Filing the GSTR-9 annual return is a critical task for businesses under the Goods and Services Tax (GST) system in India. This form consolidates the information provided in monthly and quarterly returns filed during the financial year. While the process may seem straightforward, businesses often make mistakes that can lead to penalties, notices, or even audits. Here’s a detailed guide on common mistakes in GSTR-9 filing and how to fix them effectively.

1. Incorrect Reporting of Input Tax Credit (ITC)

One of the most common errors in GSTR-9 filing is incorrect reporting of Input Tax Credit (ITC). This happens when the ITC claimed does not match the details in GSTR-2A or GSTR-2B.

How to Fix:

• Cross-check ITC details with GSTR-2A and GSTR-2B before filing.
• Ensure ITC claimed during the financial year is properly categorized.
• Maintain accurate purchase records to support ITC claims.

2. Mismatch Between GSTR-1, GSTR-3B, and GSTR-9

Discrepancies between the outward supplies reported in GSTR-1, the tax paid in GSTR-3B, and the consolidated figures in GSTR-9 can lead to scrutiny.

How to Fix:

• Reconcile sales details reported in GSTR-1 and GSTR-3B.
• Ensure that figures in GSTR-9 are consistent with both forms.
• Use reconciliation tools or software to identify discrepancies.

3. Incorrect Turnover Reporting

Turnover discrepancies are often due to errors in including or excluding certain transactions, such as export sales or exempt supplies.

How to Fix:

• Verify turnover from audited financial statements.
• Include all taxable, exempt, and zero-rated supplies.

• Cross-check turnover with GSTR-1 and GSTR-3B filings.

4. Non-Reporting of Amendments

Amendments made in subsequent returns are often overlooked while filing GSTR-9, leading to incomplete reporting.

How to Fix:

• Review all amendment invoices issued during the year.
• Ensure that both upward and downward adjustments are correctly reported.

5. Incorrect Late Fee and Interest Calculation

Failure to correctly calculate late fees and interest for delayed tax payments can lead to underreporting.

How to Fix:

• Calculate late fees and interest based on the actual delay.
• Ensure accurate reporting in Table 8 and Table 14 of GSTR-9.

6. Errors in HSN Summary

Misreporting or missing Harmonized System of Nomenclature (HSN) codes is another common mistake.

How to Fix:

• Ensure HSN codes are consistent with invoices.
• Verify turnover under each HSN category.

7. Non-Reconciliation with Books of Accounts

Failure to reconcile GSTR-9 with books of accounts can lead to inconsistencies and audit risks.

How to Fix:

• Reconcile turnover, ITC, and tax paid with financial statements.
• Ensure all adjustments and corrections are accounted for.

8. Overlooking Reverse Charge Mechanism (RCM)

Many businesses forget to include transactions under the reverse charge mechanism.

How to Fix:

• Review purchases for reverse charge applicability.
• Report tax paid under RCM in the relevant tables of GSTR-9.

Conclusion

Avoiding common mistakes in GSTR-9 filing requires careful reconciliation, accurate record-keeping, and thorough review. Businesses should leverage accounting software and professional assistance to ensure error-free filing. ASK ASSOCIATES can assist in ensuring a smooth filing process, reducing the risk of penalties and notices.

Penalty for Late Filing of GST Annual Return: What You Should Know?

Timely filing of the GSTR-9 annual return is crucial to avoid penalties and maintain compliance under the GST regime. Missing the deadline can result in significant financial penalties and other complications. Here’s an in-depth look at the penalties associated with late filing and how to mitigate them.

1. Late Fee for Delayed Filing

If the GSTR-9 is not filed by the due date, the taxpayer is liable to pay a late fee under both the Central GST (CGST) and State GST (SGST) components.

Penalty Structure:

• CGST: INR 100 per day of delay.
• SGST: INR 100 per day of delay.
• Total: INR 200 per day of delay.
• Maximum late fee: 0.25% of the taxpayer’s turnover in the relevant state or union territory.

Example: If a business with an annual turnover of INR 1 crore delays filing by 10 days, the late fee would be INR 2,000 (INR 100 x 10 days x 2).

2. No Late Fee Under IGST

There is no separate late fee under the Integrated GST (IGST) Act. However, the combined CGST and SGST late fee applies.

3. Interest on Delayed Tax Payment

If there is any tax liability outstanding, an interest of 18% per annum is levied on the unpaid amount from the due date until payment.

Example: If INR 10,000 is due in tax and paid 30 days late, the interest would be approximately INR 150 (10,000 x 18% / 365 x 30).

4. Risk of Notices and Scrutiny

Continuous non-compliance can trigger notices from the GST department, increasing the risk of audits and penalties.

5. Impact on ITC Claims

Delayed filing can lead to restrictions on claiming Input Tax Credit (ITC), affecting cash flow and increasing tax liability.

6. How to Avoid Late Filing Penalties

• Set Reminders: Ensure timely filing by setting calendar reminders for due dates.
• Regular Reconciliation: Reconcile GSTR-1, GSTR-3B, and GSTR-9 periodically.

• Professional Assistance: Engage tax consultants like ASK ASSOCIATES for accurate and timely filing.

Conclusion

Late filing of GSTR-9 not only incurs financial penalties but also increases compliance risks. Staying organized, maintaining accurate records, and seeking professional guidance can help businesses avoid such penalties and ensure smooth GST compliance.