On 15.10.2020, the Hon’ble Bombay High Court heard the writ petition filed by the Confederation of GST Professionals and Industries for extension of due date of submitting GSTR 9 and 9C for 2018-19 to 31.12.2020 [WP (L) 4419 of 2020]. Dr. Ashok Saraf, Senior Advocate made a passionate plea on behalf of all tax professionals, telling the Court that Chartered Accountants and tax professionals have now become “Corona Worriers” in these drastic times, being forced to work day and night, battling against all odds to submit these two forms before the current due date of 31.10.2020. Bombay HC has noted the arguments of Dr. Saraf and observed that this is not adversarial litigation and that solution has to be worked out. Court has called for ASG to appear and tell the Court how the UOI intends to resolve these matters for benefit of all. The Goods and Service Tax Practitioners’ Association of Maharashtra ( GSTPAM) had also filed similar petition and they were represented by the Senior Advocate Shri R. V. Desai.
I am a lawyer practising solely in litigation for the past two decades at least. Perhaps I am not proper person to write about problems of tax professionals who are doing GSTR 9 and 9C filing work during coronavirus crisis. However, when even someone like me can understand that there is a grave urgency to extend the due dates for submitting the GSTR 9 and 9C by at least 3 months, and the Government purposely ignores the problems of the tax professionals, like an ostrich which has buried its head in the sand, such induced blindness of the Government requires outright condemnation from the entire tax fraternity, and not just polite representations.
Vide the Notification No.69 of 2020 – Central Tax dated 30.9.2020, the Central Government extended the due dates for extending the due date of submitting GSTR – 9 and 9C for FY 2018-19 to 31.10.2020, a paltry extension of one month. The Government will no doubt say that the deadline under the Statute was 31.12.2019 and therefore extension until 31.10.2020 is more than enough. But is this the truth?
Under Section 44 of the Central Goods and Services Tax Act, 2017 (hereinafter “CGST Act”) and Maharashtra Goods and Services Tax Act, 2017 (hereinafter “MGST Act”), an annual return has to be filed each year in the prescribed format by the 31st of December following the end of the financial year and the audit report or reconciliation statement has to be submitted along with it:
“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.
(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 of July, 2017 to the 31st of March, 2018 shall be furnished on or before 30th June, 2019. ”
Section 35(5) of the CGST and MGST Act reads as follows:
“35. Accounts and other records. –
…
(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.
…”
Rule 80 of the Central Goods and Services Tax Rules, 2017 (hereinafter “CGST Rules”) and Maharashtra Goods and Services Tax Rules, 2017 (hereinafter “MGST Rules”) prescribe the following forms:
“80. Annual return.-
(1) Every registered person [other than those referred to in the proviso to sub-section (5) of section 35, 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 Centre notified by the Commissioner:
Provided that ….
(2) ….
(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.
Provided that every registered person whose aggregate turnover during the financial year 2018-2019 exceeds five crore rupees shall get his accounts audited as specified under subsection (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C for the financial year 2018- 2019, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”
Thus, the prescribed form for this annual return is GSTR-9 and for the audit report/reconciliation statement is GSTR-9C. Though there is no specific due date for GSTR-9C per se, the same has to be submitted alongwith the annual return in GSTR-9 and thus the same deadline applies.
It will be seen that the GST Act provides for 9 months to complete the GSTR – 9 and 9C submission. The due date is 31st December following end of financial year. Parliament and the State Legislatures, in their wisdom have given this 9 months time-line, recognising that the work will take time.
Though as of now we are concerned with the due date for 2018-19, I want to highlight the chaos that GSTR 9 and 9C for 2017-18 was delayed due to until Feb 2020 due to fault of Government itself:
(i) The due date for the annual return of the year 2017-18 was thus 30.6.2019 by statute. However, the same was extended multiple times till February 2020 due to various factors:
(ii) In the 38th GST Council Meeting, the date was extended from 31.12.2019 to 31.1.2020 due to the following reasons recorded in Table Agenda 4/5 of the Minutes:
“Table Agenda (4/5)
• Notification No.56/2019 dated 14.11.2019 issued to simplify filing of Annual return (FORM GSTR-9) and Reconciliation Statement (FOR GSTR-9C) for FY 2017-18 and FY 2018-19.
• Certain changes required in the offline utility of FORM GSTR-9C.
• It has been informed that the offline utility for filing of FORM GSTR-9C not yet deployed (till 16.12.2019).
