GST Returns

 GST Returns

Returns under GST: Returns are an essential part of the GST ecosystem. A return is a document in which the taxable person reports the details of business transactions executed during the period. In the context of GST law, the person registered under GST law has to report details of sales and purchases periodically in different returns. Periodicity and manner of filing GST returns depend on the nature of registration obtained and turnover. 

1.1.       Need to file returns under GST: GST is a self- assessment-based tax. Return is an important document for taxpayers as well as for the government. Return is an important link of interaction between the taxpayer and the government. Filing of periodic returns is important for the following reasons-

      Determination of correct tax liability of the registered person

      Returns provide important information to the government for necessary policy decisions.

             Filing of correct and timely returns ensures compliance with the provisions of the GST law. This will help a registered person to improve the proposed compliance rating under the GST law.

      Returns are one of the important and primary documents for the government during the assessment and audit of the registered person.

1.2.       Types of returns or statements a registered person is required to furnish under GST: The Central Goods and Services Act, 2017 (hereinafter referred to as “CGST Act”) and State Goods and Services Tax Act. 2017 prescribes  the following returns and statements under Chapter IX of the CGST Act-


 

Sl.

No.

Type of Return or state-

ment

Rele- vant Section

Rele- vant Rule

Description

Periodicity of filing return/ Statement

1.

Form GSTR-1

Section

37

Rule 59

Details of outward

supplies

Monthly/ Quarterly

2.

Form GSTR-2A

Section 38

Rule 60

Details of auto-

drafted supplies

Not to be furnished

(Auto drafted)

3.

Form

GSTR-2B

Section 38

Rule 60

Auto-drafted ITC Statement

Not to be furnished

(Auto drafted)

4.

Form

GSTR-3B

Section

39

Rule 61

Return

Monthly/

Quarterly

5.

Form GSTR-4

Section 39

Rule 62

Return for taxpayers who have opted for composition scheme or availing benefit under Notification no 02/2019 –Central Tax

(Rate)

Annually

6.

Form GSTR–5

Section 39

Rule 63

Return for Non- resident taxable

person

Monthly

7.

Form GSTR–5A

Section 39

Rule 64

Details of supplies of online information and database access or retrieval (OIDAR) services person

located outside India made to non-taxable

persons in India

Monthly

8.

Form

GSTR–6

Section

39

Rule 65

Return for Input

Service Distributor

Monthly

9.

Form GSTR–6A

Section 39

Rule 59(3) &

65

Details of supplies

auto-drafted form

Not to be furnished

(Auto drafted)

10.

Form

GSTR–7

Section

39

Rule 66

TDS Return

Monthly


11.

Form

GSTR–7A

Section 51

Rule 66

Tax Deduction at Source Certificate

The certificate is made available to the deductee on the basis of the return furnished in Form GSTR-7

12.

Form GSTR–8

Section 52

Rule 67

TCS Return

Monthly

13.

Form GSTR–9

Section 44

Rule 80

Annual Return

Annually

14.

Form GSTR–9A

Section 44

Rule 80

Annual Return (For Composition Taxpayer)

Annually

15.

Form

GSTR–9B

Section 44

-

Annual Return by every electronic commerce operator

Annually

16.

Form GSTR–9C

Section 44

Rule 80

Reconciliation Statement

Annually

17.

Form GSTR-10

Section 45

Rule 81

Final Return

Upon cancellation of registration

18.

Form GSTR-11

Section 39

Rule 82

Statement of inward supplies by persons having Unique Identification Number (UIN)

Quarterly [In case of claiming refund]

 

Note: Unless otherwise specified, the section numbers and rules referred to in this publication pertain to the Central Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Rules, 2017, respectively.


2.1. Applicability of annual return: Section 44 of the CGST Act, read with Rule 80 of the CGST Rules, outline the provisions for furnishing annual return. Section 44 of the CGST Act 2017 stipulates the provisions of filing annual returns as under-

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, which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed.

