The principal source for preparing GSTR-9 will be GSTR-1 and GSTR-3B returns. All information must be cross-checked with the books of accounts before declaring in the annual returns. Broadly, the form entails the declaration of annual sales, bifurcating it between the cases subject to tax and cases not subject to tax. On the purchase side, the annual value of inward supplies and ITC availed thereon, classified as inputs, input services and capital goods and the ITC to be reversed due to ineligibility.
GSTR-9 is divided into six parts. Here is a comprehensive list of what needs to be declared and from where one can fetch the information.
Primarily, certain transactions are not reported in the GST returns, but these affect the tax liability at the end of the annual period. Supply without consideration and goods sent on approval basis to name a few. One of the popular ones being the deemed supplies where taxpayers have sent inputs or capital goods to the job workers and have not received them by one or three years respectively.
Although no clarity is obtained regarding the treatment of any additional liability arising due to mismatch or ITC identified as available but not declared in periodic returns, it is advisable that the liability so is identified, be paid before filing annual returns. Hence, the annual returns must be prepared as per the GSTR-1 and GSTR-3B on an ‘as is’ basis.
GST is a value added tax (Indirect tax) levied on manufacture, sale and consumption of goods and services. GST offers comprehensive and continuous chain of tax credits from the producer's point/service provider's point upto the retailer's level/consumer’s level thereby taxing only the value added at each stage of supply chain. The supplier at each stage is permitted to avail credit of GST paid on the purchase of goods and/or services and can set off this credit against the GST payable on the supply of goods and services to be made by him. Thus, only the final consumer bears the GST charged by the last supplier in the supply chain, with set-off benefits at all the previous stages. Since, only the value added at each stage is taxed under GST, there is no tax on tax or cascading of taxes under GST system.
India has adopted a dual GST which is imposed concurrently by the Centre and States, i.e. Centre and States simultaneously tax goods and services. Centre has the power to tax intra-State sales & States are empowered to tax services. GST extends to whole of India including the State of Jammu and Kashmir.
GST return has to be filed by everyone having GST registration irrespective of business turnover or profitability in a month. Hence, even if there were no invoices issued during a month, the taxpayer must login to the GST Portal and submit a NIL return. If NIL return is not filed, a penalty of Rs.100 per day is applicable until the filing is complete. Hence, all taxpayer having GST registration must submit NIL GST return before the deadline.
Also you won’t be able to file succeeding month’s return if GST returns of previous months are not filed. So, it is mandatory to file GSTR-1 as well as GSTR-3 even if there is no sales transaction in a particular month or quarter.
GST officers have started sending scrutiny notices to companies whose tax payment did not match the final sales return or whose final sales return GSTR-1 did not match GSTR-2A, which is a purchase return auto-generated by system from his seller's return.
Therefore, if your GSTR-3B is not reconciled with GSTR-1 then there are good chances that you are going to be the next target of GST department. Also, if you are purchasing fake bills to take ITC from fake vendors without actual supply of goods or service and that fake vendor has entered the transaction in his GSTR-1 based on which you have taken the credit in your GSTR-2A but tax has not been deposited by that person in his GSTR-3B then in that case also you are going to receive GST notice. Thus it is advisable to avoid any bogus transactions just for a little gain.
After filing of form GSTR-9 and GSTR-9C, department will reconcile your annual returns with monthly or quarterly returns based on which notice will be issued and departmental audits will be conducted.