GST Annual Return

Are you a registered taxpayer under GST in India? Then you must be aware of the annual return filing for GST – Form GSTR-9. It is an important document that summarizes the tax transactions of a registered taxpayer for a financial year. However, with various changes and updates in the rules and regulations surrounding GSTR-9, it can be confusing for many taxpayers to understand their obligations and requirements. In this blog post, we’ll discuss everything you need to know about GST annual return filing in India and its implications. So, let’s dive in!

1. What is Form GSTR-9?

Form GSTR-9 is an annual return filing under the GST regime for all registered taxpayers except those in the composition scheme and e-commerce operators, that captures details of outward supplies, inward supplies, tax liability, and input tax credit availed during a financial year. It is due to be filed by 31st December of the year following the particular financial year, and is mandatory for all entities with an annual turnover exceeding Rs. 2 crores. It is a consolidation of all monthly/quarterly returns filed during the year, and comprises six parts and nineteen sections. Before filing GSTR-9, taxpayers must file all GSTR-1, GSTR-3B or GSTR-4 returns, failing which they will not be allowed to file an annual GST return.

Taking into account the pandemic situation, the due date for filing Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement) for financial year 2019-2020 has been extended up to 31st March 2021. The government has also made certain fields of these forms optional to simplify them. Besides, taxpayers opting for the composition scheme must file GSTR-9A, and those required to obtain an annual audit of their accounts must file GSTR-9C, which is a statement of reconciliation between the annual returns in GSTR-9 and the figures mentioned in the taxpayers’ audited financial statements.

To optimize the filing of Form GSTR-9 and claim maximum input tax credit, one can use an AI-driven engine that downloads over 20 PAN-level reports in minutes. The GST council has also proposed late fee rationalization for delayed GSTR-9 filing from FY 2022-23 onwards, wherein registered persons with Annual Aggregate Turnover (AATO) up to Rs. 5 crores would have a reduced late fee of Rs. 25 per day subject to a maximum of 0.02% of turnover, while registered persons with AATO of more than Rs. 5 crores up to 20 crores would have a late fee of Rs. 50 per day subject to a maximum of 0.02% of turnover. An amnesty scheme has also been announced for pending GSTR-9 returns, with a waiver or reduction of late fees on certain conditions. 

2. Who needs to file it?

If you are registered under GST as a normal taxpayer, including SEZ units and SEZ developers, then you need to file the Form GSTR-9 annually. Additionally, if you have withdrawn from the composition scheme to a normal taxpayer any time during the financial year, you are also required to file this return. However, if you are a casual taxpayer, non-resident taxpayer, ISD, or OIDAR service provider, you are exempted from filing the GSTR-9.

According to a recent government notification, the late fee for the delayed filing of annual returns in Form GSTR-9 has been rationalized. The new late fee amount is dependent upon your Annual Aggregate Turnover (AATO). For registered persons with AATO up to Rs.5 crores, the late fee is reduced to Rs. 25 per day, subject to a maximum of 0.02% of turnover. Whereas registered persons with AATO of more than Rs.5 crores to Rs.20 crores, the late fee is reduced to Rs. 50 per day, subject to a maximum of 0.02% of turnover.

Furthermore, the government has announced an amnesty scheme for pending GSTR-9 returns. “The council recommended an amnesty scheme for pending GSTR-9 returns. This scheme comes with a conditional waiver/reduction of the late fees,” declares a recent notification by the Central Board of Indirect Taxes and Customs (CBIC). The amnesty scheme is as follows: the late fee in excess of Rs.20,000 will be waived off, if the GSTR-9 for the years 2017-18 up to 2021-22 are filed between April 1, 2023, to June 30, 2023.

Overall, it is essential to file the Form GSTR-9 annually if you are a registered taxpayer under GST, including SEZ units and SEZ developers, who are not exempted from filing this return. Furthermore, if you have withdrawn from the composition scheme to a normal taxpayer any time during the financial year, you also need to file this return. Ensure that you have an active GSTIN and have filed all applicable returns before filing the GSTR-9 to avoid any legal complications.

