QUESTION
As per clarification (i) issued by CBIC vide Press Note dated 03/07/2019, the annual aggregate turnover of supplies for the financial year 2017-18 are to be computed for the period 01/07/2017 to 31/03/2018 for the purpose of Reconciliation Statement GSTR-9C. In case the aggregate turnover is less than two crore rupees, then the registered person is not required to file GSTR-9C. Similarly, if the annual aggregate turnover is less than two crore rupees during financial year 2017-18, a registered person has an option not to file Annual GSTR-9 as per Circular No. 124/43/2019 dated 18/11/2019. In reply to various questions on the issue before 03/07/2019, the Law Crux Team has advised to take into account the aggrgate turnover of the registerd person for the whole financial year for the period 01/04/2017 to 31/03/2018 for the purpose of GSTR-9C. In my opinion, keeping in view the above clarification issued by the CBIC on GSTR-9C, the annual aggregate turnover for the financial year 2017-18 under GST regime i.e. for the period 01/07/2017 to 31/03/2018 should be computed for the period 01/07/2017 to 31/03/2018 for the purposed of GSTR-9 also. Please examine the issue at your end and intimate me your valuable advice.
ANSWER
As per law our reply was as follows:
Section 35(5) of CGST Act states that:
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.
Further, Rule 80 is reproduced below:-
CGST RULE 80
(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 nonresident taxable person, shall furnish an annual return as specified under sub-section (1) of section 44 electronically in FORM GSTR-9 through the common portal either directly or through a Facilitation Center notified by the Commissioner:
Provided that a person paying tax under section 10 shall furnish the annual return in FORM GSTR-9A.
(2) Every electronic commerce operator required to collect tax at source under section 52 shall furnish annual statement referred to in sub-section (5) of the said section in FORM GSTR -9B.
(3) Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.
In Rule 80, the prescribed limit is aggregate turnover in FY. The definition of aggregate turnover is as follows:-
'aggregate turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
The turnover made during the month of April-June is covered under the definition of aggregate turnover. Thus, turnover of pre GST regime in April to June is also taken into consideration for calculating limit of 2 crores.
There was ambiguity regarding turnover for eligibility for filing of reconciliation statement. Our interpretation was as per Section 35 read with Rule 80. However Press release dated 03-07-2019 clarified as follows:
i) Turnover for eligibility of filing of reconciliation statement: It may be noted that the aggregate turnover i.e. the turnover of all the registrations having the same Permanent Account Number is to be used for determining the requirement of filing of reconciliation statement. Therefore, if there are two registrations in two different States on the same PAN, say State A (with turnover of Rs. 1.2 Crore) and State B (with turnover of Rs. 1 Crore) they are both required to file reconciliation statements individually for their registrations since their aggregate turnover is greater than Rs. 2 Crore. The aggregate turnover for this purpose shall be reckoned for the period July, 2017 to March, 2018.
Therefore now it is advised to follow the Press Release and compute the turnover from July 17 to March 18 for calculating limit of 2 crores.Reply dt. 27-01-2020)