IGI Logo

Taxpayers looking at ease of compliance requirement for filing annual GST returns for 2020-21 are in for a rude shock as the government has not completely done away with the process of including the reconciliation statement along with the returns.

The preparation of the reconciliation statement to tally with the numbers given in the annual returns is always a challenge for taxpayers and even tax experts face problems in finalising these.

According to a notification issued by the Central Board of Indirect Taxes and Customs (CBIC) late on Friday evening, every registered person, other than specified persons, whose aggregate turnover during a FY exceeds Rs 5 crore, will be required to furnish a self-certified reconciliation statement as specified under section 44 in FORM GSTR-9C along with the annual returns.

While the notification brings clarity over filing of annual GST returns for FY21, it has made self-certified reconciliation statement a part of GSTR 9 itself now. In simple words, GSTR 9C existing currently is removed and has been made a part of GST Annual Return GSTR 9.

"So, taxpayers having aggregate turnover above Rs 5 crore need to file self-certified reconciliation statement even for FY 2020-21 as a part of Annual Return. The notification has brought charity over this aspect of compliance," said Aditya Singhania, partner at Singhania GST Consultancy.

He added that the notification has also done away with the requirement of filing a GST reconciliation statement certified by chartered accountants (CAs) or cost and works accountants (CWAs).

"This should allow other professionals including legal counsellors working on GST cases to take up the preparing of reconciliation statement for taxpayers wherever required. But it also puts a responsibility on taxpayers to furnish details in Annual Return on true and correct basis on self-certification basis," Singhania said.

While clarifying on annual filing requirement for taxpayers, the CBIC notification has gone with changes incorporated in the Finance Act, 2021 for easing the compliance burden on taxpayers.

Accordingly, it has exempted registered persons whose aggregate turnover in FY 2020-21 is upto Rs 2 crore from filing of annual GST return. It is not clear whether taxpayers with turnover between Rs 2 and Rs 5 crore would be required to attach reconciliation statement along with annual returns. However, going by precedence such taxpayers may be given the option on filing the reconciliation statement.