Three important Reasons to File GSTR- 9

Central Board of Indirect Taxes and Customs (CBIC) through Notification No. 47/2019 – Central Tax dated 9th October, 2019  made filing of GSTR 9/ GSTR 9A optional for the business with turnover less than 2 crore. This gave relaxation to many taxpayers. CBIC issued Clarification regarding optional filing of annual return Form GSTR-9 / GSTR-9A  vide Circular No. 124/43/2019 – GST Dated 18th November, 2019. This raised a thought among the taxpayers about the impact on non filing of annual return. On analyzing the above notification and clarification, the following points one must give a thought on-

  • By opting not to file GSTR-9, taxpayers will not be exempted from getting any future notices of inconsistencies in GSTR-1 or GSTR-3B. All returns are already processed and published, and this data can be used by the government. There is also room for calling for enquiry and scrutiny for a taxpayer. Therefore, businesses must not assume that non- filing of GSTR-9 for a financial year will save them from any issues in the future. The tax authorities will remain alert and will be able to take up any inconsistencies found in the monthly return. In another way, businesses should consider GSTR-9 as a last line of defense to correct errors made in GSTR-1 or GSTR-3B, except the claims of ITC.
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  • Reconciliation of records for an entire FY is must Most taxpayers have raised a sigh of relief that with the choice of non-filing of GSTR-9 , they may now choose to set aside annual reconciliation. That should not, however, be the case. For the entire period, taxpayers are still advised to compile and match data. Identifying short-paid or unpaid taxes or claiming excess ITC is essential. Since a lot of changes are made at the end of the year or till the next financial year in September, all of these can have an effect on tax liability or ITC claims. The September returns due date is the deadline for making changes to the information of GSTR-1 or GSTR-3B submitted over the past financial year. Thereafter, the annual returns that outline all these adjustments would have to be filed. But if this deadline is missed, there will be no choice for taxpayers to file annual returns.

GST Annual Return Extension will simplify forms?

  • Eventually, taxpayers can use GSTR-9 as the key documentary evidence in any future litigation that could follow. The GSTR-9 compiles annual GST liability data, reported by ITC after considering various filed returns, including GSTR-2A. For the FY18-19, the tax authorities may become more alert. GSTR-9 filing relaxation was declared at a period when account book closures and income tax return filing are still pending. Some taxpayers may be encouraged to choose another means to manipulate data, particularly in turnover / sales, so that they remain within the scope of Rs 2 crore in order to claim exemption from tax returns.

New 20% Rule on ITC Restriction Simplified

Before reaching to any decision, it is important to decide logically whether to file GSTR-9 or not based on the above parameters.

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