ANNUAL RETURN UNDER GST

[Mr. M. GOVINDARAJAN]

Annual Return

Section 44(1) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that every registered person, other than-

• an Input Service Distributor,
• a person paying tax under section 51 or section 52,
• a casual taxable person; and
•  a non-resident taxable person,

 shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed

Due Date for filing Annual Return

The Annual return shall be filed on or before 31^st December following the end of financial year.  As such for the year 2017-18 the Annual return should be filed on or before 31.12.2018.   Since the electronic system to be developed was at the advanced stage and was likely to be made operational by the 31st January, 2019 as a result whereof, the said annual return for the period from the 1st July, 2017 to the 31st March, 2018 could not be furnished by the registered persons, within the due date and because of that, certain difficulties have arisen in giving effect to the provisions of the said section.  Vide order No.1/2018-Central Tax, dated 11.12.2018 the Government declared that the annual return for the year 2017-18 shall be filed on or before 31.03.2019. 

Being felt that the implementation of the operational system would further delay, the Central Government, vide Order No.3/2018-Central Tax, dated 31.12.2018 extended the due date of filing annual return by 30.06.2019.  Again vide order no. 06/2019-Central Tax, dated 28.06.2019, the Central Government extended the due date by 31.08.2019.    There may be no further extension, it is hoped.  Therefore all the registered persons as mentioned in Section 44(1) have to file the annual return without fail otherwise penal provisions will be attracted. 

Form for Annual Return

Rule 80 of Central Goods and Services Tax Rules, 2017 (‘Rule’ for short) provides that the registered persons as mentioned in Section 44(1) shall file the annual return electronically in Form GSTR – 9 and the registered persons who opt to pay tax under section 10 (composition) are to file annual return electronically in Form GSTR – 9A.

Form GSTR – 9

Form No. GSTR – 9 was inserted vide Central Goods and Services Tax (Eighth Amendment) Rule, 2018, dated 04.09.2018.  The said form has been replaced by Central Goods and Services Tax (Fourteenth Amendment) Rules, 2018, dated 31.12.2018.

Before filing Annual Return

 It is mandatory to file all FORM GSTR-1 and FORM GSTR-3B for the financial year 2017-18 before filing this return. The details for the period between July 2017 and March 2018 are to be provided in this return.

Contents of the Return

The Annual Return contains VI parts as detailed below-

• Part I – Basic Details (Table 1 to 3);
• Part II – Details of outward supplies and inward supplies made during the financial year-

• Table 4 - Details of advances, inward and outward supplies made during the financial year on which tax is payable;
• Table 5 - Details of Outward supplies made during the financial year on which tax is not payable;

• Part III – Details of Input Tax Credit for the financial year-

• Table 6 – Details of ITC availed during the financial year;
• Table 7 – Details of ITC reversed and ineligible ITC for the financial year;
• Table 8- Other ITC related information;

• Part IV – Details of tax paid as declared in returns filed during the financial year (Table- 9);
• Part V - Particulars of the transactions for the Financial year 2017-18 declared in returns between April 2018 till March 2019-

• Table 10 - Supplies / tax declared through Amendments (+) (net of debit notes);
• Table 11  - Supplies / tax reduced through Amendments (-) (net of credit notes)
• Table 12 - Reversal of ITC availed during previous financial year;
• Table 13 - ITC availed for the previous financial year;
• Table 14 - Differential tax paid on account of declaration in 10 & 11 above;

• Part VI – Other Information-

• Table 15 – Particulars of demands and refunds;
• Table 16 - Information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis;
• Table 17 - HSN Wise Summary of outward supplies;
• Table 18 – HSN wise summary of inward supplies;
• Table 19 – Late fee payable and paid.

Besides the above the person who files the annual return shall give verification as to information given herein above is true and correct to the best of his knowledge and belief and nothing has been concealed there from and in case of any reduction in output tax liability the benefit thereof has been/will be passed on to the recipient of supply. 

Some points

Part II consists of the details of all outward supplies & advances received during the financial year for which the annual return is filed. It may be noted that all the supplies for which payment has been made through FORM GSTR-3B between July 2017 and March 2018 shall be declared in this part. ⁴[It may be noted that additional liability for the FY 2017-18 not declared in FORM GSTR-1 and FORM GSTR-3B may be declared in this return. However, taxpayers cannot claim input tax credit unclaimed during FY 2017-18 through this return.

Part III consists of the details of all input tax credit availed and reversed in the financial year for which the annual return is filed. 

 Part IV is the actual tax paid during the financial year. Payment of tax under Table 6.1 of FORM GSTR-3B may be used for filling up these details.

Part V consists of particulars of transactions for the previous financial year but paid in the FORM GSTR-3B of  between April 2018 and March 2019.

Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in this form, through FORM DRC-03. Taxpayers shall select “Annual Return” in the drop down provided in FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger only.

Notice to return defaulters

Where a registered person fails to furnish the annual return a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.

Late fee

Any registered person who fails to furnish the annual return by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the State or Union territory.

Separate returns

Businesses having operations in multiple States/Union Territories need to file a separate GSTR-9 annual return for each State/Union Territory, and not for the entire company/business as a whole.

Some issues

Some issues in relation to filing annual return are as below-

• The registered persons should ensure that all monthly and quarterly filed returns match with the data reported in the GSTR-9. Mismatch of data could be one of the primary causes of getting a demand notice at a later date from the GST department. While the due date for making amendments to data of FY 17-18 has passed, the registered persons can still disclose any additional tax liability in the GSTR-9 return. The same can be paid in form DRC-03.
• Before filing the annual return, it is the duty of the registered person to reconcile, verify and report only accurate information. In addition to this, the registered person should ensure that there is substantial documentary proof of all data that is reported in the return, in order to avoid unnecessary hassles at a later date.
• The annual GST return calls for the bifurcation of data across various fields such as input tax credit, HSN codes, demands and refunds, to name a few. This level of detail was not required at the time of filing the monthly or quarterly GST returns. Hence, a lot of digging into the books of accounts will be necessary to find and report this data accurately in the GSTR-9 return.
• A registered person under GST has to compulsorily file an annual return for the period up till which their registration is cancelled. Even in cases where there have been no transactions during the year, a NIL return needs to be filed.
• Majority of the details in the Tables of GSTR-9 will be auto-populated from GSTR-1 and GSTR-3B. A registered person can edit these auto-populated values. If the difference is more than 20%, the cells will be highlighted in red and a confirmation message will pop-up asking ‘if the taxpayer wants to proceed despite deviation.’
• Successful filing of GSTR-9 requires data to be thoroughly reviewed and reconciled. Understanding the causes of differences between the books of accounts and GST annual return is key to satisfactory compliance. Thousands of line items of data cannot be reconciled without using a smart solution that quickly points out and helps fix gaps. Therefore, businesses must begin with preparation of GSTR-9 without any further delay. 
• Additional liability not reported earlier at the time of filing Form GSTR-3B can be declared in Form GSTR-9. The additional liability so declared in Form GSTR-3B is required to be paid through Form GST DRC-03.