The Annual Return in Form GSTR-9 for the FY 2017-18 has been amended vide Notification No. 74/2018 – CT dated 31st December, 2018 to increase the scope and make certain consequential and necessary changes to the Form released earlier. A brief analysis has been done below for ease of comparison, the possible reasoning and implications of the changes.

Changes in Form GSTR-9

  • Heading of Part II
    • “declared” substituted with “made”

Comments – The entire scope and substance of Form GSTR-9 has been changed by this amendment to the Form. This amendment indicates that the GSTR-9 can now be used to report or be filed after finalised and audited figures as per audited financial statements instead of reported figures in GST returns. This may also make the Form GSTR-9C lose some of its significance as it may now be merely a reconciliation statement between the annual return and financial statements.

  • Heading of Table 4
    • “as declared in returns” substituted with “made”

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Heading of Table 5
    • “as declared in returns” substituted with “made”

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Table 5F
    • “includes ‘no supply’” added in brackets

Comments – The ambiguity regarding where to include “no supply” transactions in Table 5 has been cleared by specifically including them under Non-GST supply. However, there is still no clarity regarding the transactions to be considered as “no supply”.

  • Heading of Part III
    • “as declared in returns filed” deleted

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Heading of Table 7
    • “as declared in returns filed during” substituted with “for”

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Table 8E
    • Removed “(out of D)”

Comments – Scope of reporting the ITC, which is available but not availed or ineligible, has been widened. Now, this reporting shall not be restricted only to GSTR-2A available and GSTR-3B filed during the year.

Changes in Instructions to Form GSTR-9

  • Instructions’ numbering starts from 1 instead of 18 in earlier format

Comments – This seems like a cosmetic change. However, it could have major implications if one assumes that in the earlier format, the continuation of the table serial nos. to the instructions meant that the instructions were a mandatory part of the main Form GSTR-9. Now, one may assume them to merely be a guiding factor.

  • Erstwhile Instruction No. 19 – “The details for the period between July 2017 to March 2018 are to be provided in this return” is deleted

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Instruction Nos. 2 & 3 are added
    • “2. It is mandatory to file all your FORM GSTR-1 and FORM GSTR-3B for the FY 2017-18 before filing this return. The details for the period between July 2017 to March 2018 are to be provided in this return.”
    • “3. It may be noted that additional liability for the FY 2017-18 not declared in FORM GSTR-1 and FORM GSTR-3B may be declared in this return. However, taxpayers cannot claim input tax credit unclaimed during FY 2017-18 through this return.”

Comments – This is a consequential amendment to ensure that the annual return is not filed before all the returns for the relevant period are filed. Possible reason for this requirement is the availability of final and updated data on the GST portal, as parts of the GSTR-9 form may be pre-filled.

Instruction No. 3 confirms the broadened scope of the GSTR-9 by stating that any additional liability which was not disclosed in the monthly returns should be disclosed in this Form.

However, additional ITC can not be claimed through GSTR-9, owing to the restriction imposed by Section 16(4) of the CGST Act.

  • Instruction No. 20 changed to Instruction No. 4 and so on.
    • “The details filled in Part II is a consolidation of all the supplies declared by the taxpayer in the returns filed during the financial year” substituted with “It may be noted that all the supplies for which payment has been made through FORM GSTR-3B between July 2017 to March 2018 shall be declared in this part”

Comments – Consequential amendment to give impact of change in scope as explained above. However, the substituted instruction seems to be drafted arbitrarily as it restricts the reporting only to supplies for which payment has been made through Form GSTR-3B.

  • Instruction for 5D, 5E and 5F
    • “The value of “no supply” shall also be declared here.” substituted with “The value of “no supply” shall be declared under Non-GST supply (5F).”

Comments – Consequential amendment in instruction to include “no supply” under Table 5F – Non-GST Supply.

