th December 2017. It seems that the inherent assumption that has been taken while drafting the form is that Form GSTR 3B and Form GSTR 1 are in consonance with each other which may not be always true. In case the values as per Form GSTR 3B and GSTR 1 are not matching with each other, one may arrive at a differential value of tax payable and tax paid as per annual return. A clarification may be expected from the Government regarding the manner of payment of any additional liability (if any). However, if one faces such a situation, then the additional tax liability may be paid through Form GSTR 3B of the subsequent month/Form DRC-03.
As discussed above, it seems that GSTR-9 is a merely compilation of data filed in GSTR-3B and GSTR-1 and no other information can be incorporated in GSTR-9. GSTR-9 requires details from monthly/quarterly returns on ‘as is’ basis. Even if a taxpayer has identified data fed in GSTR-1 / GSTR-3B as incorrect, still the same data is to be taken for reporting in annual return. The actual data present in the financial statements and the books of accounts of the entity is not to be considered at all for the purpose of reporting in annual return. So, the intent of 5 the form is not to allow rectification of data filed in the monthly/Quarterly returns but only aggregation of such data in respect of the financial year. If there is any additional liability missed to be reported in GSTR-1 / GSTR-3B pertaining to 2017-18, the same will be reported in subsequent GSTR-1 / GSTR-3B up to September 2018. However, if the same is missed to be reported in GSTR-1 / GSTR-3B up to September 2018, as of now there is no clarity provided by Government whether the same can be paid through GSTR-3B or DRC-03.
Following information is to be filled in the annual return form:
Part-I: Basic information of Tax payer from Table 1 to 3
- FINANCIAL YEAR
- LEGAL NAME & TRADE NAME
Part-II: Details on which tax is to be paid in Table 4 & 5
- TABLE 4 (DETAILS OF ADVANCES,INWARD AND OUTWARD SUPPLIES ON
WHICH TAX IS PAYABLE AS DECLARED IN RETURNS FILED DURING THE FY)
- SUPPLIES TO UNREGISTERED PERSON (B2C) (NET OF CREDIT/DEBIT NOTE ISSUED)
- SUPPLIES TO REGISTERED PERSONS (B2B) (ONLY FORWARD CHARGE)
- ZERO RATED SUPPLY ON PAYMENT OF TAX
- SUPPLY TO SEZ ON PAYMENT OF TAX
- DEEMED EXPORTS
- ADVANCES ON WHICH TAX HAS BEEN PAID BUT INVOICE HAS NOT BEEN ISSUED
- INWARD SUPPLIES ON WHICH TAX IS PAID ON REVERSE CHARGE
- CREDIT/DEBIT NOTE ISSUED TILL 31ST MARCH
- SUPPLIES/TAX DECLARED THROUGH AMENDMENTS (APRIL TO SEPTEMBER RETURN)
- TABLE 5 (DETAILS OF OUTWARD SUPPLIES ON WHICH TAX IS NOT
PAYABLE AS DECLARED IN RETURNS FILED DURING THE FY)
- ZERO RATED SUPPLY WITHOUT PAYMENT OF TAX
- SUPPLY TO SEZ WITHOUT PAYMENT OF TAX
- INWARD SUPPLIES ON WHICH TAX IS PAID BY THE RECIPIENT ON REVERSE CHARGE
- NIL RATED
- NON-GST SUPPLY
- CREDIT/DEBIT NOTE ISSUED TILL 31ST MARCH
- SUPPLIES/TAX DECLARED THROUGH AMENDMENTS (APRIL TO SEPTEMBER RETURN)
Part-III: Details of Input tax credit from Table 6 to 8
- TABLE 6 (DETAILS OF ITC AVAILED
AS DECLARED IN RETURNS FILED IN FY)
- TOTAL INPUT AS PER GSTR 3B (AUTO)
- INWARD SUPPLIES (OTHER THAN BELOW MENTIONED)
- INWARD SUPPLIES RCM 9(4)
- INWARD SUPPLIES RCM 9(3)
- IMPORT OF GOODS
- IMPORT OD SERVICES
- ITC RECIEVED FROM ISD
- AMOUNT OF ITC RECLAIMED
- TRANS-I AND TRANS-II
- ANY OTHER ITC AVAILED BUT NOT MENTIONED ABOVE
- TABLE 7 (DETAILS OF ITC
REVERSED AND INELIGIBLE ITC AS DECLARED