• Taxpayers are expressing concern that they will get very little time for compliance.
Proposal – Due date for filing the FORM GSTR-9 and FORM GSTR-9C may be extended from 31.12.2019 to 31.01.2020.”
The minutes record the approval of this agenda:
“Agenda Item 15: Any other agenda item with the permission of the Chairperson
…
4. Extension of due date for filing of FORM GSTR-9/9C for 2017-18
35.3. Principal Commissioner, GST Policy Wing, CBIC stated that notification No.56/2019 dated 14.11.2019 was issued to simplify filing of Annual Return (FORM GSTR-9) and Reconciliation Statement (FORM GSTR 9C) for FY 2017-18 and FY 2018-19. Certain changes were required in the offline utility for filing of FORM GSTR-9C had not been deployed yet (till 16.12.2019). Taxpayers were expressing concern that they would get very little time for compliance. Accordingly, it was proposed to extend the due date for filing the FORM GSTR-9 and FORM GSTR-9C for FY 2017-18 from 31.12.2019 to 31.1.2020.
…
37. For Agenda Item 15, the Council approved the following:
…
ii…
(a)…
(b)…
(c)…
(d) To extend the due date for filing of FORM GSTR-9/9C for FY 2017-18 ton 31.1.2020.
(e) …”
(iii) The due date for submitting the GSTR-9/9C for 2017-18 was thereafter extended in staggered manner in February, 2020, the last of which dates was 7th February 2020. However, due to technical issues on the portal and the inability of the system to cope with the load of filings, the Hon’ble High Court of Rajasthan passed an interim order injuncting the Union of India from charging any late fees till 12th February, 2020 and accepting the GSTR 9/9CX till that date [Tax Bar Association v. Union of India – 2020 (33) GSTL 615 (Raj)] When this order was appealed to the Hon’ble Supreme Court, and on the statement of the Ld. Solicitor General of India that the late fees were being reduced to Rs.200 per day, the Hon’ble Supreme Court was pleased to stay the portion of the order of the Hon’ble High Court of Rajasthan to the extent extending the date to 12th February, 2020 and the Hon’ble Apex Court specifically directed that late fees collected by the Union of India will be subject to the final outcome of the petition in the High Court of Rajasthan [Supreme Court Order dated 10.2.2020 in SLP (C) No.3839 of 2020]. A similar order criticizing the lack of adequate facilities to file the GSTR-9 and 9C for the year 2017-18 was issued by the High Court of Delhi [Sales Tax Bar Association v. Union of India – Order dated 23.1.2020 in WP (C) 10284/2018].
For the year 2018-19, the GSTR 9 and 9C due date as per the statute was 31.12.2019. However, the same was extended till 30.6.2020 in view of the fact that the Forms GSTR-9 and 9C for the year 2018-19 were not available till 29.2.2020 for filing. The following extract from the 39th GST Council meeting held on 14.3.2020 explains the reasons for the extension:
“Agenda Item 5A(vi) : Filing of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement)
(1/3)
• A lot of negative feedback was received regarding filing of annual return and reconciliation statement for FY 2017-18. Most of the feedback is on non-working of the IT portal.
….
(2/3)
….
(3/3)
…
• As the utility has not been made available till 29.2.2020 and even those taxpayers to whom the utility has been made available, many of the fields such as Table 8A are blank or not visible, the law committee recommended that the date of filing of these forms for 2018-19 may be extended to 30.6.2020.
…
Accordingly, these recommendations are placed before GST Council.”
The minutes further record:
“14. For Agenda Item 5A, the Council approved:-
…
(vi) to give relief to taxpayers having threshold of less than Rs.5 crores from filing GSTR-9C for FY 2018-19, to extend the due date for filing of annual return in FORM GSTR-9 and the reconciliation statement in FORM GSTR-9C for FY 2018-19 from 31st March, 2020 to 30th June, 2020 and that ….”
Clearly therefore the utility for filing the GSTR-9 and 9C was made available in midst of the lockdown. However, no filing of GSTR-9 or 9C could be done even before 30th June 2020 due to the reason to the lockdown.
