Changes and Compliances in GSTR 9 & 9C-FY 2023-24

Introduction

Action of departmental audits ma impact the landscape of annual return filing. Considering the various changes in the GST law in the past year, this article aims to provide clarity on the filing of annual returns (Form GSTR 9) and reconciliation statement (Form GSTR 9C) along with required reconciliations, best practices, advanced issues & solutions and tips as applicable for financial year (FY) 2023-24.

Due date – 31^st December 2024. The due date is not expected to be extended this year.

Reconciliations required:

1. Turnover - Audited Financial Statements (AFS/Books) vs Table 5A (consider all GSTINs)
2. Table 5N Vs Table 17 – As table 17 is now mandated, this reconciliation could be an internal check mechanism.
3. Outward taxes – Liability as per Books Vs Liability as per GSTR 3B + DRC-03 (if any) [ensure RCM liability is included]
4. Outward taxes – Rate wise liability as per workings Vs Rate-wise Liability as per books
5. GSTR 1 Vs GSTR 3B  (This will help update GSTR 9 easily)
6. Inward taxes – Credit as per books Vs Credit as per GSTR 3B to identify excess claim of ITC, if any and missed out ITC to claim before 30^th November 2024 through October 3B returns. 
7. Closing balance [Cash + Credit] – Books Vs GST portal (consider all GSTINs)
8. Verify and provide for Spill over transactions of previous FY and maintain tracker for next FY
9. Identify rectification and modifications done beyond 30^th November timeline. (Revised from 20^th September).

Note: Perform invoice level reconciliations - A very beneficial exercise to taxpayers, which will help not only in the process of filing the annual returns but also to identify the errors and provide info to department in the future.

Form GSTR 9 – Annual Returns

1. Table 4G1 - Supplies on which e-commerce operator  is  required to pay tax as per section 9(5) – inserted from FY 23-24 onwards. Source of info - GSTR 1 - table 15 & table 3.1.1.i - GSTR 3B.
2. Table 5C1 - Supplies on which tax is  to  be  paid  by  e-commerce operators as per section 9(5) – inserted from FY 23-24 onwards. Source of info - - GSTR 1 table 14(b) & table 3.1.1.ii - GSTR 3B.
3. Wordings + Formula correction in table 5N due to above changes.
4. Table 8A will depict ITC as per table 3(I) of Form GSTR 2B – from FY 2023-24 onwards (not GSTR 2A anymore). In line with s16(2)(aa) r/w Rule 36.
5. Period changes where applicable & Inclusion of GSTR 1A where applicable (along with GSTR 1). Although GSTR 1A was practically introduced only in FY 2024-25.

The relaxations that remain from the past are as follows:

6. Table 4 - Amendments, credit notes and debit notes cannot be shown as net figures in B2B, B2C, etc. now. Table 4I to 4L to be disclosed separately from FY 21-22
7. Table 5 - Exempted & Nil-rated can be consolidated in ‘Exempted’ column or shown separately. Table 5F - Non-GST to be shown separately from FY 21-22 onwards
8. Table 17 - HSN outward details mandated from FY 2021-22 onwards. (GSTR 1 consolidated data can be used for table 17)
9. HSN disclosures to be performed at 6-digit level (when T/o > Rs. 5 crore) and 4-digit level (when T/o < Rs>
10. Clarification that disclosures in GSTR 1 tables 9A, 9B & 9C must be disclosed in table 10 & 11 of GSTR 9.
11. Table 5 - Amendments, credit notes and debit notes can be shown as net figures in table 5.
12. Table 6 - ITC bifurcation into ‘inputs’/’input services’ not mandatory, total value can be consolidated under ‘Inputs’. From FY 2019-20 - under ‘Inputs’ & ‘Capital Goods’.
13. Table 6 - May consolidate ITC under RCM from registered and un-registered persons under registered persons’ table.
14. Table 7 - All ITC reversals may be consolidated under Table 7H, although TRAN reversals to be shown separately.
15. Part V - Reversal/Availment of ITC in previous year may not be filled (T12 & T13)
16. Table 15, 16 & 18 - Refund details, Info on inward supplies & deemed supply, HSN inward details remain optional.

