GST Annual Return & Audit (GSTR 9 & GSTR 9C) For FY 2020-21

  • September 18, 2021
  • GST
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GST Annual Return & Audit (GSTR 9 & GSTR 9C) For FY 2020-21

Before the Central Goods and Services Tax (Sixth Amendment) Rules, 2021came into existence, every registered person having turnover exceeding Rs. 2 Crores had to get their accounts audited by Chartered Accountants(CA). They had to submit the copy of the annual audited accounts and file a  reconciliation statement according to Section 44 of the CGST Rules in Form GSTR-9C. After the 2021 Amendment, Taxpayers having an annual aggregate turnover of up to 2 crores are exempt from filing form GSTR-9 for the financial year 2020-2021.If a taxpayer has an aggregate turnover of more than Rs. 5 Crores during one financial year, he has to submit reconciliation statement with Form GSTR-9C.

In this article, we will look into GST audit and annual return, GSTR-9, and GSTR 9C for the financial year 2020-2021, the current format, and the major changes these forms.

Table of Contents

What is the GSTR-9 Annual Return form?

The taxpayers have to file GST returns on a monthly or quarterly basis. After every financial year, the taxpayers have to submit the annual return before December 31st of the subsequent year. The taxpayer has to submit the yearly return form GSTR-9 diligently. This form includes the details for outward, inward supplies. Additionally, it is the merger of all the returns which the taxpayer furnishes in a particular year.

The authorities via notification No, 31/2021- Central Tax on July 30th, 2021 made exemptions for people with aggregate turnover of up to Rs. 2 Crores in the financial year 2020-21 for submitting the GSTR-9 form. These taxpayers are exempted by the CBIC.

What is the GSTR 9C Form under GST?

The applicant needs to consolidate the data for tax collection and in order to ensure credible information is submitted, the taxpayer has to submit the reconciliation statement and consolidate the values and make the correct declaration.

According to section 35 of the CGST Act, the dealers having a turnover of more than 5 crores have to fill the audited annual accounts and the reconciliation statement. GSTR 9C is a type of GST audit and annual return form. To put it simply, It is an annual audit form for dealers with a turnover of more than Rs. 5 crores in one financial year. Moreover, the taxpayer has to submit the reconciliation statement, input tax credits, and the audit certification.

Form GSTR-9C is a self-certification form and there is no need for certification by CA or CMA. There were relaxations for reporting data in form GSTR-9C for the financial year 2020-21, these relaxations will continue for the financial year 2020-2021 also.

Major Changes under GST Audit and annual return in 2021

Here are some major amendments for GST audit and annual return form for the financial year 2020-2021

  • According to Central Goods and Services Tax (Sixth Amendment) Rules, 2021, there is an exemption for filing Form GSTR-9 for taxpayers with turnover up to Rs. 2 Crores for the 2020-2021 period. Before 2021, GSTR-9C was applicable to all the businesses having a turnover of more than Rs. 2 Crore in a particular financial year. But in 2021 it underwent through a major reform.
  • Earlier chartered accountants did the audit of records but these were removed in 2021. Now, 9C only requires self-certification by the businesses.
  • The main agenda of the government under the recent amendment was to reduce the burden on small taxpayer.
  • Furthermore, the government has made amendments in Section 35(5) and 44 of the CGST Act, 2017 which deals with the GST audit and annual return as well as the reconciliation statement.
  • Besides, the government has also made amendments to Rule 80 of the CGST Rules, 2017. With this amendment, now taxpayers with aggregate turnover up to Rs. 5 Crores are exempt from filing reconciliation station in 9C. Lastly, we can say that the government has made major amendments in GSTR-9 and outward supply details.

What is the due date for filing GSTR-9 and GSTR-9C in India?

The last date for submitting the GSTR-9 and GSTR-9C is on or before December 31st, 2021 for the financial year 2020-2021.

If the taxpayer fails to submit the form by the due date, he will be liable for late fees of Rs. 200 per day till the failure continues subject to the maximum amount of half percentage of his turnover. Hence, for calculating the maximum penalty, the term turnover in state or union territory is taken into consideration.

Other Key Aspects of Form GSTR-9 and 9C

  • The government did not do any major changes in the format of the form for the financial year 2020-2021 except for the inclusion of self-certification.
  • In form GSTR-9, the taxpayer has to furnish the particulars of demands and refunds, details of supply, and the HSN wise summary of the outward and inward supplies for the 2020-21 period.
  • Lastly, the taxpayer has to put the input tax credit for input services and capital goods in GSTR-9.

