GST Annual Return Filing for FY 2023-24: Key Updates and Strategies

GST

GST Annual Return Filing for FY 2023-24: Key Updates and Strategies

GST

Filing GSTR-9 and GSTR-9C can be a complex process, especially with new regulations, tighter scrutiny, and strict deadlines. However, with the right preparation and strategy, this task can become an opportunity to optimize financial processes and ensure regulatory compliance.

Significant Changes in GSTR-9 and GSTR-9C for FY 2023-24

1. Detailed ITC Reversal Reporting

  • Input Tax Credit (ITC) reversals under Rules 37, 42, and 43 require enhanced disclosures.

  • Includes proportional reversals for common inputs in taxable and exempt supplies and unpaid invoices over 180 days.

  • Ensure accuracy in reporting data under Table 7 to avoid penalties.

2. Reporting for E-Commerce Transactions

  • Businesses transacting through e-commerce operators (ECOs) must align supply data and TCS deductions under Section 52.
  • Discrepancies between business records and ECO data can lead to mismatches and penalties.

3. Mandatory HSN Code Disclosure

  • Taxpayers with turnovers exceeding ₹5 crore must report detailed HSN codes for outward supplies.

  • While inward supply reporting is optional, incorrect or missing HSN codes could result in compliance issues.

4. Revised Discrepancy Tolerance Limits in GSTR-9C

  • Variances between books and returns are permitted up to 2% of turnover or ₹2 lakh, whichever is higher.
  • Discrepancies exceeding this limit require proper justifications.

5. Emphasis on Prior-Year Adjustments

  • Greater focus is placed on amendments and omissions from prior years.
  • Accurate reporting in Part V is crucial, as highlighted in the GSTIN Advisory dated December 9.

6. Auto-Populated Data Enhancements

  • Figures from GSTR-1, GSTR-3B, and GSTR-2B are auto-populated with improved precision.

  • For FY 2023-24, ITC reconciliation must rely on GSTR-2B instead of GSTR-2A. Ensure alignment of your records with the auto-populated data.

7. Deadline for ITC Claims

  • ITC for FY 2023-24 must be claimed by the due date for October 2024’s GSTR-3B filing.

  • Missing this deadline can lead to the loss of eligible credits.

Common Mistakes to Avoid When Filing GST Returns

1. Discrepancies Between Returns and Books

  • Issue: Mismatches between GSTR-1, GSTR-3B, and books can trigger notices and penalties.

  • Solution: Reconcile turnover and tax amounts across all returns and records before filing.

2. Errors in ITC Reconciliation

  • Issue: Overclaimed ITC attracts penalties, while underclaimed ITC impacts cash flow.

  • Solution: Match ITC claims with GSTR-2B and reverse ineligible credits per applicable rules.

3. Neglecting Prior-Year Adjustments

  • Issue: Failing to report prior-year adjustments invites audits and scrutiny.

  • Solution: Include credit/debit notes and invoice amendments in Part V accurately.

4. Incorrect HSN Code Reporting

  • Issue: Non-compliance due to missing or incorrect HSN codes.

  • Solution: Verify and report correct HSN codes for all outward supplies.

5. Errors in E-Commerce TCS Reporting

  • Issue: Mismatched TCS deductions with ECO-reported data may lead to penalties.

  • Solution: Ensure internal records align with ECO-reported TCS deductions under Section 52.

6. Late Filing

  • Issue: Late fees of ₹200/day (capped at 0.50% of turnover) are levied for delays.

  • Solution: File GSTR-9 and GSTR-9C before the December 31, 2024 deadline.

7. Lack of Reconciliation Justifications

  • Issue: Unexplained variances invite further scrutiny.

  • Solution: Retain detailed records and provide justifications for all reconciliations.

Tips for a Seamless GST Return Filing Process

1. Start Early

  • Begin reconciling data from GSTR-1, GSTR-3B, and GSTR-2B well before the filing deadline to identify and address discrepancies early.

