GST Audit and Annual Return provisions effective

GST Audit and Annual Return provisions effective from 1st August 2021

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GST Audit and Annual Return provisions effective from 1st August 2021

With the following three notifications, recently issued by CBIC, the GST provisions with regard to an annual return is completely changed. The new provisions are effective from 1st August 2021-

Notification number and date Particulars of the notification
29/2021- Central Tax dated 30th July 2021 Section 110 and section 111 of the Finance Act, 2021 made effective from 1st August 2021.
30/2021- Central Tax dated 30th July 2021 Rule 80 covering annual return provision is substituted.
31/2021- Central Tax dated 30th July 2021 Exempts specified registered person from filing of an annual return for the Financial Year 2020-2021.

The present article covers both the erstwhile provisions as well as the new provisions applicable to GST annual return.

Erstwhile annual return provisions as effective till 31st July 2021-

The relevant erstwhile annual return provisions are summarized hereunder-

  • The registered person, exceeding the specified limit, was required to get its accounts audited by the Chartered Accountant or the Cost Accountant. Accordingly, the audited report was required to be submitted while filing an annual return in Form GSTR-9.
  • The reconciliation statement in Form GSTR-9C was to be submitted only after certification of the same either by the Chartered Accountant or the Cost Accountant.

Annual return provisions as effective from 1st August 2021-

Section 110 and Section 111 of the Finance Act, 2021 omitted section 35(5) and amended provisions of section 44 of the Central Goods and Services Tax Act, 2017. Accordingly, the new provisions are-

  1. With the omission of section 35(5), the need of getting annual accounts audited by the Chartered Accountant or the Cost Accountant is disposed of.
  2. Amendment to section 44 sums up that the registered person who needs to submit a reconciliation statement in Form GSTR-9C can submit the same on a self-certification basis. Accordingly, the need of getting a reconciliation statement certified by the Chartered Accountant or the Cost Accountant is also disposed of.

Coming to rule 80 covering annual return provisions under Central Goods and Services Tax Rules, 2017, the same is entirely substituted vide Central Goods and Services Tax (Sixth Amendment) Rules, 2021. The amended rules are effective from 1st August 2021. The substituted rule is summarized hereunder-

  • A registered person (other than an input service distributor; a casual taxable person; a non-resident taxable person; person deducting or collection tax under section 51 or 52) needs to furnish the annual return in Form GSTR-9. The said return is to be filed on or before 31st December following the end of the relevant Financial Year.

Additionally, in case the aggregate turnover of the registered person (referred above) exceeds INR 5 Crores. Then, such a registered person is required to furnish a self-certified reconciliation statement in Form GSTR-9C.

  • Composition dealer paying tax under section 10 needs to furnish an annual return in Form GSTR-9A.
  • An e-commerce operator collecting TCS as per section 52 needs to furnish an annual return in Form GSTR-9B.

Exemption from the furnishing of annual return for Financial Year 2020-2021-

Notification no. 31/2021- Central Tax dated 30th July 2021 provides a specific exemption from filing of an annual return for the Financial Year 2020-2021.

As per the notification, every registered person whose aggregate turnover in the Financial Year 2020-2021 is less than or up to INR 2 Crores is exempted from the furnishing of annual return for the Financial Year 2020-2021.

Notably, the notification is effective from 1st August 2021.

Synopsis-

  • The registered person having an aggregate turnover up to INR 2 Crores during the Financial Year 2020-2021 is not required to furnish an annual return.
  • Self-certified reconciliation statement in Form GSTR-9C is to be furnished by the registered person having an aggregate turnover exceeding INR 5 Crores.
  • With effect from 1st August 2021, the registered person is not required to get its accounts audited by the Chartered Accountant or the Cost Accountant.

Other Related Guides

Central Goods and Services Tax (Sixth Amendment) R... Central Goods and Services Tax (Sixth Amendment) Rules, 2021 The Central Board of Indirect Taxes and Customs (CBIC) through Notification No. 30/2021 ...

Post by poonamgandhi

CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.