GST is a value added tax levied at all points in the supply chain, with credit for tax paid on input acquired for use in making the supply. It apply to both goods and services in a comprehensive manner. GST is a mechanism which supports self-compliance where in the assessees assess the taxes payable by them. To ensure the correctness and veracity of the reported information, annual returns and GST audit are required.
All entities having GST registration are required to file GST annual return for every financial year irrespective of their turnover during the return filing period. Hence, even a dormant business that obtained GST registration must file GST return.
- Every registered person whose turnover during a financial year exceeds Rupees 2 crores is required to get his accounts audited by a chartered accountant or a cost accountant and submit a copy of audited annual accounts and the reconcilation statement in form 9C before due date.
- Every registered person, other than an input service distributor, a person paying tax under section 51 or section 52, a casual taxable person and non-resident taxable person, shall furnish an annual return for every financial year electronically in Form 9 on or before the thirty-first day of December following the end of such financial year.
However the last date has been extended to june 30, 2019 vide order No. 03/2018-central tax dated 31st December, 2018 for FY 2017-18.
- A person paying tax under section Composition scheme shall furnish the annual return in FORM GSTR-9A.
The government vide notification no. 39/2018 on 4th September 2018 notified the annual return form GSTR 9/9A, which has been further amended by notification no. 74/2018 – central tax dated 31st December, 2018.
Points to note on Annual Returns
- Nil Annual Return- A person registered under GST but having no transactions during the year is still required to file a Nil Annual return. A person who has got his registration cancelled during the year is also required to file the Annual Returns.
- A registered person who has opted out of composition is required to file both GSTR 9 & GSTR 9A for the relevant periods.
- GSTR 9 does not allow for any revision after filing.
- It is mandatory to file FORM GSTR-1 and GSTR 3B for the FY 2017-18 before filing this return.
- The exceptions to filing of the Annual Return applies to the following category of registered persons:
- Input service distributor
- A person required to deduct TDS
- Tax collector u/s 52
- Casual Taxable person
- Non-resident taxable person
- Composition taxable person
- The declaration of the information in the Annual returns has multiple implications. Any incorrect information can attract tax demands, interests and penalties on the same, leave alone the long-term litigation that follows years later.
- Certain transactions are not reported in the GST returns, but these affect the tax liability at the end of the annual period.
- Liability identified during filing annual return can be deposited with government using DRC-03 Form.
Types of Forms
Following are the different annual return forms:-
GSTR-9: This form is to be filed by regular taxpayers registered under GST. It consists of details regarding the supplies made and received during the year under different tax heads i.e. CGST, SGST and IGST. It consolidates the information furnished in the monthly or quarterly returns during the year.
GSTR-9A: This form is to be filed by taxpayers registered under GST’s composition scheme. It is a summary of all quarterly returns previously filed by the composition taxpayer. (Proviso to sub rule (1) of rule 80)
GSTR-9B: This form is to be filed by ecommerce operators who have filed GSTR-8 during the previous financial year. It is basically an audited, annual account, duly certified by competent authority. (Sub Rule 2 of Rule 80-Not yet notified)
GSTR-9C: This is a reconciliation statement and certificate to be filed by every taxable person whose accounts are required to get audited under GST
Consequences of failure to submit the annual return
- Notice to defaulters
Section 46 of the CGST Act provides where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within 15 days in such form and manner as may be prescribed.
- Late fee for delayed filing
Section 47(2) of the CGST Act provides for levy of a late fee of Rs. 100/- per day for delay in furnishing annual return in Form GSTR 9, subject to a maximum amount of quarter percent (0.25%) of the turnover in the state or union territory, similar provisions for levy of late fee exist under the state/ union territory GST Act, 2017.
- General penalty for contravention of provisions
Any person, who contravenes any of the provisions of this act or any rules made there under for which no penalty is separately provided for in this act, shall be liable to a penalty which may extend to twenty-five thousand rupees. An equal amount of penalty upto Rs. 50,000/- could be levied.