Circular No.ES/85/2019-20 July 4, 2019
To: Members of the Council
Sub.: Clarification regarding Annual Returns and Reconciliation Statement
Dear Member,
The Ministry of Finance has issued a Press Release on 3rd July, 2019 clarifying issues regarding Annual Returns and Reconciliation Statement.
As you may be aware, GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is for composition taxpayers, while GSTR-9C is a reconciliation statement.
The Union Ministry of Finance has said that businesses need to mention any mismatch in Goods and Services Tax (GST) monthly sales return and outward supply details in the annual return form and due taxes should be paid.
While giving clarification on annual returns and reconciliation statement the Ministry has received queries from businesses asking whether the primary source of data for the filing of the annual return and the reconciliation statement should be GSTR-1, GSTR-3B or books of accounts.
Please be informed that GSTR-1 form defines an account of details of outward supplies while GSTR-3B form summaries of all transactions are declared and payments are made.
Information in Form GSTR-1, GSTR-3B, and books of accounts should be synchronous and the values should match across different forms and the books of accounts. If the same does not match, there can be broadly two scenarios, either tax was not paid to the government or tax was paid in excess.
In the first case, the same shall be declared in the annual return and tax should be paid, and in the latter, all information may be declared in the annual return and refund (if eligible) may be applied through Form GST RFD-01A.
Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any (Input Tax Credit) ITC, they may do the same through Form GST DRC-03 separately.
If a taxpayer has not paid, short paid or has erroneously obtained / been granted a refund or has wrongly availed or utilised ITC then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty will be levied on such taxpayer.
Therefore, in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time. The annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made.
The last date for filing an annual return is August-end.
For further clarification on the issue, please refer the Press Release.
Members are requested to kindly file their Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) before the last date of filing, i.e. 31st August, 2019.
Thanking you,
Yours faithfully,
S.BALARAJU
EXECUTIVE DIRECTOR
