The Union Budget 2021 has come up with important amendments with regard to the filing of annual return and reconciliation statement under Goods and Services Tax (i.e., GST). As per the amendment, GST annual return and reconciliation statement can be submitted on a self-certification basis. Accordingly, post Budget approval, certification of chartered accountant/ cost accountant will not be required.

The present article briefly explains the present and proposed amendments carried out in the matter.

Current provisions related to certification of annual return and reconciliation statement under GST

Provisions of section 35(5) of the Central Goods and Services Tax Act, 2017 states that-

  • Every registered person, exceeding the aggregate turnover of INR 2 Crores in a financial year, is mandatorily required to get the accounts audited by either the chartered accountant or the cost accountant.
  • Such registered person is required to submit the following documents-
    • Copy of audited annual accounts,
    • Reconciliation statement in Form GSTR-9C, and
    • Any other prescribed documents.

Further, provisions of section 44 of the Central Goods and Services Tax Act, 2017 states that-

  • Every registered person (other than a casual taxable person; input service distributor; person deducting TDS; person collecting TCS and a non-resident taxable person) should furnish the GST annual return in Form GSTR-9 within 31st December of the succeeding the end of the respective financial year.
  • Every registered person, liable to get the accounts audited as per provisions of section 35(5), should furnish an annual return in Form GSTR-9 along with the copy of audited annual accounts and reconciliation statement.

Budget 2021 proposal with regard to self-certification of annual return & reconciliation statement under GST

With regard to GST audit, annual return and reconciliation statement, the Union Budget has proposed the following two amendments-

  • Provisions of section 35(5) of the Central Goods and Services Tax Act, 2017 are proposed to be omitted; and
  • Section 44 of the Central Goods and Services Tax Act, 2017 is entirely substituted. The substituted provisions state as under-
    • Every registered person (other than a casual taxable person; input service distributor; person deducting TDS; person collecting TCS and a non-resident taxable person) shall furnish an annual return.
    • The annual return may include-
      • Self-certified reconciliation statement, and
      • Audited annual financial statement.
    • The commissioner is now empowered to exempt any class of registered person from filing of an annual return.
    • Filing of an annual return will not apply to the following categories of the registered person provided the books of account of such person are audited by the Comptroller and Auditor-General of India/ an auditor appointed for local authorities-
      • The Central Government,
      • The State Government, or
      • The local authority.

Briefly understanding the effect of proposed amendments-

As we know, filing of an annual return under GST has gone through various tough phases like format changes; changes in mandatory filing requirement; various due date extension etc.

Basically, the above provisions are proposed to be amended with a view to ease up the filing of the GST annual return and reconciliation statement. The following can be concluded from both the above proposed amendments-

  • As a result of the omission of provisions of section 35(5), there will be no requirement of getting the books of accounts audited either by the chartered accountant or the cost accountant.
  • Secondly, the substituted section 44 clearly states now only self-certification of reconciliation statement in Form GSTR-9C is required. Earlier the same also required certification either by the Chartered accountant or the cost accountant.
  • Post approval, GST annual return should be accompanied by a self-certified reconciliation statement.

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