GST

2. Utilize Technology

  • Leverage trusted GST reconciliation tools to automate error detection and ensure data accuracy.

3. Stay Deadline-Aware

  • Mark the December 31, 2024 deadline (or extensions, if any) on your calendar to avoid late fees and last-minute stress.

Read More: ITAT Allows Set-Off of Short-Term Capital Loss Against Long-Term Capital Gains: A Relief for Taxpayers

4. Seek Professional Advice

  • Consulting GST experts can simplify the filing process, ensuring compliance and optimizing ITC claims.

Filing GSTR-9 and GSTR-9C doesn’t have to be an overwhelming experience. By staying updated on the latest changes, avoiding common mistakes, and leveraging professional advice, taxpayers can ensure a smooth and hassle-free filing process. 

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Key Changes in GST Annual Return for FY 2023-24: A Guide to Filing Without Errors

GST Annual Return

Key Changes in GST Annual Return for FY 2023-24: A Guide to Filing Without Errors

GST Annual Return

The GST Annual Return filing season is here, and it’s crucial for registered taxpayers to ensure accuracy to avoid potential mismatches, particularly with Input Tax Credit (ITC). The GST annual return for FY 2023-24 must be filed on or before December 31, 2024. However, there are several changes in the process that taxpayers need to understand to ensure smooth compliance.

Who Needs to File the GST Annual Return?

GST-registered taxpayers, except those in specific categories, must file the annual return in Form GSTR-9. Exceptions include:

  • Input Service Distributors
  • Persons paying tax under TDS/TCS
  • Casual taxable persons
  • Non-resident taxable persons

For taxpayers with a turnover of up to ₹2 crores, filing the GST annual return is not mandatory for FY 2023-24.

For businesses with turnovers exceeding ₹2 crores, the following rules apply:

  • Turnover ₹2-5 crores: Filing GSTR-9C (reconciliation statement) is optional.
  • Turnover above ₹5 crores: Filing GSTR-9C is mandatory.

Changes in GSTR-9 for FY 2023-24

The most notable update in the GSTR-9 relates to the sourcing of ITC details in Table 8A. Previously, ITC details in Table 8A were auto-populated using data from GSTR-2A, a statement of inward supplies. Starting from FY 2023-24, Table 8A will now derive its data from GSTR-2B.

What is GSTR-2B?

GSTR-2B is an auto-drafted statement reflecting ITC based on invoices uploaded by suppliers in their respective GSTR-1 returns. This change is expected to:

  • Simplify the reconciliation process.
  • Minimize manual efforts by taxpayers.

Implications of the Change

Switching from GSTR-2A to GSTR-2B emphasizes the need for taxpayers to ensure their suppliers upload invoices promptly. Any delays or errors in supplier filings can lead to discrepancies, requiring additional effort to reconcile ITC claims.

  • Table 8A: Now populated based on GSTR-2B, reflecting eligible ITC.
  • Table 8D: Highlights discrepancies between ITC claimed and ITC auto-populated for reconciliation purposes.

Additionally, Table 6 of GSTR-9 will report ITC based on actual utilization for the financial year as per returns filed.

Key Steps for Accurate Filing

To avoid mismatches and ensure compliance:

  1. File Monthly/Quarterly Returns First: Ensure all monthly or quarterly returns (under the QRMP scheme) are filed before starting the annual return. GSTR-9 data is auto-populated from these returns.
  2. Monitor GSTR-2B Closely: Regularly check GSTR-2B to ensure all eligible ITC is captured.
  3. Reconcile ITC Claims: Compare ITC in GSTR-3B with GSTR-2B data to avoid mismatches.

Read More: GST Amnesty 2024: Waiver of Interest and Penalties Under Section 128A

The new approach of using GSTR-2B for auto-populating ITC in GSTR-9 aims to improve accuracy and reduce errors. However, it places greater responsibility on taxpayers to maintain data accuracy and coordinate with suppliers. Proactive monitoring and timely action will help ensure smooth filing for FY 2023-24.

