Clarification on some tables in GST Annual Return and Reconciliation

[Ganeshan Kalyani]

The Central Board of Indirect Taxes and Customs (CBIC) has clarified doubts on how to prepare some tables in GST Annual return and reconciliation vide Press release dated 03.07.2019. Those are reproduced below for easy reference:

1. Payment of any unpaid tax: GST annual return requires a taxpayer to furnish outward supplies as per books. Thus, the taxpayer scrutinize his books of accounts and ascertain the outward supplies. He then compares them with the returns already filed in GSTR-1 & GSTR-3B. In case he finds out that some transactions are inadvertently left out to be disclosed in the returns then he can show them in the GST annual return and pay the applicable tax with interest on the missed out taxable supplies. In this respect in the aforesaid press release the emphasize is given to section 73 of CGST Act, which provides for self-correction i.e. the taxpayer can suo-moto pay the tax before the service of notice by any tax authority. And in that case no penalty shall be levied. Thus, the taxpayer can use annual return as the opportunity to determine the correct turnover and pay tax with interest through FROM GST DRC-03.
2. Primary data source for declaration in annual return: The taxpayers are having doubts as regard what should be the basis for preparing annual return. Whether one should refer GSTR-1 or GSTR-3B or books of accounts. Vide this press release it is clarified that if books of accounts figure is more it would mean that supplies were not reported and hence that need to be furnished in the return. And in case the turnover as per books is less then it would mean that excess tax was paid. And in such case the excess paid tax should be shown in the annual return and should be applied for refund through FORM GST RFD-01A. Further, there is no provision in the annual return to claim the input tax credit and also to reverse the credit.
3. Table 8A & 8D of Annual return: Table 8A represents the input tax credit auto-populated from GSTR-2A as on 01.05.2019. Table 8D represents the difference between the input tax credits claimed through GSTR-3B and the input tax credit appearing in Table 8A. Ideally table 8D should be zero. However, the taxpayer may have missed to claim some credit which he comes to know only when he carried out GSTR-2A reconciliation. And the reconciliation is required mandatorily in the annual return only. Through this press release it is clarified that since the missed out credits were not shown in GSTR-3B it did not came in electronic credit ledger and thus the taxpayer is not to worry. Moreover, the credits auto-populated in table 8A is upto 01.05.2019 and supplier may have filed the details thereafter also. Hence, if GSTR-2A is downloaded the figures in the report would be different than the credit auto-populated in table 8A.
4. Table 8J of Annual return: In the earlier press release released on 4^th June, 2019 it was clarified that IGST credit on imports made during the year 2017-18 claimed during the period from July 2017 to March 2019 can be shown in table 6E. If the taxpayer has shown the IGST credit according to the press release then the amount appearing as difference in table 8I would represent the amount of credit that the taxpayer has chosen not to claim.
5. Table 16(A) & 18: Table 16(A) requires the taxpayer to show the supplies received from composition dealer. The required information was never asked to be furnished from the taxpayer. Thus, the said information was/in not maintained by the taxpayers. And, also there is not logic in the GSTIN to identify the type of registration of the supplier. In Income tax the forth character of the PAN represents the type from where one can understand that the person is an individual or a firm or a company etc. Such logic must be built in the GSTIN by the Government.  And, table 18 requires a taxpayer to provide HSN summary of inward supplies. Here, the possibility of not having HSN with the buyer is that some supplier do not mention HSN in the invoice. This is because the government has said that the taxpayers having turnover up to 1.5 Crores need not mention HSN on the invoice. Thus, HSN is not available with the buyer. Through this press release government has said that the buyer can show HSN of inward summary to the best of their knowledge and records. This data is only for information purposes and reasonable/explainable variations in the information reported in these tables will not be viewed adversely.
