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

Note 1 - 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 30th 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 to5N - 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. Rule 37A compliance - Ensuring vendors' file their GSTR 1 correctly is not sufficient anymore, vendors' must also file their GSTR 3B to ensure ITC is eligible to the recipient (rule 37A introduced in Dec '22 r/w s 16(2)(c)), GSTR-2A provides the status of vendor 3B filing status. ITC reversed under this rule can be claimed once vendor files the GSTR 3B. As there is no specific row available in table 7 of GSTR 9, it can be disclosed under table 7H with specific wordings for clarity.

2. Credit Note disclosures -The wordingsin 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.

3. 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 1st Apr- 30th 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.

4. 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)

5. Table 8K analysis - ITC to lapse 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.

6. 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.

7. 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 9.

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 - bird's 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 yearappropriately. 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.

The authors can also be reached at mahadev@hnaindia.com or akshay@hnaindia.com