GSTR 9 – Annual GST Returns Riddle
Every registered entity is required to file annual return for goods and services tax (GST) by December of the next year. Since the form was not ready in time, the original due date of December 2018 is now extended up to 30 June 2019.
 
Registered persons, with more than Rs2 crore turnover, have to file GST reconciliation statement and certification (GSTR 9C) as well as annual returns or GSTR9 and audited financial statements. GSTR 9C is required to be certified by a chartered accountant (CA).
 
GST annual returns or (GSTR9) is a summary of details already reported in GSTR1 (sales returns) and GSTR3B (monthly/ quarterly), i.e., summary of sales and purchases along with tax payments. This, in theory, looks very simple as one-nation-one-tax GST; but when we try to actually fill the returns, there are multiple issues for which no clarifications are available or there are different interpretations by professionals. A few examples are given below:
 
1. In GSTR9, adjustments or amendments up to September 2018 are asked to be reported. However, the Central Board of Indirect Taxes and Customs (CBIC) has already extended this date up to March 2019. Consequent changes in the form are yet to be made. 
 
2. Table 4 of GSTR9 asks for details of advances, inward and outward supplies made during the financial year on which tax is payable. This data is auto-populated as per GSTR1 filed. However, if some sales are not reported in GSTR1 but tax is already paid through GSTR3B then where to report it is not clarified.
3. The FAQs on this matter issued by CBIC read as under:
 
“In Form GSTR-9, can additional liability not reported earlier in Form GSTR-3B be declared? Yes, additional liability not reported earlier at the time of filing Form GSTR-3B can be declared in Form GSTR-9. The additional liability so declared in Form GSTR-3B is required to be paid through Form GST DRC-03.”
 
First of all, it should be GSTR9 and not GSTR3B in line 3. Further, it just information NOT info known but does not say which table and where to declare this liability. 
 
4. Input reversals done in GSTR3B are shown as utilisation of input tax credit (ITC) in auto-populated table 9. Further, this field in not editable. 
 
5. Headings of table 11 and 12 say that “Details of the previous financial year's transactions reported in next financial year” are to be shown there. However, there is difference in language used in the help file and line item. The help file says, “Particulars for the previous FY transactions declared in returns of April to September of next FY or up to date of filing of annual returns for 2017-18, whichever is earlier.” Whereas individual line item for table 11 and 12 talks only about GSTR1. Now there is confusion as to whether changes made in GSTR3B in the next financial year can be reported here. There is no other table to report these changes either. 
 
6. For those who are not supposed to file audit report in 9C, there is confusion about whether GSTR9 should be based only on returns filed or books of accounts. There is no mention of books of accounts anywhere in GSTR9 frequently asked questions (FAQs).
 
7. On tax paid on reverse-charge basis, in subsequent financial year through GSTR3B, where does one report in GSTR9? There are no final answers to this. If reported along with normal turnover, it will not match with books of accounts.
 
8. Table 7 of GSTR9 says, ITC reversed for the financial year is to be disclosed. However, it does not specify in which returns. If reversed during 2018-19 for 2017-18 then it may lead to double reduction while filing next year’s GSTR9.
 
9. Table 8 of GSTR9 about ITC related information has no column for IGST on import paid but goods still in bonded warehouse, hence credit not taken. Many persons have not taken this credit till goods are cleared. If we follow as per GSTR9 schema, this credit will lapse. 
 
10. The harmonised system of nomenclature (HSN) wise summary of inward supplies where 10% or more of total inward supply is to be given. However, if the supplier has not provided the exact HSN code, it would be very difficult for the taxpayer to now search for it.
 
These are some of the issues that taxpayers are facing while filing GSTR9 annual return. There are many such issues in GSTR9C audit report form as well. The main issue is that the government has been very slow in giving clarifications and, since returns filed cannot be revised, people are waiting till the last date to file. We all know what happens to GSTN in the last few days of any due date.  
 
(CA Nikhil Vadia has over 20 years of experience in direct and indirect taxation, internal audit, systems review and management consultancy.)
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COMMENTS

Ritesh Chopra

3 weeks ago

Sir In Annual Return, the hsn code vise details has to be filled gst rate vise but while preparing GSTR 1 return no such thing is there. This thing seems very difficult as No software provides hsn wise Plus Tax rate vise details as demanded in annual return

ANAND SHEMBEKAR

1 month ago

ICAI ,ICMAI,Tax practioners bodies ,Industries Associations should raise GST issues with new Govt. and GST council.

There are so many compliance issues. Day by day huge pressure on tax professional .

Good and Simple Tax become most complicated law.



Vaithiyanathan G

1 month ago

yes. still some other points to be discussed

Vij Mon

1 month ago

Dear Nikhil, all points are ok except one thing that Form 9C can be attested only by CA. This form can be attested by Chartered Accountant and Cost Accountant in practice.

