GST Audit: Quick Tips to remember while filing GSTR-9 and GSTR-9C for FY 2019-20

GST Audit: Quick Tips to remember while filing GSTR-9 and GSTR-9C for FY 2019-20

filing GSTR-9 - GSTR-9C - Taxscan

As we are already aware that the CBIC has extended the due date for furnishing of GSTR-9 and GSTR-9C for the financial year 2019-20 from 31, December 2020 to February 28, 2021, and further extended till 31 March 2021, in view of the difficulties expressed by the taxpayers in meeting the time limit.

It is noteworthy that recently financial budget 2021 has proposed to omit the provision section 35(5) and amend section 44 of CGST Act, 2017. After acceptance of the bill by the president of India, GST audit need not to file. Recently CBIC clarified through a retweet on Twitter that ‘Section 35 and 44 of CGST Act are proposed to be amended in Finance Bill, 2021.

However, these proposals will come into effect from a date to be notified later. For Financial Year 2019-20, the existing provisions shall continue.

Form GSTR-9 is an annual return which is required to be filed as per section 44 read with rule 80(1) of CGST rules, 2017 wherein it is mandatory for the registered persons  to file whose aggregate turnover in a financial year exceed Rs. 2 crore, for Financial Year 2017-18, Financial Year 2018-19 and Financial Year 2019-20 as well.

Form GSTR-9C is a statement of reconciliation between the annual return GSTR-9 filed and the amount as per the audited financial statement of the taxpayer. GSTR-9C is required to be filed by the taxpayer as per section 35(5) read with rule 80(3) of CGST rules, 2017. Initially annual return was required to be filed by every registered person having turnover exceeding Rs. 2 Cr. Thereafter CBIC issued Notification No. 16/2020- Central tax dated 23rd March, 2020 to revise the threshold limit to Rs. 5 Cr. For F.Y. 2018-19 & onwards.

Now here are the quick tips for those who are furnishing of GSTR-9 and GSTR-9C:

  • Mandatory to file GSTR-9 even in absence of Sale

In case you have not made any outward supply i.e. sale; not received any goods/services i.e.purchase); no other liability to report; not claimed any credit; not claimed any refund; not received any order creating demand; there is no late fee to be paid etc. then it is mandatory for the taxpayer to file the Nil Form GSTR-9 can be filed for the Financial year. However, the taxpayer can not skip filing the GSTR-9 merely for the reasons of absence of any kind of transaction.

  • Download and save the PDF version of GSTR-9 summary from the GST portal

Make Sure that you download and save the PDF version of GSTR-9 summary from the GST portal  for any reference.

  • Confirm GSTR-1 and the GSTR-3B returns are filed

You need to ensure that all the GSTR-1 returns and the GSTR-3B returns from 1st April 2019 to 31st March 2020 must have been filed and they must not be in the ‘submitted’ status.

  • Optional Reporting of information in Tables 4 (I), (J), (K) and (L) of GSTR-9

It is optional for the taxpayers to report the information in Tables 4 (I), (J), (K) and (L) of GSTR-9, which covers the reporting of the credit notes and the debit notes issued during Financial Year 2019-20; both addition and reduction in supplies or tax declared through amendments in GSTR-1 during FY 2019-20. All these amounts can instead be adjusted directly to Tables 4 (A) or Tables 4 (B) to (E) of the GSTR-9, for B2C and B2B sales, respectively.

  • Absence of requirement to further bifurcate exempted supplies as nil-rated and non-GST

In respect of the reporting of exempted supplies during FY 2019-20, there is no need to further bifurcate this as nil-rated and non-GST for Tables 5 (E) and (F) of GSTR-9. A cumulative figure can be entered in Table 5 (D) as exempted.

  • No need to report sales of FY 2019-20 declared on or after 1st April 2020

There is an absence of the need to report sales of FY 2019-20 declared on or after 1st April 2020 but before the due date of filing GSTR-3B of September 2020. Those details will come in Table 10 and 11, depending on whether it was an increment or decrement.

