Businesses are urgently striving to align their revenue and Input Tax Credit (ITC) for the fiscal year 2022-23, with the objective of making essential modifications in their financial records and GST reports before the October 2023 cutoff. The process reaches its peak with the complete submission of data via GSTR-9 and GSTR-9C for every fiscal year. GSTR-9 compiles data from GSTR-1 and GSTR-3B, whereas GSTR-9C reconciles the turnover and ITC claimed in GST returns with the taxpayer’s financial accounts. These filings are essential documents that GST authorities examine to identify any inconsistencies, which may result in scrutiny or demand notices under GST regulations. The precision of these files is crucial for businesses to adhere to GST regulations and maintain accuracy in their financial reporting.
Applicability of GSTR-9
Apart from some specified categories, all entities registered under the Goods and Services Tax (GST) are required to submit the GSTR-9 form.
- Taxpayers who are obligated to file GSTR-9A under the composition scheme.
- Informal taxpayers
- Service Distributors
- Non-resident individuals or entities who are subject to taxation.
- Individuals who are making Tax Deducted at Source (TDS) payments in accordance with section 51 of the Central Goods and Services Tax (CGST) Act.
- Entities that gather Tax Collected at Source (TCS) in accordance with section 52 of the Central Goods and Services Tax (CGST) Act.
Turnover Limit and GSTR-9
Although the GST law does not explicitly state a turnover threshold for GSTR-9, the provision of making it voluntary for firms with a turnover of up to Rs. 2 crores from FY 17-18 onwards was intended to alleviate the compliance difficulties for smaller organizations.
GSTR-9 filing deadline.
The deadline for submitting GSTR-9 for a fiscal year is scheduled for December 31st of the following year. Businesses are required to submit GSTR-9 for the financial year 2022-23 no later than December 31, 2023.
GSTR-9 Requirements
GSTR-9 consists of six parts and nineteen sections, each requesting specific information that can be easily obtained from previously submitted returns and accounting data. Essential elements comprise:
- Yearly revenue, differentiating between cases that are subject to taxation and those that are not.
- The annual amount of incoming supplies and utilized Input Tax Credit (ITC)
- Categorization of purchases into inputs, input services, and capital products
- ITC details to be revoked owing to ineligibility.
Penalties and Late Fees
The late submission of GSTR-9 attracts different late costs depending on the turnover categories. The late fees imposed starting from FY 2022-23 are as outlined below:
- For businesses with a revenue of up to Rs. 5 crores, the daily tax rate is Rs. 50 (Rs. 25 for both CGST and SGST).
- For a turnover exceeding Rs. 5 crores but not exceeding Rs. 20 crores, the daily charge is Rs. 100 (Rs. 50 for both CGST and SGST under the respective Acts).
- If the turnover exceeds Rs. 20 crores, the daily tax liability is Rs. 200 (Rs. 100 each under the CGST and SGST Acts).
The CBIC launched an amnesty scheme that provided forgiveness of late costs exceeding Rs. 20,000 (Rs. 10,000 each under the CGST and SGST Act) for delayed filing of GSTR-9 between the years 2017-18 and 2021-22. This waiver was applicable if the filing was done between April 1st, 2023, and June 30th, 2023.
Advantages of GSTR-9 Filing with Clear GST
Clear GST provides a variety of features that ease and guarantee accurate filing:
- Effortlessly obtain GSTR-1, 2A, 3B, and 9 data for many clients with a single click, in a matter of minutes.
- Automated population of different GSTR-9 tables by extracting information from GSTR-3B, GSTR-1, and GSTR-9.
- AI-powered reconciliation solutions for efficient comparison of Table 8A and 2A with purchase registers
- Comprehensive analyses comparing GSTR-3B with 2A and GSTR-3B with 1 reconciliation.
- A comprehensive audit trail at the invoice level to ensure diligent record-keeping.
- Swift data import into Clear Tax can be facilitated by using the Tally plug-in.
- Automated calculation of external HSN summary and invoice-level comparison with GSTR-1
- Simplify the process of uploading and organizing data for GSTN using ClearTax Assistant for GSTR-9.
How to File GSTR-9 using Clear GST Software
Clear GST offers a streamlined procedure for submitting GSTR-9:
- Make use of the accompanying white paper, which is a detailed guidance that guarantees accurate filing without any mistakes.
- Adhere to the checklist provided in the white paper to ensure precise filing of GSTR-9.
Overview of Applicability of GSTR-9C
- Threshold Applicability: Businesses having an annual revenue exceeding ₹2 crores are subject to the GSTR-9C reconciliation statement in the Indian Goods and Services Tax (GST) system. Larger businesses are the focus of this obligation, which makes sure they follow thorough reconciliation processes.
- Exemptions: Some organizations, such as input service distributors, taxable persons who are not residents or casual taxpayers, and those who use the composition system, are not required to file GSTR-9C forms. These exclusions acknowledge the variety of corporate structures and the range of complexity within them.
- Reconciliation Goal: The data submitted in annual GST returns (GSTR-9) and audited financial accounts are crucially aligned when it comes to GSTR-9C. The goal of this procedure is to find and fix any differences or inconsistencies between these two sets of documents.
- Error detection: It makes it easier to spot situations when taxes are paid in excess or below what is required, which helps to ensure that tax returns are accurate and transparent. It improves overall compliance by identifying errors and inconsistencies by comparing financial records with GST returns.
- Transparency and Accountability: By disclosing the causes of discrepancies between financial statements and GST returns, the reconciliation statement raises the legitimacy of a taxpayer’s financial records. Accountability is encouraged by this transparency, which also guarantees more accurate reporting in upcoming fiscal years.
- Meticulous Filing Requirement: Since any discrepancies found during the reconciliation process need to be fixed and properly disclosed in the statement, filing a GSTR-9C requires paying strict attention to detail. In this process, accuracy is crucial to ensuring compliance and avoiding penalties.
- Overall Impact: In order to guarantee correct reporting, transparency, and compliance within the GST framework, the implementation of GSTR-9C largely impacts larger firms. By promoting accuracy and accountability, it serves as a tool to close the gap between financial statements and GST returns, which benefits both taxpayers and regulatory bodies.
Conclusion
Comprehending and complying with the GSTR-9 and GSTR-9C obligations for the 2022-23 fiscal year is of great importance for enterprises in India operating under the GST system. The yearly return and reconciliation statement are crucial for combining financial and tax data. Adhering to these regulations not only ensures compliance with legal responsibilities but also provides protection against potential scrutiny and demand notices from GST authorities.
Precise comprehension of the relevance and deadlines of these documents is crucial, as failure to meet the specified dates may lead to the imposition of late fees and penalties. An in-depth examination of the GSTR-9 and GSTR-9C tables reveals precise information that needs to be submitted with accuracy. The tables must provide accurate reporting, which is essential for guaranteeing compliance and the smooth continuation of corporate activities.
