GST Annual Return: Everything you need to know about the format, eligibility & rules around GSTR
GST returns comprises of two types of return - periodic and annual returns. Periodic returns are monthly or quarterly returns for reporting transactions during the month or quarter, while annual return is for reporting the summary of the periodic returns filed during a financial year. As the annual return is last return of the year thus, it assumes special significance. Who is required to file an annual return
Generally, all taxpayers are required to file the return with certain exceptions such as taxpayers who have obtained registration as: 'Casual Taxable Persons' or 'Non-resident taxable persons' like exhibitors'Input service distributors' to distribute the input tax credit of services that are invoiced in one location however, are to be used in different States (for instance- distribution of input tax credit ppertaining to advertisement services invoiced in one State, however, is used in other States)Person liable for deduction of tax at source. The Government has not implemented the deduction of tax at source related provisions.
The Government had to suspend filings such as GSTR 2 and GSTR 3 and come up with a simplified summary return GSTR 3B. Efforts are underway to finalize the contents of the annual return with the dual purpose of achieving simplicity and comprehensiveness. The return format was supposed to be taken up during the last Council meeting on 31 July, however, no decision was taken. Once the Council approves the format, it may be placed for the stakeholder consultation.
Annual return is required to be filed on or before December 31, 2018. For instance for the financial year 2017-18 (transactions undertaken during July 17 to Mach 18), the last date for filing is December 31, 2018. What is the consequence of non-filing the return? Failure to file annual return shall attract a late fee of INR 200 per day during the period of failure, subject to a maximum of 0.25% of the said Financial Year's turnover.
What are immediate deadlines in the run upto the return? While the deadline for filing the annual return is a few months away, even taking into account the possibility of extension of deadline for filing, there are few important compliances that needs to be planned. Input tax credit pertaining to invoices issued by the suppliers during 1 July 2017 to 31 March 2018 needs to be accounted by 20 October 2018 in the GSTR 3B. As per the GST law, after 20 October 2018 credits pertaining to the said financial year cannot be taken. For instance, if an invoice is issued by supplier on 30 March 2018 however, the same is not claimed in any GSTR 3B by 20 October 2018, then credit pertaining to such invoice cannot be taken.
This would also mean that reconciliation exercise should be undertaken, well before finally ascertaining credits, to ensure that the supplier has also correctly uploaded the details and it appears in GSTR 2A. Further, credit notes for sales made during the last financial year should be accounted by 30 September 2018. Before filing the annual return, for taxpayers with more than INR 2 Crore turnover, GST audit would also need to be completed. Along with the audit report, copy of audited annual accounts and reconciliation statement of tax already paid and tax payable as per audited accounts needs to be submitted.
Whether the annual return can be revised
As there is no specific provision in GST law to revise the annual return hence, based upon the current version of the law, it appears that once filed the same cannot be revised.
While the precise details required to be submitted in the annual return is not final yet however, it would require finalization of input tax credit, invoices, credit notes, GST audit, etc.
Annual return would be the last return of the year and is likely to referred by multiple external stakeholders such as auditors, tax authorities, etc. for all times to come for the said year.
Experiences from periodic return and other filing such as TRAN 1 suggests taxpayers, GSTN and Governments are likely to go through challenges, which at best be anticipated and planned for.