Rule 80 of the CGST Rules designates FORM GSTR-9 as the form of annual return for a registered person other than a person registered under a composition scheme and e-commerce operator. In case of a person paying tax under a composition scheme, FORM GSTR-9A is notified as the annual return. GSTR-9B is designated as the annual return for an e-commerce operator who collects TCS under Section 52. However, FORM GSTR-9B still needs to be notified by the government.

Filing of annual returns is also not applicable in the case of any department of the Central Government, a State Government or a local authority whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed to audit the accounts of local authorities under any law for the time being in force.

2.2.  Due date for filing annual return: The due date for filing an annual return is defined under Rule 80 of the CGST Rules as the 31st day of December following the end of the financial year. The government may extend the time limit for filing annual returns. Earlier, the provision for an extension of the due date for filing annual returns was embedded in Section 44 itself. However, post-substitution of Section 44, such powers are not available within the provisions of Section

44. Powers as laid down under Section 168A may be invoked to extend the due date in exceptional circumstances.

Sub-Section (2) is inserted in Section 44 of the CGST Act to restrict the filing of annual returns beyond three years from the due date of filing of annual returns.

2.3.  Relaxation from filing of annual return: Section 44 empowers the Commissioner to exempt any class of person from filing an annual return on the recommendation of the GST council. In the exercise of those powers, an exemption is given to a registered person whose annual aggregate turnover is up to Rs. 2 crores for the financial year 2022-23 [A similar exemption was there for FY. 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22]

2.4. Applicability of GSTR-9 in cases where registrations are obtained in multiple states and turnover in each such state is below Rs. 2 crores: The term aggregate turnover is defined under Section 2(6) of the CGST Act as “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess. The turnover is calculated on an all-India basis. Therefore, the applicability of annual return turnover at the PAN level would be considered.

i.e. aggregate turnover of all the locations. Suppose aggregate turnover exceeds Rs. 2 crores during the year. In that case, filing of annual returns becomes mandatory, including filing of Nil returns for those GSTINs that do not have any transactions during the year.

2.5. Applicability of FORM GSTR-9 in case of cancellation of registration: Cancellation of registration under GST law shall not affect the liability to discharge the obligation under GST law for any period before the date of cancellation. It has been clarified, as per the FAQ on GSTR 9 available on www. gst.gov.in that the annual return needs to be filed even if the taxpayer has got his registration cancelled during the said financial year.


 2.6.       Applicability of self-certified reconciliation statement: As per Section 44 of CGST Act, 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 which may include a self-certified reconciliation statement, reconciling the value of supplies declared in return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed.

Rule 80(3) prescribes FORM GSTR-9C as the form for furnishing self-certified reconciliation statements as under.

(3) Every registered person, other than those referred to in the second proviso to section 44, an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, whose aggregate turnover during a financial year exceeds five crore rupees, shall also furnish a self-certified reconciliation statement as specified under section 44 in FORM GSTR-9C along with the annual return referred to in sub-rule (1), on or before the thirty-first day of December following the end of such financial year, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Therefore, a registered person whose aggregate turnover during the financial year exceeds Rs. 5 crores must furnish a self-certified reconciliation statement in FORM GSTR-9C. A Self-certified reconciliation statement (GSTR-9C) reconciles the figures furnished in return (GSTR-9) with the details of the audited annual financial statement. However, furnishing of GSTR-9C is not applicable in the following cases-

      Any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the CAG or an auditor appointed to audit the accounts of local authorities under any law for the time being in force,

      An Input Service Distributor,

      A person paying tax under section 51 or section 52,

      A casual taxable person and

      A non-resident taxable person.


2.7.  Consequences for non-filing of FORM GSTR-9: Non- filing or late filing of GSTR-9 has the following implications under GST law-

(a)    Notice to defaulter: Section 46 of the CGST Act read with 68 CGST Rules empowers a proper officer to issue a notice in FORM GSTR-3A to a registered person who fails to furnish a return under Section 39, Section 44, or Section 45 of the CGST Act, 2017 requiring him to furnish such returns within 15 days.