Clarification on Outward Supply disclosures:

17. Outward supply of FY 22-23 disclosed in GSTR 3B of FY 23-24, where shown in GSTR 9 FY 22-23 in table 10 or table 11 – Should not form part of table 4 or 5 of GSTR 9 FY 23-24. [short/excess taxes paid in 22-23 adj. in 23-24]
    • Reason – already disclosed and reconciled in GSTR 9 & 9C of FY 22-23
    • Impact – Table 9 of GSTR 9 FY 23-24 would show this variance (not compensatory in nature)
18. Credit Note raised in FY 22-23 disclosed in GST returns of FY 23-24, where shown in GSTR 9 FY 22-23 table 4 – Should not form part of table 4 or 5 of GSTR 9 FY 23-24.
    • Reason – already disclosed and reconciled in GSTR 9 & 9C of FY 22-23
    • Impact – Table 9 of GSTR 9 FY 22-23 (> tax payable) , in FY 23-24 (< tax>

ITC disclosure in GSTR 9:

• ITC of FY 23-24 claimed in  FY 23-24 – part of table 6B
• ITC of FY 22-23 claimed in FY 23-24 but in 2B of FY 23-24 – part of table 6B
• ITC of FY 22-23 claimed in FY 23-24 and in 2B of FY 22-23 – part of table 6M/6B with table 8 adj. (verify Table 13 of FY 22-23)
• ITC of FY 23-24 claimed in FY 24-25 and in 2B of FY 23-24 – part of table 8C & table 13
• ITC of FY 23-24 claimed in FY 24-25 but in 2B of FY 24-25 – part of table 13 only

Table 6M may comprise of the following:

• Form ITC-01 / ITC-02 (conversion from composition scheme / transfer due to sale, merger, etc.)
• ITC of FY 22-23 (in GSTR 2B of that period) but ITC claimed in GSTR 3B of 23-24.
• ITC temporarily reversed, re-claimed and permanently reversed/claimed. (double disclosure in GSTR 3B compensated once in 6B and once in 6M).
• Credits claimed under protest, i.e. ITC claimed and reversed in GSTR 3B.

The above disclosures may result in a temporary variance in table 6J although table 6O shows NIL variance. Alternatively, taxpayers may consider disclosing such ITC as inputs/capital goods in table 6B, and corresponding difference that arises due to such difference can be adjusted in table 8C during the table 8 GSTR 2B reconciliation.

Considering the changes in reporting of ITC under GSTR-3B, wherein ITC is claimed in Table 4.A.5 and then reversed under Table 4.B.1 or 4.B.2 could lead to inaccurate disclosure in table 6B of GSTR 9. This would lead to incorrect reconciliations in table 8 when compared with GSTR 2A. The same has been displayed by way of an illustration below:

Assume data as per GSTR 3B for FY 2023-24 as follows:

Table 4.A.5 – IGST – Rs. 1 lakh ; CGST/SGST – Rs. 2 lakh each

Table 4.B.1 – IGST – Rs. 0.15 lakh ; CGST/SGST – Rs. 0.30 lakh each

Table 4.B.2 - IGST – Rs. 0.20 lakh ; CGST/SGST – Rs. 0.50 lakh each

Net ITC as per Table 4C – IGST – Rs. 65,000 ; CGST/SGST – Rs. 1,20,000

Note – Where GSTR 2B figures are higher than values as per table 6A - the differential balance may be considered in table 8E/8F (lower value may indicate credit notes raised by vendors but not accepted by recipient)

Important information:

•  Taxpayers need not file annual return in?FORM GSTR-9/9A?for FY 2023-24 if their aggregate annual turnover is up to Rs. 2 crores. (If 9 not filed, 9C not required)
• Taxpayers having turnover more than Rs. 5 crores are required to file GSTR 9C. Therefore, those persons between Rs. 2 crore & Rs. 5 crores need not file Form GSTR 9C but require filing GSTR 9.
•  Liability as per table 4 (incl. Adjustments in table 10 & 11) must be considered as final liability (as per books) irrespective of liability disclosed in GSTR 3B + Form DRC-03 during the FY.
• Time period for transactions of previous year disclosed in next financial year until specified period means details disclosed for FY 2023-24 up to 30^th November 2024.
• Department may dispute difference in table 6J of GSTR 9, one must ensure invoice level reconciliation is available and table 7J matches to ITC claimed in GSTR 3B.
•  Payments to be made through Form DRC-03. Utilization of ITC as per the CGST Rules is restricted, although, it can be disputed based on interpretation arising from section 49(4) r/w Rule 86(2). Additionally, the GST portal also allows such ITC utilization.
•  As ITC claim and matching of credit is being checked via GSTR 2B Vs GSTR 3B vide Form DRC-01C, any notices raised based on table 8 disclosure of GSTR 9 would not seem relevant and appropriate anymore.

