Why an annual return exists separately from monthly returns
Monthly or quarterly returns capture a period at a time; the annual return brings the whole year together in one place, and reconciles it against amendments, credit notes and corrections made across the year that might not otherwise be visible in any single period. It's also, in practice, one of the documents the department reviews most closely when deciding whether to initiate a departmental audit under Section 65 — see our GST audit & departmental audit support page for more on how that process works.
A common point of confusion is worth clearing up directly: the CA-certified GST audit that GSTR-9C used to require was abolished from FY 2020-21 onward. GSTR-9C today is a self-certified reconciliation — we prepare the working papers and the reconciliation itself, but the taxpayer certifies the final statement, not RITS & Associates as a signing auditor.
GSTR-9 compared with GSTR-9C
| Feature | GSTR-9 | GSTR-9C |
|---|---|---|
| What it is | Annual return consolidating the year's GST filings | Reconciliation statement between GSTR-9 and the audited financial statements |
| Threshold | Aggregate turnover above ₹2 crore (optional below) | Aggregate turnover above ₹5 crore |
| Certified by | Filed by the taxpayer | Self-certified by the taxpayer (CA certification removed from FY 2020-21) |
| Filed together? | Yes, by the same 31 December due date, where both apply | |
Documents required
- All GSTR-1 and GSTR-3B returns filed for the financial year.
- Audited financial statements for the year (for GSTR-9C reconciliation).
- Details of all credit and debit notes issued or received during the year, including those relating to the prior year but reported in this one.
- HSN-wise summary of outward and inward supplies.
- Input tax credit register, reconciled against GSTR-2B for the full year.
- Details of any demand, refund, or amendment relating to the year, including anything still pending.
The annual return process, step by step
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Consolidating the year's filings
All GSTR-1 and GSTR-3B returns for the year are pulled together and checked for internal consistency before the annual figures are compiled.
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Reconciliation against the books and financial statements
Turnover, tax paid and input tax credit as per the GST returns are reconciled against the audited financial statements — this is the core of what GSTR-9C captures for businesses above the ₹5 crore threshold.
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Identifying and explaining variances
Differences between the GST returns and the books — timing differences, credit notes, or genuine discrepancies — are identified and documented with an explanation, since an unexplained variance is exactly what draws departmental attention.
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Preparing GSTR-9 and, where applicable, GSTR-9C
The consolidated figures are populated into GSTR-9, and the reconciliation working papers into GSTR-9C where the turnover threshold applies.
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Client review and self-certification
For GSTR-9C, we hand over the completed reconciliation for the client's own review and self-certification — this is the step that changed in 2021, and it's the client, not RITS & Associates, who certifies the statement.
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Filing by the due date
Both returns are filed on the portal by 31 December, with any additional tax liability identified during reconciliation paid through Form DRC-03 before filing.
Due dates and penalties
| Default | Consequence |
|---|---|
| Late filing of GSTR-9 | Late fee per day of delay, subject to a cap linked to turnover |
| Non-filing of GSTR-9C where required | General penalty under Section 125, up to ₹25,000 |
| Additional tax liability found during reconciliation, paid late | Interest at 18% per annum from the original due date, not from the date the annual return is filed |
Practical notes from our engagements
- Reconciliation started only in November for a 31 December deadline. A full year's reconciliation against audited financials takes real time, particularly for a business with multiple GSTINs — starting well before the deadline is one of the more reliable ways to avoid a rushed filing.
- HSN-wise summary treated as an afterthought. This section is checked closely and is one of the more common sources of a mismatch flagged during scrutiny.
- Credit notes relating to the prior year left out of the current year's reconciliation. A credit note issued in the current year but relating to a supply from the prior year needs careful treatment in the annual return, and is easy to miss if the two years aren't reviewed together.
- Additional liability found during reconciliation paid without factoring in interest from the original due date. Interest runs from when the tax was originally due, not from the date the shortfall is discovered during annual reconciliation — a distinction that affects the amount actually payable through DRC-03.
- GSTR-9C treated as a formality since it's self-certified. Self-certification shifts legal responsibility onto the taxpayer, not away from scrutiny — a poorly prepared self-certified reconciliation is just as exposed to a departmental audit finding as the old CA-certified version was.
How we handle the annual return
We start the reconciliation early enough in the year — ideally once the statutory audit is substantially complete — that the GSTR-9C working papers are genuinely reviewed rather than assembled in the final weeks before the December deadline. Variances are investigated and documented as they're found, so the client's self-certification is backed by a clear explanation for anything that doesn't tie out neatly.
Related services
Frequently asked questions
Do I need to file GSTR-9 if my turnover is below ₹2 crore?
It's optional below ₹2 crore aggregate turnover — you can choose to file it, but it isn't mandatory.
Does GSTR-9C still need to be certified by a CA?
No. Mandatory CA certification of GSTR-9C was removed from FY 2020-21 onward. It's now self-certified by the taxpayer, though a CA firm can still prepare the reconciliation working papers.
What's the turnover threshold for GSTR-9C?
Above ₹5 crore aggregate turnover in the financial year. Below that, only GSTR-9 applies (if turnover is above ₹2 crore), and GSTR-9C isn't required at all.
Can I file GSTR-9 and GSTR-9C separately, at different times?
They're generally filed together, since GSTR-9C reconciles against the figures in GSTR-9 — filing them apart from each other isn't the normal process.
What happens if reconciliation finds tax that wasn't paid during the year?
It's paid through Form DRC-03 as part of the annual return process, with interest calculated from the original due date of the period it relates to, not from the date of the annual return.
Is there a penalty for not filing GSTR-9C when required?
Yes, a general penalty under Section 125 applies, up to ₹25,000, separate from any late fee on GSTR-9 itself.
Do I file one GSTR-9 for the whole business, or one per GSTIN?
One per GSTIN — a business with registrations in multiple states, or multiple registrations within a state, files a separate annual return for each.
Can last year's annual return be revised if an error is found later?
GSTR-9 generally can't be revised once filed; corrections are typically made through subsequent periods' returns or, where relevant, at the next year's annual reconciliation, subject to time limits worth confirming for the specific correction needed.
How does the annual return relate to a departmental GST audit?
It's one of the documents the department reviews when deciding whether to initiate an audit under Section 65, and it's compared closely against the underlying GSTR-1/3B filings and the financial statements.