(b)    Late fees for delayed filing: Section 47(2) of the CGST Act provides for the 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 0.25% of the turnover in the State or Union Territory. Similar provisions are also provided under respective state laws. Therefore, effective late fees for late filing of annual return is Rs. 200/- per day, subject to the maximum amount of 0.5% of the turnover in the State or Union Territory.

However, CBIC, vide Notification 07/2023-Central Tax dt. 31st March 2023, partially exempted late fees on the filing of FORM GSTR-9 beyond the due date by certain taxpayers as under-

 

Sr No

Class of registered

person

Amount (Each in CGST &

SGST)

1

Registered person having aggregate turnover up to Rs. 5 crores in the relevant financial year.

Rs. 25 per day, subject to a maximum of 0.02% of the turnover.

2

Registered person having aggregate turnover of more than Rs. 5 crores up to Rs. 20 crores in the relevant financial year.

Rs. 50 per day, subject to a maximum of 0.02% of the turnover.

(c)    General Penalty: Section 125 of the CGST Act provides for a penalty up to Rs. 25000/- each in CGST & SGST for contravention of any provision of the act or rules made thereunder for which no penalty is provided separately. Penalty under Section 125 may be invoked for non-filing of FORM GSTR-9.


 

  RECORDS AND ACCOUNTS UNDER GST LAW  

 3.1.   Introduction: Chapter VIII of the CGST Act contains provisions relating to the maintenance of accounts and records. Accounts and records maintained under this Chapter are the primary sources for filing Annual returns apart from GSTR-1 & 3B. Section 35 of the CGST Act provides for the maintenance of accounts and records under GST law. The accounts and records are to be maintained at the principal place of business. The records include the records relating to the production/manufacturing of goods, inward and outward supply of goods or services, stock of goods, input tax credit availed, etc.

3.2.    General records to be maintained by a registered person: As per Section 35 of the CGST Act, every registered person is required to keep and maintain a true and correct account of following at his principal place of business as mentioned in the certificate of GST registration.

 

Sl.

No.

Type of record

Relevant Section/Rule

Description of records to be maintained

(a)

Production or manufacture of goods

Section 35(1)(a) read with Rule 56(12)

The registered per- son manufacturing goods is required to maintain monthly production accounts showing quantitative details of raw materi- al or services used in the manufacture and quantitative details of the goods so manu- factured, including the waste and by-products thereof.

(b)

Inward and outward supply of goods or services or both

Section 35(1)(b) read with Rule 56(1)

The registered person is required to maintain the accounts in respect of the inward and outward supply of goods or services or both.


 

(c)

Stock of goods

Section 35(1)(c) read with Rule 56(1)

Every registered person, other than a composition taxpayer, shall maintain the accounts    of    stock in respect of goods received and supplied by him, and such accounts shall contain particulars of -

   opening balance,

 

 

 

   receipt,

 

 

 

   supply,

 

 

 

   goods lost,

 

 

 

   stolen,

 

 

 

   destroyed,

 

 

 

   written off or disposed of by way of a gift or free sample

 

 

 

and the balance of stock includes raw materials, finished goods, scrap, and wastage.

In addition to the above, a supplier of service shall maintain the accounts showing quantitative    details of goods used in the provision of services, details of input services utilized, and

the services supplied.


 

(d)

Input tax credit

Section 35(1)(d)

Every           registered

 

availed

read with Rule

person, other than a

 

 

56(1) & (4)

composition taxpayer,

shall keep and maintain an account containing

the    details    of    tax

(e)

Output tax payable and paid

Section 35(1)(e) read with Rule 56(1) & (4)

payable (including tax payable under RCM), tax collected and paid, input tax, and input

tax   credit   claimed,

(f)

A register of tax invoices, credit notes,

debit notes, and delivery challan

Section 35(1)(f) read with Rule 56(1) & (4)

 

 

 

together with a register

 

 

 

of tax invoice, credit

 

 

 

notes,    debit    notes,

 

 

 

delivery challan issued

 

 

 

or received during any

 

 

 

tax period.