3. Difference between Form GSTR-9 and Form GSTR-9C?

Form GSTR-9 and GSTR-9C are two forms that need to be filed by all registered taxable persons under GST in India. While GSTR-9 is the annual return form that must be filed by all registered taxpayers, GSTR-9C is the GST reconciliation statement, which must also be certified by a CA for companies with a turnover of more than 5 crores.

The major difference between the two forms lies in their nature and type of certification. GSTR-9 is prescribed in Rule 80 under Section 44 of the CGST Act, while GSTR-9C is notified in Section 35(5) of Section 44 of the CGST Act. Additionally, GSTR-9 requires a reconciliation statement of five parts to be digitally signed by the registered taxpayer, whereas GSTR-9C requires a certified reconciliation statement of turnover tax paid and ITC, digitally signed by the GST auditor or CA/CMA and the taxpayer.

Furthermore, GSTR-9 has a late fee of up to Rs. 200 per day of delay subject to a maximum of 0.25% of total turnover in the respective state/union territory. On the other hand, according to Section 125 of the CGST Act 2017, a penalty of up to Rs. 25,000/- can be imposed for not getting the accounts audited for GSTR-9C.

Taxpayers who are not required to file GSTR-9 and GSTR-9C include persons collecting taxes under Section 52 of the GST Act, persons deducting taxes (TDS) under section 51 of the GST Act, UIN holders, OIDAR service providers, and composition dealers. However, GSTR-9 must be filed before GSTR-9C, and both forms cannot be revised once filed. It is important to understand the difference between the two forms to avoid confusion and file them correctly. 

4. Is it mandatory to file Form GSTR-9?

Filing of GSTR-9 is mandatory for all registered taxpayers under GST except for a few exceptions. It is an annual return that needs to be filed by 31st December of the year following the financial year. As mentioned earlier, the due date for GSTR-9 filing for FY 2020-21 has been extended to 31st March 2022 due to the pandemic.

The GSTR-9 return is a compilation of outward and inward supplies, tax liability and input tax credit. Taxpayers need to file all GSTR-1, GSTR-3B or GSTR 4 returns before filing GSTR-9. Even if a business is dormant and has GST registration, it is mandatory to file GSTR-9.

According to the Council recommendation, the late fee rationalization for delayed GSTR-9 filing from FY 2022-23 onwards has been revised and reduced for registered persons with an annual aggregate turnover up to Rs.5 cr to Rs. 25 per day subject to a maximum of 0.02% of turnover. For registered persons with an annual aggregate turnover of more than Rs.5 cr to 20 cr, the late fee has been reduced to Rs. 50 per day subject to a maximum of 0.02% of turnover.

“Registered taxpayers who have opted for the GST Composition scheme are required to file GSTR-9A while persons paying TDS under section 51 of CGST Act are not required to file GSTR-9,” clarified a tax expert.

However, it is essential to note that if taxpayers do not file GSTR-9 on or before the due date, they shall attract a late fee of Rs.50 per day subject to a maximum of 0.25% of the turnover for CGST and SGST each. Additionally, they may also face penalty, interest, and prosecution under the GST law.

Therefore, taxpayers should make sure to file their GSTR-9 on time and claim maximum Input Tax Credit (ITC) by using an AI-driven engine and download 20+ PAN-level reports to simplify the process. 

5. How to opt in and opt out of composition and Form GSTR-9?

As a registered taxpayer in India, it’s important to understand the process of opting in and out of composition and Form GSTR-9. Here are some key points to keep in mind:

– Opting in and out of composition: If you’re registered as a normal taxpayer but wish to opt for the composition scheme, you can do so by filing Form GST CMP-02. Similarly, if you’re a composition taxpayer but wish to switch back to the normal scheme, you can file Form GST CMP-04.
– Filing Form GSTR-9: Form GSTR-9 is an annual return that must be filed by all normal taxpayers, including those who have withdrawn from the composition scheme during the financial year. Composition taxpayers, on the other hand, need to file Form GSTR-9A for the period during which they were registered as a normal taxpayer.
– Opting in and out of composition and Form GSTR-9: As a taxpayer who was a regular taxpayer and a composition taxpayer during the financial year, you’ll need to file both Form GSTR-9 and Form GSTR-9A for the respective periods. If you’ve opted out of the composition scheme during the financial year and registered as a normal taxpayer, you’ll need to file Form GSTR-9 for that period.
– Pre-conditions for filing Form GSTR-9: To file Form GSTR-9, you must have an active GSTIN as a normal taxpayer for at least one day during the financial year, and you must have filed all applicable returns, including Form GSTR-1/IFF.
– Late fee rationalisation and amnesty scheme: The government has introduced a late fee rationalisation scheme for delayed filing of GSTR-9, based on the taxpayer’s turnover. Additionally, an amnesty scheme has been introduced for pending GSTR-9 returns, with a conditional waiver/reduction of late fees for eligible taxpayers.

