The complexities of Goods and Services Tax (GST) compliance continue to evolve with frequent amendments to the law. For FY 2023–24, filing annual returns (Form GSTR 9) and reconciliation statements (Form GSTR 9C) has become a critical process, especially in light of departmental audits. This blog aims to simplify the intricacies of these filings, covering reconciliations, updates, best practices, and actionable tips to ensure compliance.

Navigating GST Annual Return Filing: Key Updates and Best Practices for FY 2023–24

Impact of Departmental Audits on Annual Return Filing

The outcomes of departmental audits can significantly influence the accuracy and structure of GST annual return filings. Keeping pace with changes and reconciling books accurately is crucial for avoiding penalties and ensuring smooth compliance.

Key Reconciliations for Annual Return Filing

1. Turnover Reconciliation
   Compare audited financial statements (AFS/Books) with Table 5A in GSTR 9, ensuring all GSTINs under the entity are included.
2. Outward Taxes Reconciliation
   • Match the liability reported in books with GSTR 3B and any liabilities settled via DRC-03, ensuring reverse charge mechanism (RCM) liabilities are considered.
   • Validate rate-wise liability against the internal workings to ensure accuracy.
3. Inward Taxes (ITC) Reconciliation
   • Identify discrepancies between ITC claims in books and GSTR 3B. Adjustments for missed ITC must be claimed by October 2024 in the November return filing.
4. Closing Balances
   • Ensure cash and credit balances in the books match the balances on the GST portal for all GSTINs.
5. Spillover Transactions
   Track and provide for transactions from the previous year, ensuring they are into account for in the next financial year.
6. GSTR 1 vs. GSTR 3B
   Align these forms to ensure GSTR 9 can be prepared without discrepancies.

Key Changes for FY 2023–24

1. E-Commerce Transactions
   • Table 4G1: Reports supplies where e-commerce operators are liable to pay tax under Section 9(5).
   • Table 5C1: Covers taxable supplies by e-commerce operators.
2. Reconciliation and Formula Updates
   Changes in Table 5N formulas and reconciliations due to new reporting requirements.
3. ITC Reporting Transition
   ITC data will now align with GSTR 2B (Table 3(I)) instead of GSTR 2A, in line with Section 16(2)(aa) and Rule 36.
4. Additional Reporting Requirements
   Include GSTR 1A data where applicable and adjust reporting periods as mandated.

Retained Relaxations

1. Table 4 Adjustments
   Report Amendments, credit notes, and debit notes separately.
2. Simplified ITC Reporting
   • Consolidate ITC under “Inputs” or RCM categories where applicable.
   • Reversals can be grouped under Table 7H, with TRAN-specific reversals disclosed separately.
3. Optional Reporting
   Fields like refund details (Table 15), deemed supplies (Table 16), and inward HSN details (Table 18) remain optional.
4. HSN Disclosures
   • 6-digit level for turnovers above ₹5 crore.
   • 4-digit level for B2B transactions under ₹5 crore.

Best Practices and Tips

• Maintain Real-Time Records: Track reconciliations throughout the year to reduce last-minute adjustments.
• Automate Reconciliations: Leverage tools to align GSTR 1, GSTR 3B, and books efficiently.
• Prepare for Audits: Conduct departmental audits with proper documentation to avoid discrepancies.
• Focus on Deadlines: Rectifications and ITC adjustments beyond the November 30 deadline are not permissible.

Conclusion

GST annual return filing requires meticulous attention to detail, especially with the new changes for FY 2023–24. By adopting best practices, reconciling accurately, and staying updated on regulatory changes, businesses can ensure compliance while optimizing processes.

Pitchers Global can help you simplify the annual GST return filing hassle-free with new updates and best practices.

---