Form GSTR 9C – Reconciliation Statements –:

1. Table 5B – Turnover reconciliation – Unbilled Revenue at the beginning of the year can be merged and disclosed in table 5O.
2. Other Turnover reconciliations from table 5C to 5N – Must be disclosed separately and cannot be clubbed under Table 5O. Earlier, relaxation was available till FY 2021-22 as single disclosure in table 5O.
3. Table 12B & 12C – No more optional, mandated to disclose such ITC details.
4. New rate of 6% (3% CGST & 3% SGST) included in respective tables (applicable for Brick Manufacturing)
5. Table 14 – Remains optional to fill expense wise ITC claim details (this may also be available from disclosure in clause 44 of Tax Audit Form 3CD)

Note-1: Pre-requirement to 9&9C – all GSTR 1 & GSTR 3B for FY 2023-24 must be filed

Note-2: Form GSTR 9 & GSTR 9C – once filed cannot be revised. (suggested to file together)

Advanced Issues & Solutions

1. Credit Note disclosures – The wordings in table 4 of GSTR 9 is confusing as the heading is transactions for the year, whereas, CN raised against invoices above leads to an interpretation where CNs raised in the next financial year (within timelines) could be considered. In our view, CNs raised in next financial years must be disclosed in such period as it is not a transaction of the previous financial year.
2. Tackling Deferred ITC ledgers – After the restriction on ITC claim based on GSTR 2B reflection, many eligible ITC may not have been claimed and maintained in deferred ledgers. The disclosures for the same must be considered in Table 13 of GSTR 9 to the extent claimed in 1^st Apr- 30^th Nov 24 period. In GSTR 9C - Table 12A to include entire ITC as per books, table 12C can be matched with GSTR 9 table 13 figures. Similarly additional disclosures in the next financial year would be in table 6B/6M of GSTR 9, and Table 12B of GSTR 9C. 
3. Table 8C Vs Table 13 in GSTR 9 - The reasons for differences would be: Table 13 consists of ITC on imports & inward supplies liable to reverse charge which must not be disclosed in 8C. Also, goods/services in transit would need to be disclosed in table 8C but not in table 13. (those invoiced earlier, but goods/services received in next tax period)
4. Table 8K analysis – ITC to be lapsed does not specifically mean that such ITC will be reduced from electronic credit ledger directly. This is only an indication to the dept. of the extent of ITC available on record to assessee but unclaimed.
5. Negative ITC in table 4C of GSTR 3B – The negative ITC (meaning tax liability) in table 4C of Form GSTR 3B will ensure in table 9-GSTR 9 such amount is considered in tax paid although such values would not reflect automatically and therefore, it may need to be added in table 7H and also in table 9 (tax payable) to ensure reconciliation. This would also impact similar disclosures in table 9 of GSTR 9C. Alternatively, reasons for variance in table 9 can be maintained without any such adjustments.
6. Table 7E vs Table 9 of GSTR 9C – Although this is not a mandated reconciliation, this check ensures that the taxable value as per books (considered rate wise) matches to the taxable value as reconciled in the previous tables. Ensure that table 9 of GSTR 9C is filled only as per books irrespective of disclosure in GSTR 3B or GSTR 

Best Practices & Tips:

1. Maintain 9 & 9C workings with links to all the relevant data. Avoid keyed-in workings.
2. Maintain separate details of ITC claimed, reversed, and re-claimed if the taxpayer fulfils the conditions mentioned u/s 16.
3. In case of amendments, outward register to be maintained with original values, so that it will be helpful while table 4 & 5 of GSTR 9.
4. Invoice level GSTR 2B Vs ITC as per books reconciliation is to be performed for Table 8 disclosure in GSTR-9.
5. Credits as per books – unclaimed due to non-matching with GSTR 2B. Pass as expense in books of accounts of FY 2023-24 and verify option of recovery from continuing vendors.
6. Providing an “Annual GST - Management Report” which may consist of the following:

• Folder with final workings and filed Form GSTR 1, 3B, GSTR 9 & 9C for the FY.
• Reconciliations for the FY – Outward, Inward & RCM – birds eye view
• Reasons for variances and action taken (summarily)
• Where additional liability was noticed – summary details + payment documentation
• Suggestions on internal accounting/processes/reporting going forward

Conclusion

The activity of filing Form GSTR 9 & 9C  with the recent changes has become more complex although it is expected to show the final values (with corrections if any) for a financial year appropriately. The department is also using this as a document for scrutiny. Therefore, putting in place procedures to ensure accurate data capture and reporting is imperative. Availing the services of expert professionals may help resolve various non-compliances made inadvertently and also gain insights into data documentation and availability.

Suggestions or feedback at [email protected] or [email protected]