(g)

Goods or

Section 35(1)(f)

Every           registered

 

services

read with Rule

person shall keep and

 

imported

56(1)

maintain, in addition

 

or exported

 

to     the     particulars

 

and relevant

 

mentioned    in     sub-

 

documents

 

section (1) of section

35, a true and correct account of the goods or services imported or exported or of supplies attracting    payment of tax on reverse charge along with the relevant documents,

(h)

Supplies attracting payment of tax on reverse charge and relevant documents

Section 35(1)(f) read with Rule 56(1) & (4)

 

 

 

including       invoices,

 

 

 

bills of supply, delivery

 

 

 

challans, credit notes,

 

 

 

debit   notes,   receipt

 

 

 

vouchers,      payment

 

 

 

vouchers, and refund

 

 

 

vouchers.

(h)

Maintaining details of accounts for advances

Section 35(1)(f) read with Rule 56(1) & (4)

Every registered person shall keep and maintain a separate account of advances received and paid, and adjustments made thereto.


 

(i)

Supplier Master

Section 35(1)(f) read with Rule 56(5)

Every registered person shall   keep the particulars of names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act.

(j)

Customer Master

Section 35(1)(f) read with Rule 56(5)

Every registered person shall   keep the particulars of names and complete addresses of the persons to whom he has supplied   goods or services, where required under the provisions of this Chapter.

(k)

Warehouse Master

Section 35(1)(f) read with Rule 56(5)

Every registered person shall   keep the particulars of the complete address of the premises where goods    are    stored by him, including goods stored during transit, along with the particulars of the stock stored therein.

 

3.3.    Specific records to be maintained by a registered person: GST law provides for specific maintenance of records in certain cases by certain classes of persons. Details of such specified class of person along with the additional records are as under-

3.3.1.  Records to be maintained by transporter and owner/ operator of godown or warehouse: Section 35 of CGST Act read with Rule 58 of CGST Rules requires every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.


Therefore, the person engaged in the business of transporting   goods would be required to maintain the records of the goods transported, delivered, and goods stored in transit by him, along with the GSTIN of the registered consigner and consignee for each of his branches.

The owner/operator of a warehouse/godown of a warehouse or godown shall maintain books of account with respect to the period for which particular goods remain in the warehouse, including the particulars relating to dispatch, movement, receipt, and disposal of such goods. The owner/the operator of the godown is also required to store the goods in a manner that can be identified item-wise and owner-wise, and it also facilitates any physical verification or inspection by the proper officer on demand.

3.3.2.  Details to be maintained by works contractor: Section 35(1)(f) of CGST Act, read with Rule 56(14) of CGST Rules, requires a registered person executing the works contract to keep separate accounts for the works contract showing the following details-

(a)    the names and addresses of the persons on whose behalf the works contract is executed;

(b)    description, value, and quantity (wherever applicable) of goods or services received for the execution of the works contract;

(c)    description, value, and quantity (wherever applicable) of goods or services utilized in the execution of the works contract;

(d)    the details of payment received in respect of each works contract, and

(e)    the names and addresses of suppliers from whom he received goods or services.

3.3.3.   Records to be maintained by Agent: Rule 56(11) of CGST Rules requires every agent referred to in clause (5) of section 2 of CGST Act shall maintain accounts depicting the

(a)    particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately;

(b)    particulars, including description, value, and quantity (wherever applicable) of goods or services received on behalf of every principal;


(c)    particulars, including description, value, and quantity (wherever applicable) of goods or services supplied on behalf of every principal;

(d)    details of accounts furnished to every principal and

(e)    tax paid on receipts or on supply of goods or services effected on behalf of every principal.