Bombay HC Sets Aside Reward Point System for Appellate Commissioners under CBDT's Action Plan
The Bombay High Court has set aside a key portion of the Central Board of Direct Taxes (CBDT) action plan, where the commissioners of income tax-appeals (CIT-A) who pass ‘quality’ orders, would have received two credit points. The Association of Tax Consultants had filed the writ petition against the CBDT's action plan contending that the 'quality orders as envisaged by CBDT would result in favour of the income tax (I-T) department' only.
 
In an order, the bench of Justice Sarang V Kotwal and Justice Akil Kureshi said, "When the CBDT guidelines provide greater weightage for disposal of an appeal by the appellate commissioner in a particular manner, this proviso of sub­section (1) of section 119 of the Act, would surely in a breached. It is neither possible nor necessary to judge the actual effect of such guidelines on the orders passed by the appellate authorities. Suffice it to record that such guidelines have a propensity to influence the appellate commissioners and be tempted to pass an order in a particular manner so as to achieve a greater target of disposal. Any temptation though in the guidelines referred to as incentives for disposal of an appeal in a particular manner, would not stand the test of law."
 
In the petition, the Association of Tax Consultants had contended that granting more weightage to such orders would have the possibility of influencing the outcome of the appeals before the appellate authorities.
 
In terms of the provisions contained in sub­section (1) of Section 119 of the Act, the CBDT may from time to time issue such orders, instructions and directions to other income tax authorities for proper administration of the I-T Act.
 
The bench says, "While granting such wide powers to the CBDT under sub­section (1) of Section 119 of the Act, the proviso thereto provides that no such orders, instructions or directions shall be issued, so as to require any income tax authority to make a particular assessment or to dispose of a particular case in a particular manner. In exercise of these powers thus the CBDT cannot issue any instructions or directions to any income tax authority to make a particular assessment or to dispose of a case in a particular manner."
 
The Association of Tax Consultants had also raised the issue of setting of target and putting pressure on appellate commissioners. It stated, "Such targets and time limits would put unnatural pressure on the commissioner to decide the cases in a hasty manner, which has every possibility of denying a fair hearing to the assessee."
 
The Bombay HC says, "Under the circumstances the CBDT has now decided to withdraw the guidelines for the coming year. In our opinion in its existing form for the past financial year also the same cannot be allowed to have effect. We are conscious that the appellate commissioners have already passed the orders. Correction of these orders cannot be doubted en-masse only because they were passed under the shadow of the said policy. Nevertheless to allow the implementation of this policy, on the orders passed by the appellate commissioners even for the past financial year, would amount to an illegal prescription to prevail and operate."
 
The CBDT, in its action plan, has expressed concerns over increasing cost and high volume of litigations. It said, litigation has been rising over the years and has now assumed grave proportions, as is evident from the following data:
 
No. of appeals pending with CIT (A) as on 1 April 2017 - 3,28,173
No. of appeals disposed of by CIT (A) during FY17-18-1,23,480
No. of appeals pending with CIT (A) as on 1 April 2018 - 3,21,843
Demand involved in appeals with CIT (A) as on 1 April 2018 - Rs6.38 lakh crore
Demand stayed by ITAT/Courts as on 1 April 2018 - Rs87,035 crore 
 
In its action plan, the CBDT had said, "Such high volume of litigation has resulted in rendering a huge amount of tax as uncollectible. Besides, it is a major impediment towards creating an environment of tax certainty for the taxpayers. It also involves infructuous costs on account of efforts to realize taxes blocked in these appeals.The substantial progress made last year is required to be continued with renewed vigour so as to bring down the quantum of litigation and unblock the revenue involved."
 
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Notice to Samsung for not passing GST cut benefit to consumers
The Directorate General of Anti-Profiteering (DGAP) has served a notice on technology major Samsung India for allegedly not passing on the benefits of GST reduction to its customers and in turn making undue profits, sources said.
 
The notice, sources said, was served on the basis of a complaint that alleged the company was not tranferring the rate cut in the Goods and Services Tax (GST) on television sets to the consumers.
 
In December, the GST Council reduced the tax rate on televisions with screen sizes of up to 32 inches to 18 per cent from 28 per cent, which came into effect on January 1, 2019. Earlier, only the television sets with screens up to 26 inches were in the 18 per cent tax slab.
 
The anti-profiteering body, which functions under the GST Council, has also sought documents of sales made by the company.
 
A Samsung India spokesperson said: "Samsung reduced its sales price according to GST reduction with effect from January 1, 2019. We are cooperating with DGAP on this matter."
 
Sources said the complaint refers to only one of the company television models and that the company will reply to the notice soon.
 
Non-transmission of rate cuts to consumers violates Section 171 of the Central Goods and Services Tax Act which mandates that any reduction in tax rates on goods and services or benefits of input tax credit should be passed on to customers through reduction in prices.
 
The duty of the anti-profiteering agency is to conduct investigation and collect evidence necessary to determine whether the benefit of reduction in the rate of tax on any goods or services has been passed on to the recipient by way of commensurate reduction in prices, in terms of Section 171 of the CGST Act, 2017.
 
Several companies have faced action from the anti-profiteering body over numerous complaints filed by consumers.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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