GST Annual Return & Audit (GSTR 9 & GSTR 9C) For FY 2020-21
Hon’ble Finance Minister, Smt. Nirmala Sitharam in her Budget Speech on 1st day of February, 2021, omitted Section 35(5) and substituted Section 44 by Section 110 & 111 of the Finance Act, 2021 respectively in the CGST Act, 2017, so as to remove the mandatory requirement of furnishing a Reconciliation Statement (GSTR-9C) duly audited by a Practicing Chartered Accountant or a Cost Accountant.
In 43rd GST Council Meeting, dated May 28, 2021 the council decided to amend Section 35 and Section 44 of the CGST Act as per Finance Act, 2021 and the changes will be applicable for the Financial Year 2020-2021. It was also decided on that meeting that GSTR 9/9A for Financial Year 2020-2021 will be optional for taxpayers having aggregate Annual Turnover up to Rs.2 Cr. and reconciliation statement in Form GSTR 9C will be made optional for taxpayers having aggregate Annual Turnover up to Rs.5 Cr.
On 30th of July, 2021 the Council notified about the same through Notification No. 29/2021, as the date of applicability of Section 110 and 111 of the Finance Act, 2021 will be 1st of August, 2021. i.e. form 1st of August, 2021, Section 35 and Section 44 will be amended as follows:
In section 35 of the Central Goods and Services Tax Act, sub-section (5) shall be omitted. [Sec. 110 of The Finance Act, 2021]
For section 44 of the Central Goods and Services Tax Act, the following section shall be substituted, namely:––
“44. Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section:
Provided further that nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”. [Section 111 of the Finance Act, 2021]
The above notification created a huge confusion regarding the interpretation of effective date of amendment as 1st of August, 2021. i.e. whether this amendments are applicable for returns filed after 1st of August, 2021, or this amendments are applicable for returns filed for the period form 1st August, 2021.
Though all of us are seeking for some further clarification regarding this issue, still, to my humble view this amendment will be effective for the Financial Year 2020-21, as the Council had already decided that in the 43rd Council Meeting. Notification No. 30/2021 – Central Tax, dated 30th July, 2021 which amends Rule 80 of the CGST Rules, 2017 giving effect for the Financial Year 2020-21, omits Part B i.e. Auditor’s Certification Part from Form No GSTR 9C and strikes off the term “auditors recommendation”. Which also implies that Auditor Certification is not required for GSTR 9C filed for the Financial Year 2020-21.
Notification No. 30/2021 – Central Tax, dated 30th July, 2021 amends Rule 80 of the CGST Rules, 2021 as a Self-Certified Reconciliation statement in GSTR 9C is exempted for following registered persons:
> Any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force
> Input Service Distributor
> Registered persons Deducting Tax at Source as per Section 51 of the Act
> E-Commerce operators, liable to collect and pay tax as per Section 52 of the Act
> Casual taxable Person
> Non Resident Taxable Person
> Any other registered person who’s Aggregate Turnover during a Financial Year does not exceeds Rs.5 Cr
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Neeraj is a member of the Institute of Chartered Accountants of India. His core area is GST consultancy and its compliance. Currently, he leading a GST team in a CA Firm.