CGST Section 44 — Annual return

CGST Act · Annual return

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Quick Answer

Section 44 of the CGST Act, 2017 governs Annual return. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 44 GST: Annual return — eligibility, conditions, case laws and compliance impact under Indian tax law.

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Plain-English Explanation

Plain English Summary

Section 44 of the CGST Act deals with the annual return that GST-registered taxpayers are required to file. This return provides a consolidated summary of all outward and inward supplies, taxes paid, refunds claimed, and input tax credit availed during a financial year.

This section essentially mandates that every registered person under GST, with a few exceptions, must file an annual return. The key exceptions are:

Input Service Distributors (ISDs): These entities distribute input tax credit to their branches or units.
Those paying tax under sections 51 and 52: This includes those involved in Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
Casual Taxable Persons: Individuals or businesses who occasionally undertake taxable supplies in a state or union territory where they are not registered.
Non-Resident Taxable Persons: Those who supply goods or services in India but do not have a fixed place of business here.

The law requires the annual return to be filed electronically, within a prescribed time frame, form, and manner. While the original text specified a deadline of December 31st following the end of the financial year, the current provision leaves the specific deadline and other details to be prescribed through rules. In practice, this deadline is often extended by the government through notifications.

Further clarifications and exceptions exist as well. Section 44 states the annual return can include a self-certified reconciliation statement. This reconciles the value of supplies declared in the GST returns filed throughout the year with the audited annual financial statements. The government can also exempt certain classes of registered persons from filing the annual return altogether, based on the GST Council's recommendations.

Importantly, the section contains an exemption for government departments (Central and State) and local authorities whose accounts are audited by the Comptroller and Auditor-General of India or a designated auditor.

A significant recent amendment establishes a time limit for filing the annual return. A registered person cannot file the annual return more than three years after the original due date. The government, however, retains the power to relax this rule, allowing filing even after this three-year period, subject to conditions and restrictions.

For instance, consider a small business owner, Mr. Sharma, who runs a retail store. He is registered under GST and has a turnover exceeding the threshold for audit. After the end of financial year 2023-24, Mr. Sharma is required to reconcile all his sales and purchases declared in his monthly/quarterly GST returns (GSTR-1 and GSTR-3B) with his audited financial statements. He will use the prescribed form, GSTR-9, to file his annual return, including the self-certified reconciliation statement. Suppose the due date for filing GSTR-9 for 2023-24 is December 31, 2024. He can file the annual return until December 31, 2027. Post this date, the ability to file the return is lost forever, unless a notification extends it for a class of taxpayers, as allowed by the Act.

This section, with its amendments, is a critical aspect of GST compliance. It emphasizes the importance of maintaining accurate records and reconciling them with financial statements to ensure accurate tax reporting. Businesses should pay close attention to the prescribed forms, deadlines, and any notifications issued by the government regarding exemptions or extensions to remain compliant with GST regulations.

Section 44. Annual return. -¹

(1)² Every registered person, other than an Input Service Distributor, a person paying tax undersection 51orsection 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 manneras may be prescribed: Providedthat the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section: Providedfurther 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.](1)² Every registered person, other than an Input Service Distributor, a person paying tax undersection 51orsection 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 manneras may be prescribed: Providedthat the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section: Providedfurther 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.]

(2) A registered person shall not be allowed to furnish an annual return under sub-section (1) for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return: Provided that the Government may, on the recommendations of the Council, by notification, and subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish an annual return for a financial year under sub-section³

(1), even after the expiry of the said period of three years from the due date of furnishing the said annual return.] "Section 44. Annual return.

(1)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 for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. [Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]

(2)Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed. [Explanation.- For the purposes of this section, it is hereby declared that the annual return for the period from the 1st July, 2017 to the 31st March, 2018 shall be furnished on or before the [31st January, 2020]and the annual return for the period from the 1st April, 2018 to the 31st March, 2019 shall be furnished on or before the 31st March, 2020.]"

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Frequently Asked Questions

Who is required to file the annual return under CGST Section 44 (GSTR-9)?

Every registered person under GST, except Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person, and a non-resident taxable person, is required to file the annual return in Form GSTR-9. Composition dealers file GSTR-9A.

What is the due date for filing the annual return (GSTR-9)?

The due date for filing the annual return (GSTR-9) is 31st December of the year following the financial year. However, the government may extend the due date through notification.

What are the consequences of not filing the annual return (GSTR-9) by the due date?

Failure to file the annual return by the due date attracts a late fee of ₹200 per day (₹100 per day under CGST and ₹100 per day under SGST/UTGST) subject to a maximum of 0.5% of the turnover in the State or Union territory.

What details are required to be furnished in the annual return (GSTR-9)?

GSTR-9 requires summarized details of all outward and inward supplies declared during the financial year under various tax heads. It consolidates information from GSTR-1 and GSTR-3B returns filed throughout the year, along with reconciliation statements. Key areas include details of supplies, taxes paid, refunds claimed, and demands confirmed.

Is there a simplified version of the annual return for small taxpayers?

Yes, taxpayers with aggregate turnover up to ₹2 crore (as amended from time to time) in a financial year can file GSTR-9A (if applicable) or GSTR-9 (simplified form). The government may also provide relaxations for specific categories of taxpayers.

What is the difference between GSTR-9 and GSTR-9C?

GSTR-9 is the annual return filed by regular taxpayers. GSTR-9C is a reconciliation statement required to be filed by taxpayers with aggregate turnover exceeding ₹5 crore (as amended from time to time) during the financial year. It reconciles the figures declared in GSTR-9 with the audited annual financial statements.

Can I revise the annual return (GSTR-9) after filing it?

No, as per current regulations, the annual return (GSTR-9) once filed cannot be revised. Therefore, it is crucial to carefully review and verify all the information before submitting the return.

Key Conditions & Requirements

Condition	Details
Who must file?	Every registered person is required to furnish an annual return.
Exempted persons	Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person are exempt from filing the annual return.
Contents of Annual Return	The annual return 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
Manner of filing	The annual return must be furnished electronically.
Form, Time and Manner	Annual return to be furnished within such time and in such form and in such manner as may be prescribed
Exemption by Commissioner	The Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return.
Exemption for Government departments/local authorities	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, are exempt.

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Amendment History

123Superscript numbers in the text mark amended passages — click them to jump here. Click "↑ view in text" to jump back.

2021↑ view in text

Substituted by s. 111 of The Finance Act, 2021 dated 28-03-2021 and brought into force w.e.f. 01.08.2021 vide Notification no.29/2021- central tax dated 30.07.2021 for:

2023↑ view in text

Renumbered as sub-section (1) ( w.e.f. 1st October, 2023 vide Notification No. 28/2023-C.T. , dated 31st July, 2023. ) by s. 144 of The Finance Act 2023 (No. 8 of 2023).