For further assistance with GST compliance, consider reaching out to experts to navigate the complexities of annual return filing and reconciliation.

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Key Relaxations and Optional Tables in GSTR-9 and GSTR-9C for FY 2023-24

Key Relaxations and Optional Tables in GSTR-9 and GSTR-9C for FY 2023-24

GSTR-9

With the approaching deadline for filing GSTR-9 and GSTR-9C for FY 2023-24, the Central Board of Indirect Taxes and Customs (CBIC) has implemented several relaxations to ease the compliance process. These updates, outlined in the CGST (Amendment) Rules, 2024, aim to reduce the reporting burden on taxpayers while making the filing process more efficient and straightforward.

Below is a comprehensive summary of the key relaxations and optional reporting tables introduced in GSTR-9 and GSTR-9C for FY 2023-24:

1. Simplifications in GSTR-9

A. Outward Supplies and Adjustments (Table 5)

  • Exempted and Nil-Rated Supplies (5D & 5E):
    Taxpayers can report the consolidated value of both exempted supplies and nil-rated supplies in Table 5D.
  • Credit and Debit Notes (5H & 5I):
    The value of credit and debit notes can be reported on a net basis against the original supplies (Tables 5A-5F).
  • Amendments to Supplies (5J & 5K):
    Similarly, amendments to supplies can also be reported on a net basis for Tables 5A-5F.
GSTR-9

B. Input Tax Credit (ITC) Details (Table 6)

  • Inward Supplies (6B, 6C & 6D):
    Taxpayers now have the option to report ITC on inputs and input services in a single consolidated column under “Inputs.”
  • Imports (6E):
    ITC on imported goods and services can also be consolidated under the “Inputs” column.

C. Reversal of ITC (Table 7)

  • Reversal of ITC (7A to 7E):
    Instead of filling multiple sub-tables, taxpayers can report all reversals in a consolidated manner under Table 7H, labeled as “Other Reversals.”

D. Tax Paid (Table 9)

Taxpayers are required to provide an annual summary of GST payments, as reflected in their GSTR-3B returns, ensuring alignment between returns and payments.

E. Optional Reporting for Certain Tables

  • Sales Adjustments for Future Periods (Tables 10 & 11):
    Reporting of sales adjustments made in FY 2024-25 for transactions of FY 2023-24 is optional.
  • ITC Adjustments (Tables 12 & 13):
    Tables related to ITC reversals and availment for transactions spanning FY 2023-24 and FY 2024-25 are optional.
  • Demand and Refund (Table 15):
    Details of demands raised and refunds claimed during the year are not mandatory to report.
  • Composition and Job Work Supplies (Table 16):
    Reporting supplies from composition taxpayers, deemed supplies by job workers, and goods sent on approval can be skipped.
  • HSN Codes for Supplies (Tables 17 & 18):
    Simplified HSN/SAC reporting:
    • For businesses with a turnover > ₹5 Crores, report 6-digit HSN codes.
    • Others can report 4-digit HSN codes for B2B transactions.

2. Relaxations in GSTR-9C

A. Optional Table

  • Table 14 (Differential Tax):
    Reporting of differential tax paid on adjustments made in Tables 10 and 11 is optional.

B. Mandatory Tables

All other tables in GSTR-9C remain mandatory for taxpayers.

3. Simplified Reporting for Small Businesses

For businesses with a turnover of less than ₹5 Crores, simplified compliance includes:

  • Optional HSN reporting at the 4-digit level.
  • Consolidation of multiple ITC categories and reversals, reducing the complexity of reporting.

Read More: GST Amnesty 2024: Waiver of Interest and Penalties Under Section 128A

These relaxations for FY 2023-24 aim to provide greater flexibility to taxpayers, reducing compliance time and effort. By allowing consolidated reporting and optional tables, the CBIC continues to streamline GST compliance processes.

Taxpayers are encouraged to review these changes carefully and consult professionals for efficient filing to avoid penalties or errors.

Stay updated with Certicom Consulting for expert GST advisory and compliance assistance.

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