As per section 44 of the CGST act 2017, every registered person, except 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 the prescribed form called as
GSTR 9 for normal taxpayers, GSTR 9 A (for composition taxpayers) and GSTR 9B
for E-commerce operators.
Further, if the turnover of the firm is more than 2 crores, they have to file
annual return along with a copy of the audited annual accounts and a
reconciliation statement in form GSTR 9C, reconciling the value of supplies
declared in the return furnished for the financial year with the audited annual
financial statement, and such other particulars as may be prescribed.
The GSTN auto-populates several tables in the GSTR-9 /9A/9B return as per the
details available to them through Monthly filed GSTR 3B/GSTR 1M returns of the
taxpayer. This is done for convenience and ease of filing for taxpayers.
However, this is not necessary that the auto-populated data is hundred percent
Hence, every taxpayer should verify this data with their books of accounts and
their GST returns filed. On verification If any data is found to be incorrect,
then the data as per the books of accounts/GST returns, whichever is correct,
needs to be reported in the GSTR-9 return. It is very important that any
unreconciled differences are adjusted before filing GSTR-9 as once filed GSTR-9
cannot be revised. Any difference between the Sales/supply Register and
GSTR-1/3B returns filed can be manually edited in GSTR-9.
Transactions which were not available while filing the GST Monthly returns of
2017-18 for example: - Supplies made without consideration, goods that have been
sent on approval basis, deemed supplies (goods sent to job workers not received
back within the time specified of 1 year or 3 years, as applicable), etc., can
be reported at the time of filing GSTR-9. If any liability arises out of these
transactions that should be paid using the form DRC-03. But, no input tax credit
can be claimed in respect of the same.
Now the million-dollar question arises if everything is so simple, why there is
so much of hue and cry about the annual returns in GST. The government has to
extend the last date of filing returns several times and still the annual
returns for almost 75 percent of the taxpayers have not been filed even for the
financial year 2017-18.
The level of compliance of tax laws in our country has always been a matter of
debate and unfortunately far below the standards. The sixty percent of the
businesses are not of scale and they completely fail to comply with the complex
tax laws on one or more parameters due to cost of compliance. These businesses
are always looking for exemptions (recently firms with less than 2 crores
turnover has been exempted from filing of annual returns) and such schemes
through which they could wash off their tax liabilities.
Further, the body of chartered accountant responsible for maintaining accounting
and financial standards in our country also promote and encourages a scenario of
confusion and litigation because it suits them and serves their purpose well.
They do not want themselves to be held responsible and accountable.
The hue and cry upon annual return filling in GST is one such classic example of
chronic inertia. According to the presently prescribed forms, if all the GSTR 3B
and GSTR 1 monthly returns for a taxpayer had been filed properly, they will not
be facing any problem in filling their annual returns and most of the column in
the prescribed annual return will be populated automatically.
But since, the monthly returns for many of the taxpayers are manipulated
especially with inflated input tax credits or evasive in nature or have not been
filed at all; they are facing problems in their annual returns.
Further, in the case of taxpayers whose turnover is more than 2 crores, the
mandatory requirement of reconciliation statement reconciling the value of
supplies declared in the return furnished for the financial year with the
audited annual financial statement duly attested by a chartered accountant is
creating a kind of havoc in the CA fraternity. The chartered accountants do not
want themselves to be held responsible and accountable.
In the earlier regime (service tax/vat/central excise), the chartered
accountants were never held responsible for the returns filed by them on behalf
of the taxpayer. Even in cases of blatant evasion apparent on the face of the
records, they came clean by passing the buck upon the taxpayers. In the earlier
regime, they also had the liberty to revise the returns as and when pointed out
by the tax department or found themselves in troubled waters of fear to be
caught by the tax departments.
In the name of complexity of the prescribed forms for annual returns, the breed
of evasive businesses duly collaborated by their chartered accountants and ever
non-compliant MSMEs are deliberately creating this fuss to defy the biggest
reform in the system of Indirect taxation.