A. Introduction

Section 44 of CGST Act mandates every registered person, except the following, to furnish an annual return for every FY electronically in Form GSTR-9 on or before 31 December following the end of Financial Year.

(i) An Input Service Distributor

(ii) A person paying tax under section 51 or section 52 of CGST Act 2017

(iii) A non-resident taxable person

In this article, an attempt has been made to analyse some of the issues in GSTR-9.

B. Background

Initially Form GSTR-9 was declared vide notification number 39/2018-CT, dated 04.09.2018. The heading of Pt-II of GSTR-9 reads as follows: –

Details of Outward and inward supplies declared during the financial year

Instruction no.22 to Form GSTR-9 reads as follows: –

Part II consists of the details of all outward supplies & advances received during the financial year for which the annual return is filed. 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.

Further instructions provided that various tables of Form GSTR-1 may be used for filling details in part 4A, 4B, 4C etc.

The Form GSTR-9 is amended vide notification number 74/2018-CT dated 31 Dec 2018. The revised heading of Pt-II of revised GSTR-9 reads as follows: –

Details of Outward and inward supplies made during the financial year

Instruction no.3 & 4 to revised Form GSTR-9 reads as follows: –

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.

4. Part II consists of the details of all outward supplies & advances received during the financial year for which the annual return is filed. 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. The instructions to fill Part II are as follows:

……..

It appears from the above that there is a conflict between instruction number 3 & 4 of GSTR-9. Instruction number 3 provides that additional liability not declared in Form GSTR-1 and GSTR-3B may be declared in this return whereas instruction number 4 provides that all the supplies for which payment has been made through Form GSTR-3B between July 2017 to March 2018 shall be declared in Pt-II.

C. Issues

Issue No.1: – Whether Annual Return is to be prepared on the basis of Audited Books of Accounts or on the basis of GSTR-1 & GSTR-3B

Question arises whether Annual Return is to be prepared on the basis of Audited Books of Accounts or on the basis of GSTR-1 & GSTR-3B. One school of thought says that since heading of Pt-II to Form GSTR-9 is ‘Details of Outward and inward supplies made during the financial year’ vis a vis earlier heading ‘Details of Outward and inward supplies declared during the financial year’, the annual return will be prepared on the basis of audited books of accounts. This school of thought also relies on the instruction number 3 of revised GSTR-9 which says that additional liability for the FY 2017-18 not declared in FORM GSTR-1 and FORM GSTR-3B may be declared in this return.

Another school of thought says that existing format of GSTR-9 will be prepared on the basis of GSTR-1 and GSTR-3B filed upto 30 Sep following the end of FY to which annual return pertains. This school relies on the fact that if a view is taken that GSTR-9 will be prepared on the basis of Audited Books of Accounts then what would be relevance of field number 4K, 4L, 5J, 5L, 10 & 11 of annual return. The details description of the said fields is as follows: –

Field No. Description of Fields
4K Supplies declared through Amendments (+) during the FY pertaining to transactions on which tax is payable
4L Supplies reduced through Amendments (+) during the FY pertaining to transactions on which tax is payable
5J Supplies declared through Amendments (+) during the FY pertaining to transactions on which tax is not payable
5L Supplies reduced through Amendments (+) during the FY pertaining to transactions on which tax is not payable
10 Supplies / tax declared through Amendments (+) (net of debit notes) during April to Sep subsequent to FY to which Annual returns pertains
11 Supplies / tax reduced through Amendments (-) (net of credit notes) during April to Sep subsequent to FY to which Annual returns pertains

According to second school of thought, if a view is taken that GSTR-9 will be prepared on the basis of Audited books of accounts then above field will become redundant.

It is evident from the above that both school of thought have its own arguments behind their contention. Thus, it is expected from the government that to clarify the above issue, a suitable clarification will be issued shortly. 

Issue No.2: – Scope of Pt-V of GSTR-9

Pt-V of GSTR-9 requires the following details: –

Heading: – Particulars of the transactions for the previous FY declared in returns of April to September of current FY or upto date of filing of annual return of previous FY whichever is earlier

Sr. No. Description Taxable Value Central Tax State Tax/UT Tax Integrated Tax Cess
10 Supplies / tax declared through Amendments (+) (net of debit notes)
11 Supplies / tax reduced through Amendments (-) (net of credit notes)
12 Reversal of ITC availed during previous financial year
13 ITC availed for the previous financial year

The above section requires more clarity. Field 5Q of GSTR-9C requires ‘Turnover as declared in Annual Return’. Instruction against field 5Q of GSTR-9C reads as follows: –

Annual turnover as declared in the Annual Return (GSTR 9) shall be declared here. This turnover may be derived from Sr. No. 5N, 10 and 11 of Annual Return (GSTR 9).

It is evident from the above that field 5Q of GSTR-9C also takes into consideration field number 10 & 11 of GSTR-9.

In view of the above, the following question arises: –

(i) A transaction of outward supply pertaining to FY 2017-18 omitted from GSTR-1 and GSTR-3B of FY 2017-18. The same was reported in April 18 GSTR-1 and liability also discharged vide GSTR-3B of April 2018. Whether the same will be reported in field number 4 of GSTR-9 along with field number 10 or only in field number 10. If the same would be included in both fields i.e. field number 4 of GSTR-9 along with field number 10 then turnover with respect to same will be counted twice.

(ii) A transaction of outward supply pertaining to FY 2017-18 omitted from GSTR-3B of FY 2017-18 however reported in GSTR-1 of March 18. The liability with respect to same was discharged vide GSTR-3B of April 2018. Whether the same will be reported in field number 10 of GSTR-9. If the answer is yes then in GSTR-9C, turnover with respect to said transaction will be counted twice i.e. taxable value already included in field number 4 and again included in field number 10.

(iii) Reverse charge liability of Rs.1800 on taxable value of Rs.10,000 pertaining to 2017-18 discharged during April 2018. As per instruction to field number 5Q to GSTR-9C, the said taxable value also become part of turnover as per GSTR-9. Whether the same will become reconciliation item.

D. Conclusion

Apart from the above, there are multiple more queries on which clarity is expected from the government. Either the government should issue a comprehensive circular with respect to various fields of GSTR-9 and GSTR-9C or should amend the form GSTR-9 for the benefit of various stakeholders. The last date for filing GSTR-9 is 30 June 2019 for 2017-18. It is expected that government will come out with a suitable circular/amendment very soon to address the issues of various stakeholders.

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3 Comments

  1. K.S.SHAH says:

    R/SIR,
    VERY DIFFICULT GSTR9 WITH MATCH GSTR2A DETA.YOU ARE RIGHT MANY PROBLEMS IN F.NO -9 AND 9C. GOVT.CLEAR THE MATTER ASAP,
    THANKS & REGARDS

  2. Rajesh Shirsat says:

    Sir,Only option is all details remain as per returns but any increase in liability over and above amendment etc. to be added in Table 4 & 5 accordingly. Only the government should come with proposal. but if the liability is shown excess then there is no provision to reduce, of if we reduce then no refund will get by the dealer. what is your views

  3. Rajesh Shirsat says:

    Sir,
    Only option is all details remain as per returns but any increase in liability over and above amendment etc. to be added in Table 4 & 5 accordingly. Only the government should come with proposal. but if the liability is shown excess then there is no provision to reduce, of if we reduce then no refund will get by the dealer. what is your views

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