GSTR-9C Scrapped in Budget 2021

Budget 2021 has introduced a plethora of new provisions, many of which are in line with the long-term goals of the government. For instance, simplifying GST for the taxpayers has been one of the top priorities for the government since its introduction in 2010.In this regard, a significant proposal announced by the Union Finance Minister during her Budget 2021 speech is the omission of Section 35(5) from the GST Act. Taxpayers registered for GST, no longer need to mandatorily get their annual accounts audited and submit the reconciliation statement with the GSTR-9C form .Here are 3 things you should know about GSTR-9C and its omission-

The form is a reconciliation statement that was introduced in 2018. The form is submitted as a reconciliation between two major financial records of a company - the returns filed in GSTR-9 for the financial year and the financial reports audited by a GST auditor, CA, or CMA.But only registered taxpayers with an aggregate annual turnover of exceeding Rs. 2 crores need to file their GST with GSTR-9 and GSTR-9C forms.

During her Budget 2021 speech, the Union Finance Minister Nirmala Sitharaman announced the omission of sub-section (5) of Section 35 of the GST Act. This sub-section states that every taxpayer with an aggregate turnover exceeding Rs. 2,00,00,000 in a financial year should get their accounts audited. Form GSTR-9C was used for submitting the reconciliation statement.But as the sub-section now stands omitted, there is no need for the taxpayers to submit the GSTR audit report with the form mentioned above. With this move, the government is aiming to make GST simpler for the taxpayers.

Since its introduction in 2018, there was a lot of confusion with regard to forms GSTR-9 and GSTR-9C. While GSTR-9 is a consolidation report of all the annual GST returns, the other is a reconciliation statement.Moreover, as GSTR-9C required an audit by a CA or CMA, it also meant a lot of additional paperwork and working hours for the taxpayers that generate an annual turnover exceeding Rs. 2 crores. As Section 35(5) is now omitted, this move is expected to simplify GST further.

The government and the GST council have regularly made changes to the GST Act to make this revolutionary tax reform more convenient and simpler for the taxpayers. The scrapping of GSTR-9C in Budget 2021 is another step in the same direction.If you are a taxpayer with an annual turnover of above Rs. 2 crores, you no longer need to worry about getting your finances audited and filing GSTR-9C. You can consult your CA or tax professional to know more about this omission.Ready to make the most of your money? Start your tax planning journey now!

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