Introduction
Today's technologically advanced times are posing more challenges for the audit disclosures that need to be made through the Annual Returns. They need to stay current, relevant and develop a knack of being watchful of things beyond and beneath what's visible while empathizing with the business needs and also adding value to the organization. The stakeholders including government getting audit performed either on voluntary or on a mandatory basis. Use of audit tools to enhance the sample or even provide 100% verification is expected.
Today, auditing is a measure that provides a third-party assurance that the subject matter is free from material misstatements. The result of an audit is that stakeholders (including investors, vendors, customers, funders etc.) would effectively evaluate and have more confidence and credibility in/on the financials. Audit also improves the efficiency and effectiveness of risk management, control, and the governance process in an organization. Through previous articles, we saw the analysis of the outward and inward supplies in Annual Returns, with this article we will try to understand the other disclosures which would be required during filing the annual returns.
Table 14 provides for disclosing details of differential tax paid on account of declaration in tables 10 & 11 above
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Description |
Reference to fill information |
Instruction provided in form |
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14 |
Details of IGST, CGST, SGST/UTGST, Cess or Interest payable and paid. |
Details of differential taxes paid on account of disclosure of transactions in present FY which are pertaining to previous FY for which annual return is being filed to be provided in this table. |
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Additional points for Table 14
1. Table 14 includes differential tax on account of 10 and 11 above. However, there could be a scenario wherein there is a need to reverse the wrongly availed credit in table 12. Since, the annual return provides for payment of taxes, in table 14, liability from table 12 can also be considered in view of the authors.
2. The liability to be discharged through DRC-03 in cash as per the instructions.
3. All the genuine liability could be discharged to avoid qualification in GSTR-9C audit report.
4. Where details relate to only Table 11 (reduction in tax liability), Table 14 would not be able to disclose negative values.
Disclosure of treatment of items reflected in Part V of GSTR-9 of the previous FY
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Particulars |
FY 2020-21 |
FY 2021-22 |
Remarks |
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Disclosure in GSTR-9 |
Disclosure in GSTR-9 |
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Transactions related to outward supplies; Debit & Credit Notes of FY 20-21 considered in GSTR 3B of FY 21-22 |
Part V (Table 10,11) |
NA |
There must be an additional field in the present form to exclude the transactions pertaining to the previous FY's. If form not revised, then it leads to difference in tax paid and tax payable. Tax paid would be higher on account of transactions added including debit note. In case of credit, reduction in tax. |
Table 15 provides for reporting of Demands and Refunds claims by the registered person during the preceding financial year
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Tab. Ref. |
Description |
Reference to fill information |
Instruction provided in form |
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15 |
A. Total Refund claimed B. Total Refund Sanctioned C. Total Refund Rejected D. Total Refund pending E. Total Demand of Taxes F. Total taxes paid in respect of E above G. Total demand pending out of E above |
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Additional points for Table 15
1. Registered persons need to make sure that there is proper documentation for exports such as shipping bills, realization certificates, proper disclosure in the GSTR-3B return for debit.
2. In case of export on payment of IGST for refund purpose, IGST should not be collected from customers.
3. Adherence to conditions in case of deemed exports in terms of section 147 (EOU, EPCG, Advance authorization etc.) as provided in circular no.14/14/2017 dated 06.11.2017.
4. Relevant declarations from the SEZ customers.
5. Details during such FY only to be provided. For example, refund of FY 2020-21 received in FY 2022-23, details to be disclosed in FY 2022-23 GSTR 9.
Table 16 requires information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis
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Tab. Ref. |
Description |
Reference to fill information |
Instruction provided in form |
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16 |
A. Supplies received from Composition taxpayers B. Deemed supply under section 143 C. Goods sent on approval basis but not returned |
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Press release clarification With respect to information in table 16A, vide press release dated 03.07.2019, CBIC has stated that there has been observation that the smaller taxpayers are facing a lot of challenge in reporting information that was not being explicitly reported in their regular statement/returns (Form GSTR-1 and Form GSTR-3B). Therefore, taxpayers are advised to declare all such data/details (which are not part of their regular statement/returns) 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 |
Additional points for Table 16
1. Though the information is optional for FY 2021-22, the registered persons could collate the information of deemed supplies under sec 143 which is nothing, but the goods sent on job work basis but not received within the stipulated period for payment of GST with interest. In such cases, interest would be payable from date of supply of goods for job work.
2. In case of job work transactions nearing the due date i.e., 1 year for inputs and 3 years for capital goods, extension can be sought from the commissioner (1 year for inputs and 2 years for capital goods) or goods to be received for sending back again. There is no provision presently to claim the credit of GST paid on deemed supply in terms of sec 143.
3. Goods sent on approval basis and timelines to be ascertained. In terms of sec 31 (7), where the goods are being sent or taken on approval for sale or return are removed before the supply takes place, the tax invoice needs to be issued before or at the time of supply or six months from the date of removal, whichever is earlier. Delay would attract the interest.
4. In case of supplies from composition taxpayers, it needs to be ensured that there is no tax charged on the invoice. Even if charged by mistake, the recipient cannot claim the input tax credit.