In the State of Maharashtra, there was a complete lockdown from 15.3.2020 to 31.5.2020. The Unlock Phases began only from 1.6.2020. Here it is pertinent to note that even though the Ministry of Home Affairs guidelines by Central Government for unlocking did not contain many restrictions, these guidelines presented only broad framework and decision on exact restrictions were left to States. Accordingly, the State of Maharashtra allowed only 10% of office staff, or 10 people whichever is higher, in private offices in metro cities and many other towns to attend. Kindly note that even if the CA firm thus had 50 Chartered Accountants and 100 support staff, he could only call maximum 10 people to office. The situation at client side was worse. A corporate with 500 staff, was also subjected to same restriction. Such a corporate could not only call 10 people from accounting division. It had to apportion the 10 people facility amongst many divisions.
Till August end, these staff restrictions were there. Only from 2nd September, 2020 was the staff restriction relaxed to allow 30% of the staff strength to attend office. During the same period as the unlock phases began, entire staff was busy in complying with the following due dates:
Extensions announced during COVID Period for tax payers having aggregate turnover more than Rs. 5 Crore in preceding Financial Year. [i.e. to whom GST Audit and GSTR-9 for FY 2018-19 is applicable.] –
| Month | Normal Due Date | Extended Due Date / Due Date without Late fees | Notification No. |
| Feb 2020 | 20-03-2020 | 24-06-2020 | 32/2020-CT-03-04-2020 |
| 30-09-2020 [Max Late Fee 250] | 57/2020 -CT-30-06-2020 | ||
| Mar 2020 | 20-04-2020 | 29-06-2020 | 32/2020-CT-03-04-2020 |
| 30-09-2020 [Max Late Fee 250] | 57/2020 -CT-30-06-2020 | ||
| April 2020 | 20-05-2020 | 29-06-2020 | 32/2020-CT-03-04-2020 |
| 30-09-2020 [Max Late Fee 250] | 57/2020 -CT-30-06-2020 | ||
| May 2020 | 20-06-2020 | 27-06-2020 | 36/2020-CT-03-04-2020 |
| June 2020 | 20-07-2020 | No Extension | |
| July 2020 | 20-08-2020 | No Extension | |
| Aug 2020 | 20-09-2020 | No Extension |
Extensions announced during COVID Period for tax payers having aggregate turnover up-to 5 Crore in preceding Financial Year. [ i.e. to whom GST Audit for FY 2018-19 is not applicable but Annual Return GSTR-9 is applicable if their turnover is exceeding Rs.2 Crores.] –
| Month | Normal Due Date | Extended Due Date / Due Date without Late fees | Notification No. |
| Feb 2020 | 20-03-2020 | 29-06-2020 | 32/2020-CT-03-04-2020 |
| 30-06-2020 | 52/2020-CT-24-06-2020 | ||
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| Mar 2020 | 20-04-2020 | 29-06-2020 | 32/2020-CT-03-04-2020 |
| 03-07-2020 | 52/2020-CT-24-06-2020 | ||
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| April 2020 | 20-05-2020 | 30-06-2020 | 32/2020-CT-03-04-2020 |
| 06-07-2020 | 52/2020-CT-24-06-2020 | ||
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| May 2020 | 20-06-2020 | 12-07-2020 | 36/2020-CT-03-04-2020 |
| 12-09-2020 | 52/2020-CT-24-06-2020 | ||
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| June 2020 | 20-07-2020 | 23-09-2020 | 52/2020-CT-24-06-2020 |
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| July 2020 | 20-08-2020 | 27-09-2020 | 52/2020-CT-24-06-2020 |
| 30-09-2020 | 57/2020-CT-30-06-2020 | ||
| Aug 2020 | 20-09-2020 | 01-10-2020 | 54/2020-CT-24-06-2020 |
GSTR-1 details uploading:
| Month | Normal Due Date | Extended Due Date / Due Date without Late fees | Notification No. |
| Mar 2020 | 11-04-2020 | 30-06-2020 | 33/2020-CT-03-04-2020 |
| 10-07-2020 | 53/2020-CT-24-06-2020 | ||
| April 2020 | 11-05-2020 | 30-06-2020 | 33/2020-CT-03-04-2020 |
| 24-07-2020 | 53/2020-CT-24-06-2020 | ||
| May 2020 | 11-06-2020 | 30-06-2020 | 33/2020-CT-03-04-2020 |
| 28-07-2020 | 53/2020-CT-24-06-2020 | ||
| June 2020 | 11-07-2020 | 05-08-2020 | 53/2020-CT-24-06-2020 |
| July 2020 | 11-08-2020 | No extension | |
| Aug 2020 | 11-09-2020 | No extension |
Therefore, there has been heavy workload since June, 2020 on tax professionals to comply with all the returns and other deadlines while working at much lesser strength than normal.