  • Significant change introduced in Table 6 of GSTR-9

For Table 6, there is an important change reintroduced for FY 2019-20. The relaxation to club input tax credit availed on inputs, capital goods and input services as inputs will no longer apply from FY 2019-20 onwards. Input services may be clubbed along with inputs. However, report the input tax credit on capital goods separately. The taxpayers may face hassles in reporting if proper ledgers are not maintained for this in books of accounts.

  • Claiming tax credit during FY 2019-20 belonging to next year need not be reported

If any sales or input tax credit of FY 2018-19 was reported during FY 2019-20. In that case, such amounts must be reduced if auto-populated in Tables 4, 5, 6 and 7 of GSTR-9. CBIC clarified that suppose one is claiming tax credit during FY 2019-20 but which belongs to next year, it need not be reported in Table 6 but will go to Table 13.

  • Table 7 of GSTR-9 requires reporting of any ITC reversed

Table 7 can be used for showing the reversal of ITC which has been reversed within FY 2019-20 itself through GSTR-3B or DRC-03. The requirement to report rule-wise, such as tax credit reversal under Rules 37, 39, 42, and 43, including blocked credits under Section 17(5) of the CGST Act, was optional until FY 2018-19. This relief applies to even FY 2019-20. Instead, report it as a single total amount of reversal in Table 7 (H1) called ‘Other reversals’.

  •  Don’t forget to match ITC auto-populated with purchases

Make sure to match the input tax credit auto-populated into Table 8 (A) with purchases as reported in your income tax return to avoid inconsistencies.

Pay any additional unpaid liability in form DRC-03 after matching auto-populated tax liability in Table 9 of GSTR-9 with your records. Note that this payment can be made even after filing GSTR-9.

  • Table 8(c) requires the reporting of ITC received in FY 2019-20

Table 8 (C) of GSTR-9 requires the reporting of input tax credit received in FY 2019-20 but availed between 1st April 2020 and the due date of filing GSTR-3B of September 2020 (31st October 2020). So, suppose you have any reversals of the input tax credit belonging to FY 2019-20 but carried out from 1st April 2020 and the due date of filing GSTR-3B of September 2020. In that case, it must be reported in Table 12 of GSTR-9.

  • Reporting in Tables 12 and 13 is optional as per Central Tax

Reporting in Tables 12 and 13 is optional as per Central Tax Notification 79/2020. Likewise, Tables 15 for reporting demands and 16 for reporting purchases from composition taxpayers and supplies on an approval basis are optional.

  • HSN-wise summary of sales and purchases is optional

Tables 17 and 18 for HSN-wise summary of sales and purchases is optional for FY 2019-20.

  • Report the values only up to two decimal places in the GSTR-9

In case  you use the offline utility then Report the values only up to two decimal places in the GSTR-9. On 22nd February 2021 GST Network clarified that due to a popular error that taxpayers have faced. The error is known as “Error! Invalid Summary payload”. It crops up after uploading the JSON file created from the offline utility due to entering values up to three decimal places.

  • Tables 5 (B) to 5 (N) of GSTR-9C to capture the turnover details are optional

The auditor may fill a single cumulative figure only in Table 5 (O). Tables 5 (B) to 5 (N) of GSTR-9C to capture the turnover details are optional

  • Tables 12 (B) and (C) are optional

Two tables are now optional namely Tables 12 (B), i.e., the input tax credit of last year availed in FY 2019-20 and Table 12 (C) that contains input tax credit of FY 2019-20 that is to be availed next year.

  • Table 14 for filing up the expense-wise claim of ITC optional

Table 14 for filing up the expense-wise claim of input tax credit continues to be optional for FY 2019-20.

  • GST rate-wise declaration of transactions for FY 2019-20

As per an advisory by the GST Network dated 22nd February 2021, clarification was given on the GST rate-wise declaration of transactions for FY 2019-20. The tax amount against rates such as 1%, 1.5% and 7.5% in Tables 9, 11 and Section V of GSTR-9C may be declared a single cumulative amount or under a field called ‘Others’ of the Tables.

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