5. Registered persons can also make use of details of procurements from composition suppliers for cost-benefit analysis as such suppliers would not be eligible for ITC which can increase the cost of goods.
Table 17 and 18 requires reporting of HSN wise summary of Outward and Inward Supplies reported in the previous FY
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Description |
Reference to fill information |
Instruction provided in form |
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17 |
Outward Supplies |
Note: Between HSN tables in GSTR 1 to GSTR 9, the additional requirement is the rate of tax per HSN which is to be provided.
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Summary of supplies effected and received against a particular HSN code to be reported only in this table. It is mandatory for taxpayers having annual turnover up to INR 5 Cr at four digits and for taxpayers having annual turnover in the preceding year above INR 5 Cr at 6 digits. UQC details to be furnished only for supply of goods. Quantity is to be reported net of returns. Table 12 of FORM GSTR1 may be used for filling up details in Table 17. It may be noted that this summary details are required to be declared only for those inward supplies which in value independently account for 10 % or more of the total value of inward supplies. |
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18 |
Inward Supplies |
Note: Between HSN tables in GSTR 1 to GSTR 9, the additional requirement is the rate of tax per HSN which is to be provided.
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Summary of supplies effected and received against a particular HSN code to be reported only in this table. UQC details to be furnished only for supply of goods. Quantity is to be reported net of returns. Table 12 of FORM GSTR1 may be used for filling up details in Table 17. For FY 2021-22, the registered person shall have an option not to fill this table. Press release clarification With respect to information in table 18, vide press release dated 03.07.2019, CBIC has stated that there has been observation that the smaller taxpayers are facing a lot of challenge in reporting information that was not being explicitly reported in their regular statement/returns (Form GSTR-1 and Form GSTR-3B). Therefore, taxpayers are advised to declare all such data/details (which are not part of their regular statement/returns) 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. |
Table 19 requires reporting of Late Fees
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Description |
Reference to fill information |
Instruction provided in form |
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19 |
Late fees payable and paid |
Late fee payable details would be auto-populated here. This would be applicable only if annual return delayed beyond the due date. The late fees for delayed filing of the annual returns for the FY 2018-19, 2019-20 had been waived off for the taxpayer with the aggregate turnover less than INR 2 Crore who have option of filing /not filing the annual return. |
Late fee would be payable if annual return is filed after the due date. |
The last part is verification wherein the authorized person for the tax payer needs to affirm and declare that the information given is true and correct to best of his knowledge and nothing has been concealed. Interestingly, he should also confirm that in case of any reduction in output tax liability, the benefit has been passed on the recipient of supply. It is not clear if such declaration is required only when there is a reduction due to reduction in rate of tax.
Few taxpayers would have ignored the aspect of anti-profiteering. It is also possible that taxpayers file the annual return accepting the above declaration. It may be advisable where such liability is possible to take a certificate from a Chartered Accountant on the absence of anti-profiteering. If such declaration is found to be false, then there could only be general penalty under section 125 of CGST Act 2017 as there are separate specific provisions for non-compliance with anti-profiteering provisions in addition to the general penalties applicable.
Discharge of additional liability
Towards the end of the return, taxpayers are being given an option to pay any additional liability declared in this form, through Form DRC-03. Taxpayers need to select 'Annual Return' in the drop down provided in Form DRC-03. It may be noted that such liability can be paid through electronic cash ledger only as per the instruction provided to GSTR-9.
It is relevant to note that section 41(2) of CGST Act, 2017 allows utilisation of credit for payment of self-assessed output tax as per return. According to section 2(97) of CGST Act 2017, 'return' means any return prescribed or otherwise required to be furnished by or under this Act or the Rules made thereunder. It is not clear if annual return can be considered as return for the purpose of section 41(2).
Payments made through Form DRC-03 for any supplies relating to period between April 2021 to March 2022 would not be accounted for in Form GSTR-9 but shall be reported during reconciliation in FORM GSTR-9C.
Details Not Required to Be Furnished in The Annual Return
It is important to know that the annual return does not warrant submission of some information as per understanding today, which are provided below:
(1) Details of goods sent and received back within time limit/ after job work.
(2) Details of supplies made without consideration.
(3) Details of free issues, gifts, free samples etc.
(4) Details of transactions covered in Schedule III to CGST Act such as sale of land, building after obtaining completion certificate etc.
(5) Details of deductions claimed as pure agent towards the taxable supplies made.
(6) Details of goods received free of cost from customers.
Also Read:
- Checklist of Accounts, Records & Documents to be maintained from GST Audit Perspective: GST Audit Series (Part 1)
- In-depth Audit Programme & Checklist for conducting GST Audit - Part 2
- Key Amendments in FY 2021-22 relevant for GST Audit - Part 3
- Clause by clause analysis of Revenue items & outward supply disclosures in Annual Returns - Part 4
- Clause by clause analysis of ITC disclosures in Annual Returns - Part 5
The authors can also be reached at mahadev@hiregange.com, ravikumar@hiregange.com or yash@hiregange.com.
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