IN RETURNS FILED IN FY)
- DUE TO NON PAYMENT IN 180 DAYS (RULE 37)
- ISD CREDIT REVERSAL (RULE 39)
- NON-BUSINESS ITC OF INPUT (RULE 42)
- NON-BUSINESS ITC OF CAPITAL GOODS (RULE 43)
- INELIGIBLE ITC SEC 17(5)
- REVERSAL OF TRANS-I AND TRANS-II CREDIT
- OTHER REVERSALS
- TABLE 8 (OTHER ITC RELATED INFORMATION)
- ITC AS PER GSTR 2A (AUTO)
- ITC AS MENTIONED ABOVE TOTAL
- ITC INWARD SUPPLIES AVAILED DURING APRIL TO SEPTEMBER
- ITC AVAILABLE BUT NOT AVAILED
- ITC AVAILABLE BUT INELIGIBLE
- IGST PAID ON IMPORT OF GOOD
- IGST CREDIT AVAILED ON IMPORT OF GOODS
- ITC AVAILABLE BUT AVAILED ON IMPORT OF GOODS (EQUAL TO F-G)
- TOTAL ITC LAPSED DURING CURRENT FY (AUTO)
Part-IV: Details of tax paid and payable in Table 9
- TABLE 9 (DETAILS OF TAX PAID AS DECLARED IN RETURNS FILED DURING FY)
INFORMATION GIVEN IN GSTR 3B DURING THE YEAR
- TOTAL TAX PAYABLE
- PAID IN CASH
- PAID THROUGH ITC
Part- V: Details of transactions of 2017-18 reported during April-18 to Sep-18 in Table 10 to 14
- SUPPLIES/TAX DECLARED THROUGH AMENDMENTS
- SUPPLIES/TAX REDUCED THROUGH AMENDMENTS
- REVERSAL OF ITC AVAILED DURING PFY
- ITC AVAILED FOR PFY
- DIFFERNTIAL TAX PAID ON ACCOUNT OF DECLARATION IN 10 AND 11 ABOVE
Part-VI: Other information from Table 15 to 19
- PARTICULARS OF DEMANDS AND REFUNDS
- INFORMATION ON SUPPLIES RECEIVED FROM COMPOSITION TAXPAYER, JOB WORKER, GOODS SENT ON APPROVAL BASIS
- HSN WISE SUMMARY OF OUTWARD SUPPLIES
- HSN WISE SUMMARY OF INWARD SUPPLIES
- LATE FEE PAYABLE AND PAID
RECONCILIATION STATEMENT GSTR-9C
It has been stated in the law that every registered person whose aggregate turnover during a financial year exceeds the prescribed limit of Rs. 2 Crore, shall get his accounts audited by a chartered accountant or a cost accountant.
In all other cases, no audit is required to be conducted by the Chartered or Cost accountant.
Turnover/Aggregate turnover and other points
It must be noted that the word turnover has not been defined whereas the expressions aggregate turnover has been defined. One may note that the expression turnover in State or turnover in Union territory is defined. In this backdrop the following understanding is relevant:
a) Aggregate turnover is PAN based while turnover in a State / UT is similarly worded except to the extent that turnover in a State / UT is limited to a State;
b) It is therefore, reasonable to interpret that the word turnover used in section 35(5) ought to be understood as aggregate turnover (PAN level).
c) For the financial year 2017-18, the GST period comprises of 9 months whereas the relevant section 35(5) uses the expression financial year;
Therefore, in the absence of clarification from Government and to avoid any cases of default, it is reasonable to reckon the turnover limits prescribed for audit i.e., Rs. 2 crores for the whole of the financial year which would also include the first quarter of the financial year 2017-18.
Please also note that where the expression aggregate turnover (PAN level) is considered, please consider the taxable value under section 15 and not the amount as accounted in the books of accounts. For eg. do not ignore taxable value of stock transfers while examining this threshold limit.
The definition of aggregate turnover includes exempt turnover. Exempt turnover is defined under CGST Act to mean supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services tax Act and includes non taxable supply.
