SIGN IN SUBSCRIBE

News Update

Cus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaGST - Conclusion that taxable person is providing a service to supplier while taking the benefit of a discount by facilitating an increase in the volume of sales of such supplier is ex facie erroneous and contrary to the fundamental tenets of GST law: HCIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesI-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HCRailways earns Rs 14798 Crore from Freight loading in June monthI-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITATMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorI-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITATGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT
 
GST - Annual Return and Reconciliation: Ambiguities persist

 

MAY 21, 2019

By Lukose Joseph (CA) & Anil P Nair (CA)

THE Tiger near the door

Finally time has arrived for registered persons under GST and hence their Chartered Accountants to confront the tiger and it is near the door. GSTR9 due date for the very first year (period) of GST, 2017-18 is June 30, 2019 and even the second one for the year 2018-19 is not very far. GSTR9 is being filed once a year by all registered tax payers and is expected to consolidate all the information filed so far in the Returns for the reference year with details of supplies received and made under CGST, SGST and IGST.

Reconciliation and the Credit/Debit Note conundrum

Accountants of Taxpayers are going through a harrowing period of filling up the Annual return and reconciling with the Audited Accounts to make both ends meet! We are in the third year since the evolution of GST era; yet the forms cannot be said to be fully equipped to capture the intricacies in every industry. Thoroughly revised now, these Annual Return and Reconciliation Statement forms still throw up ambiguities.

Current Year

Usage of words 'current year' and 'previous year' in Part V of Form GSTR- 9 (Hereinafter referred to as Form 9 or Annual Return), read with corresponding instructions 10 and 11 of the said form and instruction 3 and instruction for 5E of GSTR-9C (Hereinafter referred to as Form 9C or Reconciliation Statement) is not matching. See below-

Part V of Form 9 reads as follows:

Particulars of the transaction of the previous FY (Financial Year) declared in returns of April to September of 'current FY' or up to date of filing of annual return of previous Financial Year…

Now, Instruction Number 3 of Form 9C reads as follows.

The reference to 'current financial year' in this statement is the financial year for which the reconciliation statement is filed for.

This means in Form 9C, "Current Year" for Reconciliation Statement prepared for 2017-18 is year 2017-18 only whereas in Form 9, "current year" for Annual Return prepared for 2017-18 is not 2017-18 but it is 2018-19.

In our opinion, it is better to have homogeneity in definition or meaning of a word all through the law, rule and forms prescribed so as to shun confusion and serve better perception.

Failure of Supplier, Penalty for Assessee

Table 8A of Form 9 is auto populated as effect of supply uploaded by suppliers during the year and post financial year. Wrong uploading or failure to upload by the supplier will be disclosed in Table 8D which eventually ends up in show cause notice. The column is so unstable and subject to changes every moment.

No column for Debit Note

Special Table is provided for credit note in Form 9C (Please see Table 5E), but no such column provided for debit notes. Column for "others" may take care of such ambiguity. But in our opinion it is better not to give scope for improvisation for taxpayers.

Why a Form at all for reconciliation? Why not a general remark to provide reconciliation for sales, purchase, tax credit and tax payment instead of providing a
comprehensive format with vagueness for reconciliation.

May be a careful reading of instructions and some practical thinking may solve the issue but prefer to have uniformity in definition/meaning in legal drafting.

Made vs. Declared

Two views are probable on disclosure in Table 4 of Form 9.

Details of advances and supplies made during the financial year shall contain information provided in July to March and adjustments pertaining to 2017-18 made during April to September 2018 shall be made in Table 10 and 11 of Form 9.

Another view is invoices as well as amendments connected to 2017-18 will be reported in Table 4 of Form 9 being the words "made" brought to form in place of
"declared".

Reconciliation (An Example)

Below we are giving a simplified version of an Annual Return and its Reconciliation.

We were presented with a query on reconciliation aspect of credit note/debit note relating to the relevant 'current financial year', but issued after the end of such financial year. (See Table 5E and 5O of Form 9C) Those which are already provided in the audited accounts for the relevant financial year and those which are not given such impact in relevant financial year are both disclosed in Table 10 and 11 of Form 9C.