Applicability of Form GSTR-9 and GSTR-9C

  • Businesses having aggregate turnover up to Rs. 2 Crores will be exempt from filing GSTR-9 for the financial year 2020-2021.
  • The taxpayers have to file GSTR-1 and 3B before submitting the annual return because of the GSTR-9 form.
  • If the annual aggregate turnover is more than Rs. 2 crores then the businesses have to get the books having annual financial statement audited according to section 35(5) of CGST Act.
  • Taxpayers or businesses having an aggregate turnover exceeding Rs. 5 crores have to submit GSTR-9C (reconciliation statement as per the July 2021 notification.
  • After the GST audit in the company, the auditor has to prepare the reconciliation statement.
  • Earlier requirement of certification by CA for GSTR-9C has been done away with. Now the taxpayers submit a self-certified form GSTR-9C and complete reconciliation statement without audit on or before December 31st of the relevant year.
  • Additionally, the Tax Department keeps a check on the information in form GSTR-9C for any discrepancies. In case of any discrepancy, they issue notice to the taxpayer to resolve the discrepancy.

Who needs to submit GSTR-9 and GSTR- 9C?

The companies having turnover up to Rs. 2 Crores for the financial year 2020-21 are exempt from filing the GSTR-9 form. Furthermore, according to section 80, it can be said that taxpayers opting for composition scheme, casual taxable person, input service distributors, and finally persons submitting TDS under sections 51 and 52, are exempt from filing GSTR-9. Additionally, the government departments and people with a turnover of less than or equal to Rs. 5 Crores are on the exemption list.

If a taxpayer has an aggregate turnover of more than Rs. 5 Crores during one financial year, he has to audit the accounts and submit an audited annual account and reconciliation statement with Form GSTR-9C.

For assistance in GST audit and annual return forms, the taxpayers usually approach a CA.

Format in GSTR-9 Return

The GST audit and annual return form GSTR-9 has the following format-

  • It includes the disclosure of all the details about the annual sales.
  • It also has details about the annual value of the inward supplies and ITC.
  • Lastly, the form also purchases under the input and input services and the capital goods.

Format of 9C

Form GSTR-9C is divided into two main parts- A and B. Part A consists of a reconciliation statement. Earlier Part B had the certification by the CA. Part A was further categorized into five parts.

The first part deals with basic details of the taxpayer like the GSTIN, or financial year. The second part discusses about the reconciliation. Part III and IV discuss about the reconciliation and differences. Lastly, part V dealt with the auditor’s recommendation. The last part will consist of verification of registered person and the certification in Part B is omitted.

Amendments in Part-A of GSTR-9C

Following are the changes in Part A according to rules made under the Central Goods and Services Tax (Sixth Amendment) Rules, 2021-

  • In Part II Tables 5B to 5N, the reconciliation as per the audited annual financial statement is given. These tables are optional while submitting the 9C form for the financial year 2020-2021. The taxpayer can make adjustments in table 50.
  • Particular about the reconciliation of ITC i.e. Reconciliation of input tax credit is optional for Form GSTR-9C for the 2020-21 period.
  • The verification of the registered person is added.
  • Part V has particulars about the additional liability due to non-reconciliation.

GST Return fillings in India online

Takeaway

The Central Goods and Services Tax (Sixth Amendment) Rules, 2021 aims at the rationalization of the burden on taxpayers in terms of GST audit and annual return. The amendment eases the compliance requirement of furnishing the reconciliation statement. However, still, the submission of both the forms GSTR-9 and 9C  is complex. Although the government now includes self-certification of GSTR-9C, one has to ensure that all the details are authentic. For the financial year 2020-2021, the taxpayer has to submit GSTR-9 and 9C before December 31st, 2021.

Also Read: How to file GST return online

CA Pulkit Goyal, is a fellow member of the Institute of Chartered Accountants of India (ICAI) having 10 years of experience in the profession of Chartered Accountancy and thorough understanding of the corporate as well as non-corporate entities taxation system. His core area of practice is foreign company taxation which has given him an edge in analytical thinking & executing assignments with a unique perspective. He has worked as a consultant with professionally managed corporates. He has experience of writing in different areas and keep at pace with the latest changes and analyze the different implications of various provisions of the act.

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