How to Best Utilise the Three Month Extension for GSTR-9

The deadline to file the GSTR-9 annual return was extended for the fourth time, and this time the extension is for another three months until 30th November 2019. The reason for the deadline extension was due to the poor filing response by taxpayers, where only approximately 15% of registered taxpayers had filed their annual returns. Hence, the government decided it would be best to give taxpayers additional time to comply with this statutory requirement.

Now that taxpayers have two and a half months remaining before the revised due date, it is imperative that they utilise this time appropriately, and not rely on the possibility of any more due date extensions. Here are some suggestions taxpayers can follow to make the next few months productive, and avoid stress at the last minute. 

1. Segregate your annual turnover

GSTR-9 and GSTR-9C are to be filed based on every GSTIN held by an entity. Even though monthly/quarterly GST returns were being filed for every state/UT, the financial statements/Books of Accounts may be maintained collectively for the entire organisation.

Since turnover needs to be reported GSTIN-wise even as per the Books of Accounts, it would be helpful to start by segregating the turnover, and even bifurcating it additionally into the pre-GST and post-GST era.

2. Reconciling ITC is the need of the hour

GSTR-9 has caused endless grievances for taxpayers due to the non-reconciliation of ITC between the auto-generated GSTR-2A figures and the actual data filed by the taxpayers.

Since it does not seem likely that the government will do away with this requirement, it is high time that taxpayers reconciled their ITC and reported figures in the GSTR-9 as deemed accurate by them.

Also, taxpayers should use this extra time to bifurcate their ITC based on inputs, input services and capital goods, as this requirement did not exist in the GSTR-3B, and hence was not done earlier in most cases. 

3. Categorise supplies based on HSN codes

This is again, a new requirement under GSTR-9, where even input supplies are to be categorised based on their HSN codes. This created quite an outcry as businesses who made their purchases from small taxpayers do not have this data at hand, as small taxpayers were not required to mention HSN code details on their invoices.

As long as this requirement is still in place, taxpayers need to adhere to reporting requirements and can use the deadline extension to gather all the data required to categorise their inward and outward supplies and declare the same as per the specified norms.

Also Read: 13 Reasons Why GSTR-9 Deadline Has Been Extended

4. Reconcile all amendments made

As the revision of GST returns was not permitted, and only changes could be made in the following tax period’s return, now, almost every business has the hassle of having to reconcile their amendments to accurately report them.

This is a tedious and time-consuming process. Especially in cases of amendments made in FY18-19 for business transactions carried out in FY17-18. Taxpayers can use this time to reconcile all their amendments made to ensure smooth and proper reporting in the GSTR-9 return.

5. Keep all documentation in order

The extension of the deadline gives taxpayers the added benefit of organising and keeping all their financial documentation in order. This is vital because, being the first year of GST returns filed, the chances for errors being committed are high and the government is bound to pick up cases for scrutiny based on them.

Hence, it would make things simpler for taxpayers to prove their genuineness if they had all their necessary documents in order, in case such a situation arose.

6. Pay off the additional liability in form DRC-03

This is for those taxpayers who have a debt to be paid off after filling in their form GSTR-9 return. It could be due to additional revenue declared, a shortfall or inaccurate computation of input tax credit (ITC), or it could be due to any other reason.

The only way to pay off such a liability now for FY17-18 is by using form DRC-03. Instead of waiting until the last moment, taxpayers can use this extra time to compute and pay off their liability as soon as possible, which is one step closer to filing their annual returns.

7. Start preparing form GSTR-9C right away

This requirement is only for those taxpayers whose turnover has exceeded Rs.2 crore in a financial year. The GSTR-9C form is as intricate as the GSTR-9 form and needs a lot of time to understand and prepare. While it is the auditor’s responsibility to verify data and conduct the audit, it is the taxpayer’s responsibility to ensure that it is filed on time.

More so, the auditor will require information from the taxpayer himself to conduct the audit and certify the data being reported. Hence, even before waiting for form GSTR-9 should be filed, the taxpayers that fall under the purview of GSTR-9C audit should start working on the preparation of Form GSTR-9C simultaneously.

8. Do not ignore the smaller reporting requirements

Sometimes, smaller reporting requirements are often overlooked by taxpayers who realise at the last minute that they do not have the data, and hence their return-filing gets delayed beyond the due date.

Some of them being, the declaration of data under demands and refunds, the amount of taxes, interest and penalties paid, supplies made from composition taxpayers, etc. Also, similar to the HSN code reporting requirements, expenses under various are to be categorised and reported in the GSTR-9C. Taxpayers should ensure that all this data is appropriately classified and hence can be reported accurately.

For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in