Who is Eligible for GSTR 9 and 9C?

GST was implemented on July 1, 2017, marking a great transformation in the area of indirect taxation in India. It aimed at unifying goods and services into a single national market, thus abolishing the diverse tax systems that existed across the country. Under the motto “One Nation, One Tax,” GST unifies multiple taxes- the Central Excise Duty, Service Tax and Value Added Tax (VAT)- into one structure. A dual structure operates under a structure that permits both national and state governments to collect GST as one tax but divided into three: Central GST (CGST), State GST (SGST) and Integrated GST for interstate transactions.

As a destination-based tax, GST is, thus, levied at a consumption point rather than at the point of production and defines its operational structure. It is further divided into more tax slabs of 0%, 5%, 12%, 18% and 28% based on the classification of goods and services. Essential items are taxed at cheaper rates, while luxury or non-essential goods require high tax rates. Business entities are required to register under GST and file returns periodically. The GSTN website allows for easy compliance in digital format and, hence, prevents tax avoidance.

The benefits of GST include avoiding cascading taxes, effective supply chain efficiency, higher transparency and better management of businesses. However, despite facing some difficulties and complexities in its implementation process in the first place, it is an important reform that has standardised the system, increased governmental revenue and made the economic infrastructure stronger as a whole.

What is GSTR-9?

GSTR-9 is an annual return form under the Goods and Services Tax Act in India. It is just a summary of monthly and quarterly GST returns filed by registered taxpayers throughout the course of the fiscal year. It provides a comprehensive view of the taxpayer’s GST activities, including outward supplies, inward supplies, input tax credit paid, tax paid and any reconciliations or disparities that may arise during the year.

GSTR-9 was introduced in 2017. It is part of the larger GST framework used for auditing compliance and taxpayer well-being. It helps the government prevent and determine discrepancies between the figures stated and the actual ones in returns. The GSTR-9 is very important for learning about mismatches and mistakes and for rectifying discrepancies by the taxpayer.

The GSTR-9 is filed electronically through the official GST portal. It is governed by the provisions of Section 44 of the CGST Act, 2017 and Rule 80 of the CGST Rules, 2017.

Who Will File GSTR-9?

All the taxpayers enrolled for Goods and Services Tax (GST) who are included in their category as both regular taxpayers and those who switch out of the composition scheme have to file GSTR-9. It includes:

1. Suppliers of goods and services.
2. E-commerce operator, in any case.
3. Any person who requires himself to be eligible for GST.

Who Does Not Need to Furnish GSTR-9?

The following categories of taxpayers are exempt from furnishing GSTR-9:

1. Composition dealers who instead file GSTR-9A.
2. Input Service Distributors (ISDs).
3. Casual taxable persons.
4. Non-resident taxable persons.
5. Individuals who pay tax under Sections 51 (Tax Deducted at Source) or 52 (Tax Collected at Source).

The GSTR-9 will depend on the nature of the GST registration a person has. Normally, filing is obligatory for regular taxpayers on an annual basis. Sometimes, though, exemptions have been granted to those who may not even break the turnover threshold. Even small-scale businesses have benefited from being able to file their returns. Statutory provisions were passed over time and are putting different thresholds for exemption, such as instances with less than ₹2 crores annual turnover, which enables not filing for specific financial years by taxpayers.

Format of GSTR-9

GSTR-9 aims to bring together and aggregate all GST transactions of a taxpayer in any assessment year. The Form is divided into six sections dealing with various aspects of GST compliance such as basic information, tax liability, input tax credit, payment of taxes and reconciliation.

Part I – Basic Information

Tables 1-3 collect general data about taxpayers.

The GSTIN is the Goods and Services Tax Identification Number of the taxpayer which mentions the legal name of the entity and if available, the trading name and the Fiscal Year Indicates for which financial year the return is made.

PART II – Information on Outward and Inward Supplies Received During the Year

Table 4 contains the taxable supply data collated from monthly or quarterly returns (GSTR-1 and GSTR-3B). In this, the outward supplies, inward supplies, as well as the eligible reverse charges are included.

4A – outward supplies where tax is charged or levied except under reverse charge or exempt supplies.

4B – outward supplies are subject to reverse charge (for example, to unregistered persons).

4C – Exempt, Nil-rated and Non-GST Outward Supplies.

4D and 4E – Actual and deemed exports.

4F & 4G – Credit and debit notes and adjustment.

Table 5 refers to Outward exempt, nil-rated or classified as Non-GST supplies.

Part III – Input Tax Credit (ITC) Information

Table 6 of ITC available for the Financial Year – The ITC taken is on inward supplies, inputs, capital goods and services (sections 6A-6C). Sections 6D-6H show imported ITC, reverse charge mechanism and adjustments, if any.

Reversals or ineligibility of ITCs are shown in Table 7 – These comprise those reversals effected on violation of the prescribed regulations or non-eligible claims.

Table 8 deals with the reconciliation of ITC as per GSTR-2A (the auto-populated return) and the accounting records. It captures any variance between GSTR-2A and GSTR-3B.

Part IV – Information on Taxes Paid During the Financial Year

Table 9 is a statement of tax paid by any taxpayer. This comprises subject matters like amounts of taxes, interest, late fees and penalties in respect of several taxes like CGST, SGST, IGST and Cess. Tax classified on cash ledger use in respect of ITC.

