Goods and Services Tax – GST – By: – Saurav Patni – Dated:- 30-11-2018 Last Replied Date:- 10-12-2018 – Introduction Ever since GST came into prominence with effect from 1st July, 2017, there were several anticipations for the GST audit and its reconciliation with the annual return, including linkage of the same with the erstwhile VAT regime or the Income Tax Return/Tax Audit Report. Some of the additions in the Tax Audit Report were also opined and notified by the Government, so that the payments made under GST regime commensurate with the Income Tax & Account Books such as reconciliations in respect of turnover, expenditures incurred, ITC availed, etc., however the same has been kept in abeyance till 31st March, 2019 for the very reason of it being burdensome for the companies to compile the enhanced requirements for tax audit post the close of the accounting period and statutory audits. However amidst all such skepticism, the Government has recently introduced and notified the
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yze the Annual Return in depth to ensure better compliance and understand the essence of the Form as notified by the Council by virtue of Notification No. 39/2018-CT dated 04.09.2018. Annual Return As per section 44(1) of the CGST Act, 2017, every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. From this it can reasonably be implied that barring the following persons/taxpayers, all the taxpayers are required to file the Annual Return: Input Service Distributor Person paying tax u/s 51 (TDS) and u/s 52 (TCS) Casual Taxable Person Non-Resident Taxable Person The forms w.r.t Annual Return as notified by the Council is based on certain category of the taxpayers which i
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ay of default that prevails in not adhering to the deadline. Further, it is pertinent to note that the maximum fees that can be levied shall not exceed 0.25% of the total turnover in the respective state or union territory. As per the functionality of other returns prescribed under the Act, the Annual Return also, does not come with the option to revise, and hence, to connote, the Annual Return is a one-shot summarized return of consolidated figures for a particular Financial Year, with no recourse for revision. Therefore, the Annual Return is required to be dealt with utmost skepticism for the very reason that the same is the consolidated return based on the figures already stated in the erstwhile returns filed under this Act and will be cited by various stakeholders including auditors-both external and internal, tax authorities, etc. for taking reference in their dealings in matters relating to tax governance. The part-wise analysis of some of the important contents which has to be c
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ge mechanism (RCM) It is pertinent to note that B2B supplies unlike B2C supplies shall not be netted by Dr. / Cr. notes as the same is dealt separately under Table 4I and 4J. Further, the amendments made in this respect and reported in the returns shall not form part of this table and will be separately reported under Table 4K & 4L. Unadjusted Advances (Table No. 4F) It shall include all such advances on which tax has been paid in the current Financial Year but invoice has not been issued yet. Note that: the un-adjusted advances shall not be a part of Table 4A to 4E only those advances for which invoice is not been issued i.e. which remains unadjusted as at the end of the Financial Year are to be included. Inward Supplies liable to reverse charge mechanism (RCM) (Table No. 4G) It shall include all inward supplies (including advances and import of services, if any) received from registered/unregistered persons on which tax is paid by the recipient on reverse charge basis. Inward Sup
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considered as supply i.e. items which are specified under Schedule III of the CGST Act, 2017 like sale of land, etc. However, there is no specific table in the annual return to include such cases and is absolutely absurd to include the value of such activities in Table 5D to 5F. Therefore, ambiguity arises as to whether such transactions need to be inculcate in the stated tables or not which requires clarification by the Council. Total Turnover (including advances) (Table No. 5N) It shall include the sum total of: all the supplies on which tax has been paid or not including amendments, if any advances on which tax is paid but invoice is not issued in the current Financial Year but shall not include the value of inward supplies on which tax has been paid under RCM. 3. Part-III Details of ITC as declared in returns filed during the Financial Year Inward Supplies (Table No. 6B to 6D) Table 6B shall include: All inward supplies other than RCM Supply of services received from SEZs Table 6C
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ptember would now be lapsed and have to be booked as an expense resulting in loss of credit and profitability at the same time. Contrary to the said situation, it is not clear, whether a taxpayer can avail the eligible credit in excess of the credit specified in GSTR-2A or not as the difference in Table 8 would be shown as negative in such case. This is owing to the fact that the taxpayer may have availed the correct amount of credit based on the invoice but the invoice may not appear in the GSTR-2A. The matter requires clarity as the taxpayer cannot be made deprived of the eligible ITC. 4. Part- IV Details of tax paid as declared in returns filed during the financial year The details of tax payable and paid bifurcated into cash/credit utilization is required to be provided as is stated in the returns filed for the financial year. 5. Part- V Particulars of the transactions for the previous Financial Year declared in returns of April to September of current Financial Year or up to the d
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(Table No. 17 & 18) It shall include the rate-wise HSN summary of all inward and outward supplies during the Financial Year. It is pertinent to note that the HSN wise summary of outward supplies was required to be stated in GSTR-1, but the same was not segregated by the taxpayers in accordance with the GST rate. Further, the rate-wise HSN summary of inward supplies was never required to be stated in the monthly returns. Thus, it becomes all the more cumbersome to have such records prepared, update and reported in the Annual Return at the same time. From the aforesaid analysis, it is evident that GSTR-9 format i.e. Annual Return has ambiguities and interpretational issues which requires an overall insight before stating the same in the said return simply because, the format mandates new and vivid details which are not reasonably maintained by a common taxpayer and thus the compilation of the same is a time-consuming exercise. Further, it also clarifies the fact that any additional
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