Introduction to GST Annual Returns

To ensure the correctness and veracity of the reported information annual returns and GST audit are required. It becomes essential to have counter checks and balances to ensure that there is no seepage of exchequer’s revenue. GST principles embrace information technology and reduce the interaction with the tax administrators. The responsibility has been given to the Chartered Accountants and cost accountants for performing the audit functions considering their expertise in the arena. GST law needs all entities who are registered to the initial mechanism of returns required the filing of the following for a regular registered person. However, GSTR 3B was introduced by virtue of Sub Rule 5 of Rule 61 owing to the postponement of GSTR 2 and 3. In case of a Composition Registered Person GSTR 4 is the prescribed return. Further the concept of Annual returns has been effectuated under GST. Although the concept of Annual return was in vogue by virtue of VAT Statutes in certain states, the same wasn’t there in the Service Tax Statute as well as the Excise Law.

In order to understand the gamut of the GST Annual returns and its requirement, it would be relevant for us to understand the legal provisions relevant for GST Annual Returns. Two important provisions which are relevant and important in this context are Section 35(5) and Section 44(1) of CGST Act, 2017. In terms of section 35(5) “every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under subsection (2) of section 44 and such other documents in such form and manner as may be prescribed”. Section 44(1) requires that 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 for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. This form is notified by the government vide Notification 39/2018 on 4th September 2018. In terms of Rule 80(1) of the CGST Rules, 2017 “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 as specified under sub -section (1) of section 44 electronically in FORM GSTR-9 through the common portal either directly or through a Facilitation Centre notified by the Commissioner: Provided that a person paying tax under section 10 shall furnish the annual return in FORM GSTR9A.” Further, Section 44(2) mandates every registered person who is required to get his accounts audited in accordance with Section 35(5) to furnish the copy of audited annual accounts and a reconciliation statement reconciling the value of supplies declared in the annual return with such audited annual financial statements. In terms of Section 44(2), Rule 80(3) requires every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Points to Note on Annual Returns

In case of the regular registered persons whose aggregate turnover exceeds Rs. 2 Crore, they are required to furnish the following

GSTR 9 – The Annual ReturnAudited Annual AccountsGSTR 9C – A reconciliation statement mapping the annual returns Vs. the Audited Annual Accounts.

Summary