  • Instruction for 7A, 7B, 7C, 7D, 7E, 7F, 7G & 7H
    • “If the amount stated in Table 4D of FORM GSTR-3B was not included in table 4A of FORM GSTR-3B, then no entry should be made in table 7E of FORM GSTR-9. However, if amount mentioned in table 4D of FORM GSTR-3B was included in table 4A of FORM GSTR-3B, then entry will come in 7E of FORM GSTR-9.” has been added

Comments – Details of disallowances under Section 17(5) are to be entered in Table 7E only if these amounts were included in the ITC available in Table 4A of the GSTR-3B.

Form GSTR-3B was programmed to exclude the amounts shown under “Table 4D – Ineligible ITC” from the total ITC shown under “Table 4A – ITC Available.” However, in the inceptive returns and some customised software, the taxpayer had the option to include or exclude the same.

  • Instruction to Table 8E & 8F has been split and amended
    • New Instruction for Table 8D – “Aggregate value of the input tax credit which was available in FORM GSTR2A (table 3 & 5 only) but not availed in FORM GSTR-3B returns shall be computed based on values of 8A, 8B and 8C. However, there may be circumstances where the credit availed in FORM GSTR-3B was greater than the credit available in FORM GSTR-2A. In such cases, the value in row 8D shall be negative.”
  • Amended instruction for 8E & 8F – “The credit which was available and not availed in FORM GSTR-3B and the credit was not availed in FORM GSTR-3B as the same was ineligible shall be declared here. Ideally, if 8D is positive, the sum of 8E and 8F shall be equal to 8D.”

Comments – The earlier instruction did not account for a negative balance in Table 8D on account of ITC claimed in GSTR-3B being higher than ITC available in GSTR-2A. This logic has been now considered and the instructions have been amended consequently.

  • Instruction No. 7 (formerly 23)
    • “declared in the returns of April to September” substituted with “paid in the Form GSTR-3B of April to September”

Comments – Consequential amendment to give impact of change in scope as explained above.

  • Instruction to Table 13
    • “However, any ITC which was reversed in the FY 2017-18 as per second proviso to subsection (2) of section 16 but was reclaimed in FY 2018-19, the details of such ITC reclaimed shall be furnished in the annual return for FY 2018-19.” has been added.

Comments – ITC reversed as per provisions of Section 16(2) during the FY 17-18 and subsequently reclaimed in the FY 18-19 on fulfilling the specified criteria is not required to be shown in Table 13 of annual return for the FY 17-18. This will be considered as a fresh claim of ITC in the FY 18-19 and shall be disclosed in the annual return for FY 18-19. 

  • Instruction to Table 17 & 18
    • “It may be noted that this summary details are required to be declared only for those inward supplies which in value independently account for 10 % or more of the total value of inward supplies.” has been added.

Comments – HSN wise summary of inward supplies was required to be given in the earlier format. This requirement has continued albeit with a supposed “relief” to the taxpayer by reducing the scope of data to be reported. The taxpayer shall only have to report the HSN wise summary of inward supplies for inward supplies valuing more than 10% of the total value of inward supplies.

  • Instruction No. 9 is added
    • “Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in this form, through FORM DRC-03. Taxpayers shall select “Annual Return” in the drop down provided in FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger only.”

Comments – This is a by-product of the expansion of scope of the annual return in Form GSTR-9. Since now, the actual liability for the year is to be disclosed in the annual return, there is a possibility that there may be an additional tax liability which needs to be paid while filing the annual return. This liability can be paid using Form DRC-03. One major setback here is that the last line of the instruction states that the additional liability can be paid only using cash. This implies that even if the taxpayer has a balance in the credit ledger, the additional liability in Form GSTR-9 can not be offset against the same.  

Disclaimer – The Author has tried to analyse the possible reasoning behind amendments made to the form based on our experience and understanding. We suggest you to avoid using this analysis as a base for making final decisions and ensure that all the provisions of the law are followed diligently while filing the returns. This document is only for information purpose and private circulation.

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