Remember to stay informed about the latest updates and guidelines regarding GST annual return filing in India, and seek professional assistance if needed. 

6. Do I need to file Form GSTR-9 after cancellation of registration?

After the cancellation of GST registration, taxpayers may wonder if there is a need to file Form GSTR-9. The answer to this question is yes. According to the GST law, even after the cancellation of registration, one must file the annual return for the year in which the registration was cancelled. As per the GST Act, “Every registered person shall furnish an annual return for the financial year” and this includes taxpayers who have cancelled their registration.

However, the details to be filled in the form may differ as cancelled taxpayers need to mention the inward and outward supplies made only till the cancellation date. Additionally, it is important to note that the due date for filing GSTR-9 for cancelled taxpayers is the same as that of regular taxpayers. Late fees and penalties may also apply in case of delayed filing.

“A taxpayer, whose registration has been cancelled, would be required to furnish the details of its inward and outward supplies including credit notes, debit notes and exports only for the period starting from the close of the financial year till the date of cancellation of registration,” says Archit Gupta, Founder, and CEO of Cleartax.

Thus, it is crucial for cancelled taxpayers to file their GSTR-9 returns to avoid any legal complications. Not filing the annual return can attract late fees, penalties and interest charges. To avoid such consequences, taxpayers must ensure that all their pending GSTR-9 returns are filed before the due date to avoid any late fees and penalties. 

7. Filing of Form GSTR-9 by taxpayers under composition scheme

Taxayers registered under the composition scheme under GST have to file their annual returns in the Form GSTR-4, but those who wish to be extra diligent can also file the optional Form GSTR-9A. However, with effect from FY 2019-20, the GSTR-9A form has been scrapped and replaced by the revised GSTR-4. The annual return in Form GSTR-9A is required to be filed on or before 31st December of the year following the closure of the particular financial year. Failure to file the annual return on time attracts a late fee of 0.25% of turnover per day under CGST/SGST/UTGST, subject to a maximum of the same.

It is important for composition taxpayers to keep in mind that all taxpayers registered under the composition levy scheme under GST had to file GSTR-9A, except for those who pay TDS under section 51 of the Act or are e-commerce operators paying TCS under section 52 of the Act. The GSTR-9A includes fundamental details such as GSTIN, legal name, and trade name of the taxpayer. It also includes details of outward and inward supplies declared in regular quarterly returns, taxes paid under different heads such as IGST, CGST, SGST, cess, interest, and late fee penalties, and particular transactions for the previous FY declared in returns of April to September of the current FY or up to the date of filing of the annual return, whichever is earlier.

In conclusion, taxpayers under composition scheme who wish to file the optional Form GSTR-9A must do so before the deadline, failing which they will have to pay the late fee. It is strongly advised to ensure that all diligence has been taken in filling out the Form GSTR-9A to avoid any discrepancies in the future. 

8. Pre-conditions of filing Form GSTR-9

Before filing a Form GSTR-9, there are several pre-conditions that taxpayers must meet. Firstly, taxpayers must have an active GSTIN during the relevant financial year as a normal/regular taxpayer, even if it was for a single day. Secondly, taxpayers must have filed all applicable returns, including Form GSTR-1/IFF. These pre-conditions ensure that taxpayers have reported all the necessary information related to their purchases, sales, input tax credit, refund claims, and demand created.

It is important to note that only registered taxpayers can file Form GSTR-9, including SEZ units and SEZ developers. Taxpayers who have withdrawn from the composition scheme to a normal taxpayer any time during the financial year are also required to file Form GSTR-9. However, casual taxpayers, non-resident taxpayers, ISD, and OIDAR service providers are not required to file an annual return in Form GSTR-9.

