We may recollect that Section 110 and 111 of the Finance Act, 2021 had amended Section 35 and 44 of the CGST Act, so as to remove the mandatory requirement of getting annual accounts audited by a chartered accountant or a cost accountant and furnishing of audited reconciliation statement in Form GSTR-9C. Rather, the reconciliation statement will now be provided by the tax payer on self-certified basis while filing the annual return in Form GSTR-9.
It is important to note here that, a proviso has been inserted in Section 44 of the CGST Act to provide that the Commissioner may exempt any class of persons from filing annual returns upon receiving such recommendation from the GST Council.
Further, the due date for filing annual return under Section 44 of the CGST Act, which was earlier provided in Section 44, as December 31 of every year, has now been deleted and it has been stated that the due date of filing will be prescribed by way of notifying rules.
Both the above Section 110 and 111 of the Finance Act, 2021 have been made operative by Notification No. 29/2021- Central Tax dated 30th July 2021 from 1st August 1, 2021.
With the above provisions made operational, the onus of responsibility of reconciliation of the figures of accounts with that of GST returns has now been shifted and completely rests with the taxpayers which may lead to short payments.
It is important to note here that inter-alia Press Release issued post 43rd GST Council Meeting reads as under:
Amendments in section 35 and 44 of CGST Act made through Finance Act, 2021 to be notified. This would ease the compliance requirement in furnishing reconciliation statement in FORM GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for Annual Return for FY 2020-21.
Amendments made operational at a glance:
Section 110 of the Finance Act,2021 omitted sub-clause (5) of Section 35 of the CGST Act which was in regard to GST Audit. The erstwhile sub-clause reads as under:
“(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.
Provided that nothing contained in this sub-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.”
Section 111 of the Finance Act substituted Section 44 of the CGST Act as under:
“44. Annual return.
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 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 manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section:
Provided further 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.”
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