Here we are trying to reconcile these transactions of credit note and debit note which are issued in Current Year (2018-19) after the close of the Financial Year 2017-18 and reflected in monthly returns of 2018-19 but relating to Annual Return for financial year 2017-18. If you are still having confusion with the usage of the word current year, we are helpless!

In fact, the issue relates to the accounting treatment given during the finalizing of the accounts. We are trying to answer the impact of the accounting treatment on GST Annual Return and Reconciliation.

Here it is assumed that in the given example, details of advances and supplies made during the financial year (Table 4) shall contain information provided in July to March and adjustments pertaining to 2017-18 made during April to September 2018 shall be made in Table 10 and 11 of Form 9 and taxable value and tax payable on reverse charge basis (Table 4G) is Nil.

The Query

Supplies and advances on which tax is to be paid is Rs. 100/- and hence the total turnover is Rs. 100/-. Debit Notes relating to 2017-18 were issued for Rs. 5 and Rs. 3 respectively during 2017-18 and 2018-19. Credit Notes relating to 2017-18 were issued for Rs. 8 and Rs. 7 respectively during 2017-18 and 2018-19. Out of the above debit note for Rs. 3/-, Rs. 1/- was adjusted in the Audited Annual Accounts of 2017-18 along with the Debit Note of Rs. 5/-. Out of the above credit note for Rs. 7/-, Rs. 4/- was adjusted in the Audited Annual Accounts of 2017-18 along with the Credit Note of Rs. 8/-. Turnover as per Audited Annual Accounts was Rs. 94/-. How do we give effect to above in Annual return and Reconciliation?

The Solution

See how the above information is given effect:

GSTR 9 (ANNUAL RETURN)

Sl. No.

Table

Particulars

Rs.

Notes

1

4G 

Inward supplies on which tax is to be paid on reverse tax 

 0

 

2

4N

Supplies and advances on which tax is to be paid

100

 

3

5M

Turnover on which tax is not to be paid

0

 

4

5N

Total Turnover(4N+5M-4G)

100

 

5

10

Supplies/tax declared through amendments(+)

8

Ref Note 1

6

11

Supplies/tax reduced through amendments(-)

15

Ref Note 2

7

 

(4N-4G)+(10-11)

93

 

 

 
Particulars
Rs
 
Note 1

Debit Note issued during Feb 18 shown in return of May 18

Debit Note issued in May 18 but related to transaction of Feb 18

5

3
Ref Note 3
 
TOTAL :
8
 
Note 2

Credit Note issued on Feb 18 shown in return in May 18

Credit Note issued on May 18 but related to transaction of Feb 18

8

7
Ref Note 4
 
TOTAL :
15
  
Note 3
Out of Rs. 3, provision for Rs. 1 made in current year accounts and balance Rs.2 taken in reconciliation
   
Note 4
Out of Rs. 7, provision for Rs. 4 made in current year accounts and balance Rs.3 taken in reconciliation
   

GSTR 9C (RECONCILIATION)

Table No.
Particulars
Rs
 
5A
Turnover as per audited financial statements
94
Ref Note 5
5E
Credit Note issued after the end of the financial year but reflected in Annual Return (Note 4 )
-3
 
5O

Adjustment in TO due to reason not listed above.

(Debit Note not taken in P& L)

(Note 3)

+2
 
 
7F -Taxable Turnover as declared in Annual Return in agreement with (4N-4G)+(10-11) of Form 9
93 
 
Note 5
Amount
Particulars
 
 
100
Ref 5N OF 9
 
 
+5
Ref Note 1
 
 
-8
Ref Note 2
 
 
+1
Ref Note 3
 
 
-4
Ref Note 4
 
 
94
Turn over as per audited financial statements
 

We hope the given reconciliation is clear to our readers. We wholeheartedly invite further opinions.

(The views expressed are strictly personal)

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
India's Path to Becoming a Superpower: An Interview with Pratap Singh

TOP NEWS


AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST