GST Annual Return Filing - All You Need To Know

GST is a destination-based consumption tax which has been implemented in India w.e.f. 1.7.2017. The law is designed and implemented in India with an objective to automate the processes to avoid leakage of revenue, reducing the requirement of interaction between taxpayer and administration and higher responsibility of reporting of the transaction in a very detailed manner.

Returns that were required to be filed under GST Law

For this purpose government in its original framework required the filing of three returns monthly – GSTR 1, GSTR 2 and GSTR 3 by each registered taxable person through the GST common portal.

The reason for the failure of GSTR 2 and GSTR 3

However, because of technical glitches and under-preparedness of the IT infrastructure, it could not be possible to put in place filing of all these Returns. This was also owing to the fact that there were hue and cry in the initial phase of GST implementation where taxpayers were also grappling with the challenges of the understanding the substantial provisions of the law + making continuous compliance of the law.

GSTR 3B Introduced

There were always apprehensions as to whether the matching system on a real-time basis would be successful in India considering the experience of the various countries in the past and mammoth volume of business transactions in India. These apprehensions became reality where the common portal started crippling and the GSTR-2 and GSTR-3 could never virtually be introduced (except GSTR-2 filing requirement for the month of July). Realizing various challenges faced by the industry, the Government attempted to simplify the process of filing the return and introduced the stop-gap arrangement of filing GSTR-3B instead of GSTR-2 and GSTR-3.

The objective behind the introduction of GSTR 3B to

HSN wise details of input tax credits availed for inputs, services and capital goods is required to be disclosed based upon these criterias

  • Get the details of the transactions in the summary manner.
  • Avoid the transaction level reporting especially on the purchases(inward supply side).
  • Waive off the requirements of the matching of input tax credits with the corresponding outward supply reported by the vendors.

Final Returns to file under GST

Finally, the compliance requirement has been in the form of filing of GSTR-1 and GSTR-3B. Though, there have been frequent extensions in the filing of returns and waiving of the late fees and subsequent reduction therein.

The Practical Scenario in India

Being the first year of implementation, it has been felt and observed that the focus of everyone has been on the filing of returns without much care as to the sanctity of the data. The taxpayers were more concerned with the filing the returns without much focus as to whether all disclosure requirements have been made as required under the law.
Frequent amendments in the law also led to the confusion resulting in less than perfect fling of the Returns. There was no mechanism available for validating the data especially input tax credits due to abandoning of the GSTR-2 requirement.

Annual Returns Introduced

Everyone had the option of Annual Return in mind where it was thought that any mistakes occurred in the periodical returns could be corrected through Annual Return though without knowing much as to the contents and methodology to file the Annual Return.

Official Notification for Annual Returns Released

It has been a long wait for the release of the format of Annual Return. Finally, the Government had released the format of Annual Return vide Notification No. 39/2018-Central Tax dated 04.09.2018.

What is Annual Return under GST?

Annual Return is the return that is required to be filed annually for every financial year by the eligible registered person, except a few specified categories of persons.
It is a summary statement containing all the transactions occurred and reported in the periodical returns filed during the financial year. Further, it also captures the adjustments made to the transactions of the previous year after the end of the year. It is also the last option available with the assessee to disclose all transactions pertaining to the period of filing. Thus, we can say Annual Return is very comprehensive return.

Who is required to file the Annual Return under GST?

As per section 44 of the CGST Act, Every registered person is required to furnish an annual return for every financial year except a few categories of persons as provided in section 44(1).
Hence, there is a need to file the Annual Return by every registered person including the person paying tax under the composition scheme under section 10 of the Act.

Are there any exceptions to the filing of Annual Return?

There is no requirement to file the Annual Return by –

  • An Input Service Distributor (ISD)
  • A person paying tax under section 51 or section 52 (TDS / TCS)
  • A casual taxable person and (CTP)
  • A non-resident taxable person (NRTP)

Note: Every electronic commerce operator who is required to collect tax at source (TCS) in terms of section 52 is required to file an annual return in form 9B (which is not notified yet).

How are the annual returns to be filed? Online or Offline?

The annual return is to be filed electronically in such form and manner as may be prescribed by law.

What are the forms for filing the Annual Returns?

Rule 80 of the CGST Rules lays down the manner in which Annual Return is required to be filed by the registered persons.

  • Every registered person who is required to file Annual Return under section 44 shall file it electronically in FORM GSTR-9 through the common portal.
  • In case of a person paying tax under composition scheme under section 10, the Annual Return has to be filed in Form Form GSTR-9A
  • E-commerce operator who is required to collect the tax under section 52 shall file Annual Return in the Form GSTR-9B .

What is the due date for filing Annual Returns?

As per section 44 of CGST Act, Annual returns must be filed on or before the 31st day of December following the end of the financial year, for which the return is being filed for all category of taxable person.
31st March 2019(now extended)for the filing of FY 2017-18 annual returns.

What are the Consequence of non-filing or failure to submit the annual return?

One or more of the following can be the consequences of not filing Annual return-

  • 1.Receipt of notice u/s 46 to file the return within 15 days.
  • 2.Late fee for non-filing or filing after due date shall be applicable u/s 47(2), being lower of
    1. Rs.100 per day during which such failure continues or
    2. 0.25% of turnover in the state or union territory.

    Note: The same late fee would also be applicable for SGST, whereby the total penalty for the registered person will be double the above amount.

  • 3. General penalty up to Rs.25,000 could be applicable as per section 125 of the Act.

What is the Official Notification Number for the Annual GST Return Format?

The Government had released the format of Annual Return vide Notification No. 39/2018-Central Tax dated 04.09.2018.

What is the basis for the preparation of Annual Returns?

The basis of preparation of Annual Return is GSTR-1 and GSTR-3B filed during the year. Some of the fields in the Annual Return are auto-populated from the data available in the common portal. Auto-populated data is based on the periodical returns filed by the registered persons. Whereas, most of the other details will be furnished by the registered person at the time of filing of Annual Returns.

Can Annual Returns once file can be revised/amended subsequently?

The Option of amendment of Annual Returns has not been provided under section 44 or rule 80. Thus, it appears that once the annual returns is filed, it would be considered as final and no further amendment would be possible.

Are there any documents that need to be submitted along with the Annual Returns?

The requirement to submit documents does not depend upon the filing of Annual Returns. Rather, it is linked to the applicability of getting your accounts audited. In GST liability for audit is governed by section 35(5) of the CGST Act 2017. As per the section, every registered person whose turnover during the financial year exceeds Rs 2 crore shall get his books of accounts audited.

Further, as per Section 44 (2) of the Act, every person who is required to get his accounts audited shall furnish the Annual Return along with the following documents-

  • Copy of audited annual accounts and
  • A Reconciliation Statement reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.

Is every person required to file annual return required to get GST Audit done?

Filing of Annual return is not linked with the GST Audit. In other words, a person having an aggregate turnover less than Rs. 2 crores though may not be required to get the accounts audited, but is required to file the Annual Return.

How many Annual Returns need to be filed by an organization having multiple GSTIN’s?

All registered person except mentioned in section 44(1) of the CGST act are required to file annual returns. A person having multiple GSTINs shall be considered a distinct person for each GSTIN. Which means, he needs to file Annual Returns separately for each GSTIN. For Example, A company having 25 registrations across different states in India, would be required to file 25 Annual Returns for the Financial Year 2017-18.

GST annual Returns
CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.