In addition, composition taxpayers need to file Form GSTR-9 for the period during which they were registered as a normal taxpayer. Taxpayers who have opted out from the composition scheme during the relevant financial year are required to file Form GSTR-9 for the period they paid the tax at normal rates.

Taxpayers who have got their registration cancelled during the financial year also need to file the annual return. These pre-conditions ensure that taxpayers comply with the mandatory filing of Form GSTR-9, which is an important document that provides information about a taxpayer’s financial transactions in a financial year. 

9. Late fee rationalisation for delayed GSTR-9 filing

Late fee charges for delayed GSTR-9 filing have been a major concern for businesses in India since the introduction of the GST regime. However, with the recent rationalisation of late fees under the GST amnesty scheme, the burden on taxpayers has been significantly reduced. As per the recent Central Tax notification, businesses that missed the previous deadlines for filing annual returns in Form GSTR-9 can do so at a concessional late fee under this scheme. The waiver of late fees is computed under the law by an amount exceeding Rs.10,000 per return per Act. This means that if a business wants to file a GSTR-9 of a past financial year, say 2018-19, it can do so by paying a late fee of only up to Rs. 20,000.

The notification also defines a new late fee for different categories of taxpayers, based on their annual aggregate turnover. The reduced late fees have been fixed at a maximum of 0.04%, 0.02% under each Act, of the turnover in the state/UT for taxpayers under the first slab, up to Rs.5 crores. The second slab ranges between Rs.5 crores to Rs.20 crores of turnover, the late fee for delay is Rs.100 per day per return, and the maximum late fee chargeable is 0.04%, 0.02% under each Act, of the turnover in the state/UT. The third and final slab is for businesses with a turnover of over Rs.20 crores, where the late fee remains the same as earlier, i.e. Rs.200 per day per return for the delay. However, the maximum late fee is restricted to 0.50% of turnover in state/UT, which is lower than in previous years.

These measures aim to encourage taxpayers to come forward and file their GSTR-9 returns within the set deadline to avoid higher penalties. It’s crucial to remember that GSTR-9 must be filed even if it’s a nil return and cannot be revised once submitted. Hence, accuracy in the details reported in missed GSTR-9 returns is crucial to avoid any potential notices from the department. The amnesty scheme and rationalisation of late fees will relieve a lot of taxpayers who had been struggling to file their returns by taking the appropriate route. 

10. Amnesty scheme for pending GSTR-9 returns

The much-awaited Amnesty Scheme for non-filers of GSTR-9 has finally been notified by the Central Board of Indirect Taxes and Customs. This is great news for businesses that missed the previous deadlines for filing annual returns in Form GSTR-9, as they can now file their pending returns and avoid hefty late fees. The Amnesty Scheme is valid for non-filers of GSTR-9 until FY 2021-22, and those who do file can do so by paying a late fee of only up to Rs.20000. The best part is that they need not pay the rest of the late fees over and above Rs.20000 if the actual computed late fee by the CGST provision of Section 47 exceeds the maximum cap. This is a great relief for businesses that have been struggling with high late fee charges, which have often run into lakhs!

However, businesses should be careful to file their pending GSTR-9 returns during the stipulated time frame, as any further delay may have serious consequences. The Budget 2023 has fixed a limitation period of three years for submitting any pending returns, and if this comes into force by notification, taxpayers will be barred from submitting past GSTR-9 and could invite legal troubles from the tax authorities.

It is important to note that GSTR-9 must be filed even if it is a nil return and once filed cannot be revised. Hence, taxpayers must ensure accuracy in the details reported in the missed GSTR-9 returns to avoid any potential notices from the department. Moreover, failure to file GSTR-9 can attract penalties ranging from Rs.100 to Rs.500 per day, as per the turnover of the taxpayer.

The Amnesty Scheme is not just a boon for non-filers of GSTR-9, but it also defines a new late fee for different categories of taxpayers with different turnover slabs. The reduced late fee will provide significant relief to businesses, and taxpayers falling under the lower turnover category can expect this benefit to continue in the coming financial years as well. Overall, the Amnesty Scheme is a welcome move by the government that will help taxpayers comply with GST regulations without bearing unnecessary financial burdens.