Annual Returns for F.Y. 20 - 21

[Kaustubh Karandikar]

XYZ’s turnover in the F.Y. 2019 – 20 was more than ₹ 5 crores and therefore they had filed Annual Return GSTR – 9 and GSTR – 9C. In the Financial Year 2020 – 21 their turnover was less than ₹ 2 Crores. Are they required to file Annual Return GSTR – 9 and GSTR – 9C for Financial Year 2020 – 21?

[Shilpi Jain]

Since the turnover is not more than 2 crores no requirement of GSTR-9 and 9C

[KASTURI SETHI]

Dear Sir,

GSTR-9 and 9 C are not required to be filed, turnover being less than two crores in the previous year.

In this context, if we peruse all the relevant notifications, rules and circulars on this issue we find that the word, 'financial year' is prefixed by 'a' and not by 'the preceding'. However, it is natural that balance sheet (including P & L Account)/trial balance sheet/annual reports are prepared after completion of a financial year. The Annual Returns in GST are based on these statutory records/accounting records maintained during the previous year

In view of the above reasoning, the turnover for the previous year is the basis/criteria for filing/not filing Annual Returns..

[HITESH DEDHIA]

If ITC availed in GST return not matches with the ITC as per books of Account (As per Books HIgher amount then Claimed in GSTR-3B) due to Rule 16 of GST.

Whether in such situation GSTR-9 is required to file to show that ITC of Current FY is claimed in Next GSTR-3B.

[ARVIND JAIN]

We always prefer to file GSTR-9, even though no compulsion as per Act, As I personally feel it is some kind of trap by the govt/department to cover up the situation as specified by Shri Hiesh Dediyaji and may disallow such c/fd credits. So its up to you if no changes all fine then don't file and any correction than GSTR-9 is the way to show the authority before they come with any notice or ask for clarification.

[KASTURI SETHI]

I agree with Sh.Arvind Jain,an expert except the words, 'kind of trap'. The word, 'trap' conveys negative message. The purpose of Annual Returns is to safeguard revenue. So it is constitutional measure as per the Act and not 'trap'.

[ARVIND JAIN]

Noted, Kasturi Sir thanks for the suggestion.

Not justifying my stand but the view/feeling came to my mind when Govt allows and publishes so much on ease of doing business that you don't file this GSTR-9 and every client comes with feeling that now we don't have to file and do this.

I again apologise for my words.

[KASTURI SETHI]

ShArvind Jain Ji,

Sir, it was not my intention that you should apologize. I liked your views/thoughts/feelings. Just saying that the word was misfit.Nothing else. I have great regard for your knowledge on tax matters as well as high level of drafting.

Thanks & regards,

Yours sincerely,

K.L.SETHI.

[Ganeshan Kalyani]

In my view, the taxpayer who don't have to file return due to threshold exempt, the auto drafted GSTR-9 is considered as filed.

[KASTURI SETHI]

Yes, Sir. It will be considered as filed as per GST laws.

[KASTURI SETHI]

Here is notification in support of the reply of Sh.Ganeshan Kalyani Ji.

Annual return - Filing of Annual return under Section 44(1) of CGST Act for FY 2017-18 and 2018-19 optional for small taxpayers having aggregate turnover less than 2 crore rupees and who have not filed the return before the due date

In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of the Council, hereby notifies those registered persons whose aggregate turnover in a financial year does not exceed two crore rupees and who have not furnished the annual return under sub-section (1) of section 44 of the said Act read with sub-rule (1) of rule 80 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules) before the due date, as the class of registered persons who shall, in respect of financial years 2017-18 and 2018-19, follow the special procedure such that the said persons shall have the option to furnish the annual return under sub-section (1) of section 44 of the said Act read with sub-rule (1) of rule 80 of the said rules :

Provided that the said return shall be deemed to be furnished on the due date if it has not been furnished before the due date.

[Notification No. 47/2019-C.T., dated 9-10-2019] as amended vide [Notification No. 77/2020-C.T., dated 15-10-2020]

[Shilpi Jain]

Incase the GSTR-9 is not file because it is optional the auto drafted GSTR-9 cannot be considered as the GSTR-9 of the assessee.

the circular or the clarification by the department does not bring this.

The clarification only states that it it is Deemed to have been filed. It does not state that what is auto drafted would be considered as the GSTR-9

[Shilpi Jain]

Also in my view the aggregate turnover has to be seen for the year for which the annual return is to be filed. Merely because the financials would not be available cannot be reason to take the preceding financial year turnover since the statute does not use the word ' proceeding' expressly inthe said provision

[Shilpi Jain]

Also in the context of e-invoice provisions, which initially used preceding financial year, they had to amend it to state that any of the preceding financial years from 2017-18 would be considered.

in this backdrop 'a' financial year if we assume should include preceding financial year then it can be any of the financial year since which FY is not mentioned. However, that does not seem to be the intention.

[Shilpi Jain]

In case where credits of previous financial year availed in this year or credits of this financial year availed in next financial year, etc, which leads to some differences between returns and books of accounts, and if in case GSTR-9 is optional you could also consider making an intimation to department in this regard and not file GSTR-9

[ARVIND JAIN]

I differ my view from respected Shilpi Jain madam on the following two points:

1. Why file Intimation in an informal way when you have the option to file GSTR-9 in formal way. Your option can be considered only when the date of filing is gone and we realise the mistake afterwards.

2. Agree with the viewpoint of Ganeshan Kalyaniji & Kasturi Sir that Auto drafted GSTR-9 would be considered as filed and you yourself stated that The clarification only states that it it is Deemed to have been filed* and it means they have to assume some figure in return as per auto-drafted and can not consider NIL -or figure as requested by us at the initiation of any proceeding. However later on any clarification to the department may be considered but the base will be the auto-drafted figure.

Other views of mam seem to be at par with my view.

Clarification: I am just expressing/matching views of others from my limited knowledge and may not be correct always.

[KASTURI SETHI]

Sh.Arvind Jain Ji,,

Sir, I agree with your views except the words, "from my limited knowledge". It is your humbleness and greatness.

[Shilpi Jain]

The only reason why I mentioned not to file gstr9 if it is optional is because it gets into the system and the data analytics many times leads to further dept questioning... an intimation letter is a silent way of intimation.

AI Summary

Annual return threshold: GSTR-9 optional below prescribed turnover; consider filing to reconcile ITC differences and portal drafts.
Whether GSTR-9 and GSTR-9C must be filed depends on aggregate turnover in the financial year for which the return is due; if turnover does not exceed the prescribed threshold, filing is not mandatory. Notifications provide optional procedures for small taxpayers and may treat returns as deemed filed; debate exists on whether an auto-drafted portal return equals taxpayer filing. Practitioners advise voluntary filing where ITC or book-return mismatches exist, while others recommend a written intimation when filing is optional to avoid data-analytics scrutiny.