Technical Guide on GSTR-9: Complete Annual Return Filing Guide

GSTR-9 is the annual return prescribed under Section 44 of the CGST Act, 2017. This return requires a summary report on all outward supplies, inward supplies, input tax credit (ITC), and tax payments for the financial year. This article is a technical guide on GSTR-9; we will discuss the structure of GSTR-9, followed by a table-by-table detailed analysis, reconciliations and documents required before filing GSTR-9.

Key Takeaways

• GSTR-9 must be filed by taxpayer whose turnover exceeds Rs 2 crore for the financial year
• GSTR-9 can only be filed after filing all GSTR-1 and GSTR-3B for the relevant financial year.
• Proper reconciliation between books of accounts and GST returns is required before filing GSTR-9.
• GSTR-9 specifically requires details of the previous financial year disclosed in the current financial year and details of the current financial year disclosed in the subsequent financial year.

Structure of the Return - Overview of Form GSTR-9

Form GSTR-9 is designed to provide a consolidated summary of a taxpayer's inward and outward supplies for the entire financial year. GSTR-9 is divided into six major parts:

Part I contains the basic taxpayer’s details, such as GSTIN, legal name, trade name, and the financial year. These fields are usually auto-filled. 

Part II captures sales or outward supplies where the taxpayer is required to summarise each category of supply, i.e., taxable, exempt, nil-rated, and non-GST supplies made during the year. This part also captures inward supplies which are subject to the reverse charge mechanism.

Part III deals with ITC, one of the most crucial portions of the annual return; this requires a detailed breakup of ITC availed, reversed, and compared with GSTR-2B. 

Part IV summarises taxes paid during the year through cash and ITC, as reported in GSTR-3B. 

Part V focuses on adjustments relating to the previous financial year but made in the current financial year. 

Part VI includes additional disclosures such as demands and refunds issued for the year, an HSN-wise summary of inward and outward supplies, and late fees paid during the year.

Reconciliation Process (Pre-Filing Check)

An enterprise, while filing GSTR returns during the financial year, goes through various amendments and updates due to errors found; for instance, missed invoices and incorrect input tax credit claimed. 

The above errors are usually rectified in subsequent returns for which a taxpayer must prepare a reconciliation on a monthly basis comparing GSTR-1, GSTR-3B and GSTR-2B along with books of accounts; this is very important before filing GSTR-9. 

Outward supply reconciliation ensures that sales as per books match with GSTR-1 and with the tax liability disclosed in GSTR-3B. Since there might be invoices that are amended in later months.

Inward supply reconciliation involves matching purchases and expenses with GSTR-2B. Only the credit appearing in GSTR-2B is considered as eligible ITC. ITC not reflected in GSTR-2B cannot be claimed unless it has appeared in a subsequent month.

In case any ITC of the current financial year is availed or reversed in the next financial year, such adjustment shall also be included in the reconciliations. 

Performing reconciliations helps a taxpayer to identify discrepancies and resolve the same before filing GSTR-9. This also significantly reduces the risk of GST department scrutiny.

Section-wise Detailed Walkthrough of Form GSTR-9

Part I: Basic Details

This section comprises basic details related to the taxpayer and annual return, i.e., the financial year for which the annual return is filed, GSTIN, legal name and trade name of the taxpayer. These details are usually auto-populated by the GST portal.

Part II: Advances, Inward and Outward Supplies

This section requires details relating to sales whether B2B or B2C, exports, exempted sales and non-GST supplies made during the year. Hence, a taxpayer must ensure that the total of the above figures, i.e., the aggregate turnover, matches with the turnover disclosed in the financial statements.

Credit and debit notes, invoice amendments, and inward supplies subject to the reverse charge mechanism are required to be disclosed under this section. All these details are captured from GSTR 1 filed during the year.

Part III: ITC-Related Reporting

This section requires a brief bifurcation of ITC claimed during the year, which includes input goods, input services and capital goods received from registered persons, unregistered persons (which are subject to the reverse charge mechanism), import of goods and services and ITC received from the input service distributor. The aggregate ITC detailed above is compared to the ITC claimed in GSTR 3B.

Ineligible ITC and ITC which are reversed, for example, failure to pay a supplier within 180 days from the date of invoice. Such details are also required in this section. Finally, GSTR-2B is compared to ITC claimed for input goods, input services, and capital goods received from registered persons to determine whether any excess or deficient ITC is claimed.

Part IV: Tax Paid

This section details tax, interest, late fees and penalties paid through cash and/or ITC during the year. The tax paid is compared with the actual tax payable.

Part V: Current FY Adjustments Made in the Next FY 

Any inward or outward supply transactions that cannot be claimed or reversed may be reported in the returns filed between April and October of the following financial year. Such details will be disclosed under this section.

Part VI: Additional Information

This section includes an HSN-wise summary for inward and outward supplies, inward supplies received from composition taxpayers, details of refunds and demands for the year, and late fees payable and paid. 

GSTR 9 Technical Analysis: Table-by-Table Guide

Documents & Records Required for Preparing GSTR-9

Books of accounts and the GST portal are prominent data sources required for filing GSTR-9 correctly. A taxpayer must ensure that GSTR-1 and GSTR-3B are filed for all the months.

From books of accounts, a taxpayer will require the following:

1. Sales and purchase register
2. Credit and debit notes register
3. Working pertaining to eligible ITC availed and ineligible ITC been not availed and lapsed
4. List of amendment made in GST returns for the financial year
5. Workings to evidence suppliers are paid within the stipulated period to avoid ITC reversals.

From the GST Portal,

1. GSTR-1, GSTR-2B and GSTR-3B for the financial year
2. GST returns for months pertaining to the subsequent financial year where amendments are inserted or input tax credit is availed for the financial year.

Other Documents:

1. E-invoices, 
2. E-way bills, and 
3. Bill of entry for imports

Common Mistakes & How to Avoid Them

As GSTR-9 is filed after all GST returns are filed, it is quite possible that there might be mismatches between books of accounts and GST returns. A taxpayer must ensure that all data sources are reconciled, as any error or mismatch may attract unnecessary notices from the GST department.

Common mistakes include sales not being matched along with the HSN summary and also not checking the HSN summary submitted in GSTR-1. Another issue arises on account of the incorrect classification of taxable sales shown as exempt sales or vice versa. 

Certain taxpayers have other income which is exempt in nature; accordingly, appropriate ITC must be reversed at every end of the financial year. This reversal are usually skipped by various taxpayers.

For detailed insights, refer to our article on common errors and solutions in GSTR-9 filing