Part V – Returns of the Previous Financial Year Declared in This Financial Year Returns

Tables 10-14 reflect the adjustments made in the return of the current year that affect the previous financial year. Tables 10 and 11 explain their supplies in the current year that antedate the last year. ITC adjustments from the previous year are discussed in Tables 12 and 13.

Part VI – Additional Information

A statement of refunds claimed and allowed during the year is shown in Table 15. It also contains a list of pending refunds along with the total amounts claimed, sanctioned and rejected. Details of tax demands and recoveries are given in Table 16. They include any tax demand raised and settled during the year. Table 17 provides a summary of outward supplies in terms of the Harmonised System of Nomenclature (HSN). Tax benefits relevant to items are defined according to suppliers under HSN codes. Table 18 presents the summary of the inflow of supplies on the grounds of HSN. This table is optional but assists taxpayers in providing further information concerning their purchases.

What is GSTR-9C?

GSTR-9C is a return form which mandatorily needs to be submitted along with the annual return form GSTR-9. The return becomes an audit report where details provided in GSTR-9 have a correspondence with the audited financial statements of the taxpayer for that particular fiscal year. Besides, it is alleged to prove that figures furnished in the GST return reflect the correct turnover, tax liabilities and other dimensions of business.

It is under sections 35(5) and 44(2) of the Central Goods and Service Tax Act, 2017, and Rule 80(3) of the CGST Rules, 2017, that GSTR-9C requirement is prescribed. This would be an exercise in the type styled matching of GST returns completed against audited taxpayer financial records.

There is confirmation by the auditor, so this audit shall be carried out by Chartered Accountant or Cost Accountant. In this way, it would prove very useful in monitoring more closely by having the huge taxpayers obey GST provisions and compliance overall and transparency.

GSTR-9C Applicability

GSTR-9C applies to the persons who have got registration under GST and have cumulative annual turnover more than an ascertained amount in any fiscal.

Applicability threshold. For the initial time, GSTR-9C was also mandatory for all taxpayers electing aggregate annual turnover above ₹2 Crore or more. Later on, the prescribed limit changed to ₹5 Crore, which has further been enhanced by amending the provisions, beginning said fees, applicable for all those financial years commencing from 2018-19 onwards. The annual aggregate turnover includes taxable turnover (both collected from intra-state and inter-state supplies), exempt supplies, export turnover, reverse charge to supplies, and other supplies pertaining to that fiscal year.

Who Needs to File GSTR-9C?

1. Regular Taxpayer Registered under GST.
2. Those who require reconciliation of GST with that of the audited financial statements.

Entities Exempt from Filing GSTR-9C

GSTR-9C is not required to be furnished by the following categories of taxpayers:

1. Taxpayers who have annual turnovers of less than ₹5 crores.
2. Taxpayers under composition scheme.
3. Input Service Distributors (ISD).
4. Casual Taxable Persons.
5. Non-Resident Taxable Persons.

The GSTR-9C is mainly divided into two parts:

Part A – Reconciliation Statement

This section requires adjusting the turnover reported by the taxpayer in GSTR-9 with the audited financial statements. It further provides for verification of tax liability, claiming of ITC and the corresponding payment done. Any income tax issue while doing reconciliation is also addressed.

Part B – Certification

A Chartered Accountant or Cost Accountant is needed to sign and certify the accuracy of the reconciliation in accordance with the GST regulations. The professional certifying has views about any discrepancies found.

Importance Of GSTR-9 And GSTR-9C

Importance of GSTR-9

1. It verifies that all the annual transactions are in compliance with the GST provisions.
2. It identifies and rectifies differences, errors or discrepancies in monthly and quarterly financial results.
3. It gives a detailed overview of tax liabilities, Input Tax Credits and amendments during the fiscal year, ensuring authenticity and transparency.
4. Every year, it prepares data in such a manner that audit becomes easy for the authorised person or the representative for GST audits.
5. For most registered taxpayers, the requirement is to justify tax returns as a statutory requirement.

Significance of GSTR-9C

1. The reconciliation ensures consistency between GST returns (GSTR-9) and audited books of accounts.
2. The Audit Certification serves as an independent utility for certifying tax compliance of larger entities.
3. Identify and rectify mismatches in turnover, ITC, and tax payments.
4. Increases transparency by offering authorities reliable financial and tax data, thereby raising confidence.
5. Legal compliance is observed as filing this return is compulsory for entities with gross receipts above ₹5 crores to facilitate effective tax management.

Conclusion

GSTR-9 and GSTR-9C are the core documents within the GST compliance ecosystem, presenting transparency, precision and accountability in tax reporting. While GSTR-9 encompasses all GST transactions within the taxpayer’s annual period, GSTR-9C is a reconciliation statement within which all GST returns are reconciled with the audited statements of accounts. Together, they create an error-aware environment, ensure compliance and prepare the company for audits that especially benefit businesses with high turnover. The important submission of these returns performed very accurately and timely saves businesses from penalties and, in addition, forms a robust compliance framework. They signify a taxpayer’s willingness to enter the country into the GST regime, which promotes trust and efficiency in the tax system.