6. Table 5D (Exempted), Table 5E (Nil rated) and Table 5F (Non-GST supply): There is confusion amongst the taxpayer as regard their supply to be shown in exempted row or nil rated. Through the press release it is clarified that since there is no tax applicability on both the category of supply the information shown in exempted instead of nil-rated and vice-versa will not be viewed seriously. Further, non-GST supply is also clarified. It includes supply of alcoholic liquor for human consumption, motor spirit (commonly known as petrol), high speed diesel, aviation turbine fuel, petroleum crude and natural gas and transactions specified in Schedule III of the CGST Act.
7. RCM of FY 2017-18 paid in FY 2018-19: Many taxpayers have requested for clarification on the appropriate column or table in which tax which was to be paid on reverse charge basis for the FY 2017-18 but was paid during FY 2018-19. It may be noted that since the payment was made during FY 2018-19, the input tax credit on such payment of tax would have been availed in FY 2018-19 only. Therefore, such details will not be declared in the annual return for the FY 2017-18 and will be declared in the annual return for FY 2018-19. If there are any variations in the calculation of turnover on account of this adjustment, the same may be reported with reasons in the reconciliation statement (FORM GSTR-9C).
8. Role of chartered accountant or a cost accountant in certifying reconciliation statement: There are apprehensions that the chartered accountant or cost accountant may go beyond the books of account in their recommendations under FORM GSTR-9C. The GST Act is clear in this regard. With respect to the reconciliation statement, their role is limited to reconciling the values declared in annual return (FORM GSTR-9) with the audited annual accounts of the taxpayer.
1. Turnover for eligibility of filing of reconciliation statement: It may be noted that the aggregate turnover i.e. the turnover of all the registrations having the same Permanent Account Number is to be used for determining the requirement of filing of reconciliation statement. Therefore, if there are two registrations in two different States on the same PAN, say State A (with turnover of ₹ 1.2 Crore) and State B (with turnover of ₹ 1 Crore) they are both required to file reconciliation statements individually for their registrations since their aggregate turnover is greater than ₹ 2 Crore. The aggregate turnover for this purpose shall be reckoned for the period July, 2017 to March, 2018.
10. Treatment of Credit Notes / Debit Notes issued during FY 2018-19 for FY 2017-18: It may be noted that no credit note which has a tax implication can be issued after the month of September 2018 for any supply pertaining to FY 2017-18; a financial/commercial credit note can, however, be issued. If the credit or debit note for any supply was issued and declared in returns of FY 2018-19 and the provision for the same has been made in the books of accounts for FY 2017-18, the same shall be declared in Pt. V of the annual return. Many taxpayers have also represented that there is no provision in Pt. II of the reconciliation statement for adjustment in turnover in lieu of debit notes issued during FY 2018-19 although provision for the same was made in the books of account for FY 2017-18. In such cases, they may adjust the same in Table 5(O) of the reconciliation statement in FORM GSTR-9C.
11. Table 6B and 6H of GSTR-9: Many taxpayers have represented about duplication of information in Table 6B and 6H of the annual return. It may be noted that the label in Table 6H clearly states that information declared in Table 6H is exclusive of Table 6B. Therefore, information of such input tax credit is to be declared in one of the rows only.
12. Table 14 of GSTR-9C - Reconciliation of input tax credit availed on expenses: Table 14 of the reconciliation statement calls for reconciliation of input tax credit availed on expenses with input tax credit declared in the annual return. It may be noted that only those expenses are to be reconciled where input tax credit has been availed. The taxpayer is struggling on this point. Whether to reconcile all the expense ledger debited to P&L or only those ledger where GST is being charged. Here, reconciliation of all the ledgers are not possible to be done for entire year now. It could have been possible if the reconciliation was done on monthly or quarterly basis. Since, the time left to file the return is less the taxpayer can segregate the credit taken during the year into respective head and show it in the reconciliation statement. Further, the list of expenses given in Table 14 is a representative list of heads under which input tax credit may have been availed. The taxpayer has the option to add any head of expenses.