25 Nov 2018Posted By: Mudit Handa

5 things you must not forget while filing the GST annual return

The GST regime has already completed a year. To a great extent, it has ushered in greater tax compliance rate, fiscal consolidation and overall ease of doing business. This is the first time taxpayers all over India will be filing their annual returns under GST.


What is the need to file an annual return under GST?

It is an evident truth that every taxpayer in India needs to submit an annual record for his taxable transaction to the government. This necessary compliance is fulfilled by filing the annual tax return. 

  • Since the introduction of the GST regime, the government has also made it compulsory to fulfill the annual GST return filing procedure. The annual GST return is filed through FORM GSTR-9.
  • The taxpayers having GST registration who need to file GSTR-9C and will be applicable for a GST audit, will need a lot of reconciliations. This will indeed entail due efforts from the end of both GST Auditor & GST Auditee. Evidently, this will imply much preparation for gathering details for the annual GST return.

Here are a few crucial points to be taken care of while filing GSTR-9C with respect to GST Audits:


#1. How to Ascertain the annual Turnover?

The basic details for filing both Form GSTR-9 & GSTR-9C such as the annual Turnover are entered on the basis of the GSTIN of the taxpayers.

  • There may be cases where multiple GSTINs (State-wise) registrations do exist on the same PAN. The entities present in multiple States have multiple GSTINs.
  • Such entities will have to derive their turnover internally based on the GSTIN. Similarly, they will derive the Input Credit and declare it.
  • Mostly, businesses having GST Registration exist across India but have a central accounting system in a single State. Hence, it is crucial to categorize their books of accounts on the basis of GSTIN much before they proceed for the filing of GSTR-9. This should be planned well in advance, as this is a lengthy process activity to be done by the GST Auditee.
  • Further, the above process is to be carried out even for companies with multiple GST registration within the state for submitting the reconciliation statement separately for each registration.


#2. How are the GST returns reconciled?

  • GSTR-9 & GSTR-9C are filed on an assumption that GSTR-1 & GSTR-3B will be in reconciliation with each other and so is for GSTR-2A & GSTR-3B. The data needed or the reconciliation required while annual return filing and the GST audit takes into account Financial Statements vis-à-vis GST returns filing.
  • In case of any mismatch in GSTR-3B & GSTR-1, the forms GSTR 9 & 9C do not have any mechanism to add or deduct these differences.

Hence, it is important for the GST Auditee to make sure that his GSTR -1 & GSTR -3B for all the months are in balanced with each other.


#3. What is the method for Accounting of all the GST transactions?

  • There are many transactions which are liable to GST such as a cross charge for inter-company services like annual audit fee incurred at head office (HO) for the audit of all other branches of the country, advertisement expenses incurred at HO.
  • Identification of such transactions under GST is a key aspect before GST audit.
  • Reconciliation of such transactions with financial statements is again a time-consuming process and hence needs to be planned well in advance prior to tax audit.


#4. What about the Amendments made during the year?

Since this is the first year of the GST regime, errors were inevitable in GST return filing process. Various steps have been taken on the part of taxpayers as to rectify these mistakes in the successive months' returns. For those who have rectified the errors in the returns filed after March 2018, the amendments have been taken into account while the returns filed during April- September 2018.


#5. How to record the amendments made during the year?

Auditee has to maintain a proper record of all the amendments he has made to transactions after March 2018. Even if rectification of a single transaction is not reported properly in Form GSTR -9 & GSTR -9C it will be the Auditee’s fault.  In case the reasons are untraced for these mismatches, the auditee will end up paying unnecessary GST tax.


If you need any sort of assistance regarding GST registration or GST return filing procedure, feel free to contact our business advisor at 8881-069-069.

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