Non-taxable supply is defined under section 2(78) of CGST Act to mean a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services tax Act. Section 9(1) of CGST/ SGST Act and Section 7(1) and 5(1) of UTGST and IGST Act respectively exclude alcoholic liquor for human consumption from the levy/charge of GST.
On a combined reading of the charging sections with the definitions of non-taxable supply and exempt supply, it becomes clear that alcoholic liquor for human consumption forms part of exempt turnover. Since aggregate turnover includes exempt turnover, value of alcoholic liquor for human consumption is to be included while computing threshold limit of Rs. 2 crores.
The definition of ‘aggregate turnover’ includes even exempted supplies. Therefore, even if a person is registered under GST and only provides exempted supplies, he will have to file Form GSTR 9C.
Documents to be submitted along GSTR 9C
As per section 35(5), a copy of audited accounts and such other documents in such form and manner ‘as may be prescribed’ ought to be submitted along with reconciliation statement (i.e. GSTR 9C). Prescription ought to be provided in the Rules as the Act employs the term ‘as may be prescribed’. No documents other than audited annual accounts have been prescribed in Rule 80(3). Part B of GSTR 9C requires the GST Auditor to enclose a copy of audit report of the entity, where the audit of the entity has been carried out by another person under a statute other than GST Act. In the said case, documents declared by the said statute which forms a part of the audited financial statements must also be annexed to the audit report.
The records to be reconciled in GSTR-9C are:
- Books of accounts of registered person – if the registered person
has multiple registrations, information needs to be derived from the Audited
financials of the entity.
- Annual Return of Registered Person in Form GSTR 9.
Form GSTR 9C consists of 2 parts:
Part-A is Reconciliation statement and
Part B is Certificate to be issued by GST Auditor.
PART A- RECONCILIATION STATEMENT
- BASIC DETAILS
- LEGAL NAME/TRADE NAME
- LIABLE TO AUDIT UNDER ANY OTHER ACT
- RECONCILIATION OF TURNOVER
DECLARED IN AUDITED FINANCIAL STATEMENTS WITH TURNOVER DECLARED IN ANNUAL
- RECONCILIATION OF GROSS TURNOVER AND REASONS FOR UN-RECONCILIATION
- RECONCILIATION OF TAXABLE TURNOVER AND REASONS FOR UN-RECONCILIATION
- RECONCILIATION OF RATE WISE LIABILITY AND AMOUNT PAID THEREON AND REASONS FOR UN-RECONCILIATION
- ADDITIONAL AMOUNT PAYABLE BUT NOT PAID
- RECONCILAITION OF ITC AND REASONS FOR UN-RECONCILIATION
- RECONCILIATION OF ITC DECLARED IN ANNUAL RETURN WITH ITC AVAILED ON EXPENSES AS PER AUDITED ANNUAL FINANCIAL STATEMENTS OR BOOKS OF ACCOUNTS AND REASONS FOR UN-RECONCILIATION
- TAX PAYABLE ON UN-RECONCILIED DIFFERENCE IN ITC
- AUDITOR’S RECOMMENDATION ON ADDITIONAL LIABILITY DUE TO NON-RECONCILIATION
PART B – CERTIFICATE TO BE ISSUED BY GST AUDITOR
REPORT BY AUDITOR
Discussion on Practical problems faced by Users
Common problem that people are facing in annual return due to errors made in return filing are as follows:
- INSTANCES WHERE GSTR 3B HAS ERRORS.No effect on sales figure as sales figure to be entered from GSTR-1ITC claimed during the year in GSTR-3B to be auto-populated
If ITC wrongly claimed or not claimed in GTSR-3B till march 2018 but correction made in GSTR-3B till September 2018 then such rectification to be entered in point 8(c)
- Rectification in ITC not made till September 2018 cannot be claimed
anywhere in the return form. (Govt. Need to provide clarification on this point
as of now no clarification provided)
- Details of differences arising between ITC claimed in GSTR-3B and ITC available according to gstr-2A to be given in point 8(d)
- INSTANCES WHERE GSTR-1 HAS ERRORS.Error rectified till march 18 (to be reported in table 4 of GSTR-9)Error rectified till return of September 18 (to be reported in table 10 & 11)Error not rectified: there is no column to report/rectify such error. In annual return we just have to give figures as provided by us in GSTR-1 filed during the year and rectified in return filed till September 2018.it is not a rectification window.