In addition to the above, any person having custody over the goods in the capacity of a carrier or a clearing and forwarding agent for delivery or dispatch thereof to a recipient on behalf of any registered person shall maintain true and correct records in respect of such goods handled by him on behalf of such registered person and shall produce the details thereof as and when required by the proper officer.

3.4.  Maintenance of additional records or documents: Section 35(3) of the CGST Act empowers the Commissioner to notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified therein.

3.5.  Special manner of maintaining records for the notified class of persons: Section 35(4) of the CGST Act empowers the Commissioner to specify the manner of maintenance of accounts where any class of taxable persons is not in a position to keep and maintain accounts in accordance with the provisions of Section 35 of CGST Act.

3.6. Place of maintenance of records under GST: Section 35 of the CGST Act mandates every registered person to keep and maintain a true and correct account of the requisite records at his principal place of business, as mentioned in the registration certificate. However, the first proviso to Section 35 states that in case more than one place of business is specified in the certificate of registration, the accounts relating to each place of business are required to be kept at such an additional place of business, including data in electronic form stored on an electronic device.

Where any records or books of accounts belonging to the registered person are found at a place other than the place mentioned in the registration certificate, such records would be presumed to be maintained by such a registered person. The provision is subject to an exception where the registered person proves otherwise.

3.7.  Maintenance of records in Electronic Form: The second proviso to Section 35 of CGST Act, read with Rule 56(15) of CGST Rules, allows maintenance of accounts and other particulars in electronic form subject to authentication of such records through digital signature. Rule 57 of CGST Rules provides for the generation and maintenance of electronic records under

(1)      Proper electronic backup of records shall be maintained and preserved in such manner that, in the event of destruction of such records due to accidents or natural causes, the information can be restored within a reasonable period of time.

(2)      The registered person maintaining electronic records shall produce, on demand, the relevant records or documents, duly authenticated by him in hard copy or in any electronically readable format.

(3)      Where the accounts and records are stored electronically by any registered person, he shall, on demand, provide the details of such files, passwords of such files, and explanation for codes used, where necessary, for access and any other information which is required for such access along with a sample copy in print form of the information stored in such files.

3.8.  Other miscellaneous provisions:

3.8.1.  Serially Numbered records: Rule 56(9) of CGST Rules states that where books of accounts are maintained manually, each volume of books of account shall be serially numbered.

3.8.2.  Treatment where the registered person fails to account for goods or services: Section 35(6) of CGST Act provides that where the registered person fails to account for the goods or services both according to Section 35 of CGST Act, the proper officer shall determine the amount of tax payable on the goods or services that are not accounted for as if such person had supplied such goods or services in terms of Section 73 & 74 of CGST Act. It is important to note that this provision is applicable only in the case of Section 17(5)(h), i.e. Goods are lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.

Rule 56(6) of the CGST Act further provides that if any taxable goods are found to be stored at any place(s) other than those declared without the cover of any valid documents, the proper officer shall determine the amount of tax payable on such goods as if the registered person has supplied such goods.

3.8.3.  Treatment of incorrect entry or its deletion in accounts/ records under GST: As per Sub-rule (8) of Rule 56 of CGST Rules, any entry in registers, accounts and documents shall not be erased, effaced or overwritten, and all incorrect entries,


otherwise than those of clerical nature, shall be scored out under attestation and thereafter, the correct entry shall be recorded and where the registers and other documents are maintained electronically, a log of every entry edited or deleted shall be maintained.

3.8.4. Production of accounts maintained under any law to GST authorities: As per Sub-rule 18 of Rule 56, every registered person shall, on demand, produce the books of accounts which he is required to maintain under any law for the time being in force.

3.9  Retention of accounts and records under GST: Section 36 of the CGST Act provides for the retention of accounts and records. As per said Section, the registered person is required to keep and maintain books of accounts and other records as stated under Section 35 and are required to be retained until the expiry of 72 months from the due date of furnishing of the annual return for the year pertaining to such accounts and records. The retention period would also apply to all invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply, and outward supply. In the case where records are maintained manually, such records should be kept at every related place of business mentioned in the registration certificate and should be accessible at every related place of business where such accounts and documents are maintained digitally.

