Introduction

Navigating the Goods and Services Tax (GST) landscape in India involves not only understanding the initial registration process but also keeping abreast of ongoing compliance requirements. For businesses registered under GST, adhering to annual compliance obligations is crucial to maintaining legal standing and avoiding penalties. This article delves into the yearly compliance responsibilities that GST-registered businesses face, including filing annual returns and undergoing audits.

Understanding Annual Compliance Requirements for GST

Under the GST framework, annual compliance is a critical aspect that ensures businesses correctly and transparently report their yearly financial transactions. This compliance includes the submission of annual returns and, for certain businesses, the requirement of a GST audit.

Annual Returns: GSTR-9

Who needs to file?

  1. Regular Taxpayers: All businesses registered under GST, except those opting for the GST Composition Scheme, are required to file an annual return using Form GSTR-9.
  2. Composition Scheme Taxpayers: These taxpayers have a simplified annual return, Form GSTR-9A. However, the requirement to file this form has been waived for financial years up to 2019–2020.
  3. SEZ Units and Developers: Special Economic Zone (SEZ) units and developers must file GSTR-9B.

Deadline for Filing

The deadline for filing GSTR-9 is on or before December 31st of the year following the financial year under review. For example, for the financial year 2022-2023, the GSTR-9 should be filed by December 31, 2023.

Details Required

The GSTR-9 form requires detailed information, including:

  • Total value of inward and outward supplies.
  • Input Tax Credit (ITC) was availed of and utilized during the year.
  • Details of the tax paid.
  • Declarations regarding any amendments to the supplies previously declared.

GST Audit: Form GSTR-9C

Who Needs to Undergo GST Audit?

A GST audit is mandatory for every registered taxpayer whose aggregate turnover exceeds ₹2 crore in a financial year. This audit is to ensure the accuracy of information furnished in the GSTR-9 form and to assess compliance with GST laws.

Audit Process

  1. Appointment of an Auditor: The audit must be conducted by a Chartered Accountant or a Cost Accountant appointed by the business.
  2. Preparation of GSTR-9C: The auditor prepares a reconciliation statement in Form GSTR-9C, comparing the values declared in the annual return with the audited figures of the annual financial statements.
  3. Submission: The GSTR-9C must be certified by the appointed auditor and filed along with the annual return.

Deadline for Filing

Similar to the annual return, the deadline for filing GSTR-9C is December 31st of the year following the financial year under audit.

Key Considerations for Compliance

  • Record-keeping: Businesses must maintain accurate records of all transactions to ensure that the information reported in the annual returns and the audit (if applicable) is accurate.
  • Amendments and Corrections: Any discrepancies identified during the preparation of the annual return or the audit process must be rectified promptly to avoid penalties.
  • ITC Reconciliation: Businesses must reconcile their input tax credit with the records of their suppliers to ensure that the credit claimed matches the GST paid on inputs.
  • Professional Guidance: Given the complexities associated with GST filings and audits, seeking professional advice or assistance from qualified tax consultants or accountants is advisable.

Conclusion

Annual compliance under GST is an essential element of the tax framework, ensuring transparency and adherence to tax regulations by businesses operating in India. By diligently fulfilling these requirements, businesses not only uphold their legal obligations but also contribute to the integrity of India’s tax system. Understanding and preparing for these annual obligations can significantly ease the compliance burden and mitigate the risk of non-compliance penalties.

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