Despite many associations representing to the Government, the due date for submitting GSTR-9 and 9C for 2018-19, the due date was extended only to 31.10.2020. Can it be said that sufficient time is granted in view of above-detailed chronology of events?
Now, the statute requires the Form GSTR-9 and 9C to be filed by 31st December from the end of the financial year, that is within 9 months from the end of the financial year to which the forms relate. The GSTR- 9 and 9C facility for the year 2018-19 was not made available at least till 29.2.2020 according to the admission of the GST Council itself. Counting from that date, the 9 months period for filing GSTR-9 and 9C should ordinarily end on 30.11.2020. The periods of March, 2020 to May, 2020 are liable to be further completely excluded, on the basis of principles of the limitation act, since there was a total lockdown during which compliance with the statute was impossible. Thus, another 3 months are liable to be added after 30.11.2020 in order to cover this exclusion of lockdown period and the deadline for submitting GSTR-9 and 9C therefore cannot be over before end of February, 2021.
Furthermore, even today, there are heavy restrictions on public transport and on staff strength which can attend office. Businesses in India do not operate in a totally paperless online environment and the enormous data which is required for completing audit and compilation of the annual return cannot be scanned and sent to the tax professional’s offices. Firstly, the volume of data and technical restrictions in the offices of taxpayers cannot support scanning and uploading such huge amounts of data. Secondly, there are issues of confidentiality which hamper the amount of data which can be shared over the internet.
The staff of the tax professionals have to work from home and they do not have adequate technical resources and tools to carry out the work of auditing and compiling the GSTR-9 and 9C data. Mere internet connection and availability of laptops will not suffice. The complex accounting and auditing software required for the job cannot be sent to each and every employee’s house. All tax professionals are subject to rigorous penalties if the audit is not properly carried out. Chartered Accountants can loose their certificate of practice if due diligence is not followed. Thus, physical presence in office is required and the entire work cannot be carried out from home.
Undue haste in completing the compilation of GSTR-9 and 9C will in fact hurt the Government itself in as much wrong data sent to the Government will result in revenue shortfall. It is submitted that the Forms GSTR-9 and 9C are used by the Government to ensure that a private audit can point out defaults and discrepancies to the taxpayers resulting in increased voluntary compliance. However, if the audit itself is not completed properly, the Government’s own interest will be harmed. On the other hand, extension of time till 31.12.2020 will not lead to any revenue loss at all.
The Government has extended the due date for completing scrutiny and assessment etc. under the Central Excise Act, Customs Act and the Finance Act, 1994 till 31.12.2020 [See Section 6 of the Taxation and Other Laws (Relaxation and amendment of Certain Provisions) Act, 2020 and the notification issued thereunder]. There is qualitatively no difference between a scrutiny or an assessment and an audit. All aspects have to be verified by the Chartered Accountant or the Cost and Management Accountant and various discrepancies have to be pointed out in order to ensure that revenue is not lost to the Government. As such, it is discriminatory on part of the Government to give themselves time upto 31.12.2020, whereas the Chartered Accountants and Cost and Management Accountants are given time only till 31.10.2020.
Such extremely short time period is also directly in teeth of the statute as well as Article 21 of the Constitution of India. Firstly, as aforesaid, time will not run out at all till 30.11.2020 since the 9 months of period has to be counted from when the GSTR 9 and 9C are made available for FY 2018-19. Furthermore, time has to be excluded for the lockdown period on the basis of the normal principles of the limitation act. However, apart from this, there is clear violation of Article 21 in as much the health of Chartered Accountants, Cost and Management Accountants, their staff as well as taxpayers and their staff is being put at significant risk.
The panic which is being created by giving such a short extension till 31.10.2020 will result in staff having to attend office in violation of lockdown guidelines as well as they being made to travel in public transport for long hours to attend office everyday. Tax professionals will have to run from pillar to post to arrange for paper records to be brought into their office. The short time-line will result in compromises being made in sanitization and other guidelines in the race to finish the work of GSTR 9 and 9C before 31.10.2020. Furthermore, staff belonging to age-group of 50 and above, cannot be deputed at audit places due to risk of COVID infection. Scarcity of resources has also affected the work to a large extent.
We hope the wise counsel will prevail and proper decision will be taken before the next date of hearing in the Court.
JAI HIND!