3.10  Additional period of retention: Proviso to Section 36 of CGST Act provides for additional period retention under certain circumstances as under-

(a)    Where the registered person is a party to an appeal, revision, or any other proceedings before the Appellate Authority/ Revisional Authority/ Appellate Tribunal/ Court (whether filed by him or the Commissioner)

(b)    Where the registered person is under investigation for an offence under Chapter XIX of the CGST Act.

In the above cases, the registered person is required to  retain the books of accounts and other records pertaining to the subject matter of such appeal/ revision/ proceedings/ investigation for:

(a)    1   year   after   the   final   disposal   of   such   appeal,

revision, etc., or

(b)    72 months from the due date of furnishing the annual return Whichever is later.


  A STEP-BY-STEP WALKTHROUGH OF GSTR-9

 4.1. Introduction: CBIC, vide Notification No 39/2018-Central Tax dated 4-9-2018, has notified FORM GSTR-9 under Section 44 of CGST Act for filing Annual Return. It was further substituted by vide Notification No 74/2018-Central Tax dated 31-12-2018. The FORM comprises six parts and nineteen tables. The information required to be reported in each table of GSTR-9 has been discussed in subsequent paras. The due date for filing GSTR-9 is 31st December, following the end of the financial year. Annual return is compiled based on the information furnished in periodical returns, i.e. GSTR-

1 & GSTR-3B, along with the information maintained as a part of the accounts and other records as maintained under Section 35 of CGST Act read with Rule 56 of the CGST Rules. However, the tables of GSTR-1 & 3B are not in alignment with the requirements of GSTR-9. Therefore, one has to take extra precautions while reporting the figures in annual returns as the facility to revise the annual return is not available. Therefore, the reporting of information in the Annual Return would be based on GSTR-1, GSTR-3B, and the details available in accounts and records. As discussed earlier, GSTR-9 consists of six parts and nineteen tables, as listed below-

 

Sl.

No.

Part No.

Description

Relevant Tables

1

I

Basic details

1, 2, 3A to 3B

2

II

Details of outward and inward supplies declared during the financial year

4A to 4N, 5A to 5N

3

III

Details of ITC as declared in returns filed during the financial year

6A to 6-O, 7A to 7J,

8A to 8K

4

IV

Details of tax paid as declared in returns filed during the financial year

9

 

5

V

Particulars of the transactions for the financial year declared in returns of next financial year.

10 to 14

6

VI

Other information like pending refund claim, demand of taxes, total tax paid etc.

15A to 15G, 16A to

16C, 17, 18, 19A to

19B

The GSTN portal allows users to obtain a system-computed consolidated summary of GSTR-9, GSTR-1, and GSTR-3B. This summary is based on the monthly returns filed by the registered person and includes details such as the taxable value, liabilities paid through ITC and cash, ITC claims, and reverse charge. GSTR-9 is auto-populated based on GSTR-1 & 3B, with an option to edit the auto-populated data. However, there are certain exceptions. A registered person is not allowed to change the details of the following tables-

Table 6A - The total amount of ITC availed through Form GSTR-3B.

Table 8A - ITC as per Form GSTR-2A (specifically Table 3 & 5 thereof).

Table 9 - Details of tax payments as declared in returns filed during the financial year.

Editing system computed figures enables a registered person to report the correct figures of liability in GSTR-9 which is matching with the accounts and other records. The registered person can report additional liability that was not reported in GSTR-1 or GSTR-3B and pay such liability through FORM DRC-03. However, a registered person is not allowed to avail of additional ITC through GSTR-9. It is worth noting that auto- populated data or consolidated yearly summary of GSTR-

1 & 3B is only for reference purposes. A registered person is required to furnish the details in GSTR-9 based on actual supplies made during the year and based on the accounts and other records maintained under Section 35 of the CGST Act.