Published 11 October 2026
Twelve GSTR-1s and twelve GSTR-3Bs a year might seem to tell the department everything. They do not. Each was filed within weeks of its month’s end, before the books were closed, the auditor had finished, or the year’s credit notes had been issued. The annual return brings them together, and the reconciliation statement holds them up against the audited accounts. Between them, they are the point at which a year’s GST is either confirmed or found wanting.
They matter for a second reason that is less often noticed. The due date of the annual return is the date from which the department’s time limit for raising demands runs. The guide on notices returns to this. It is enough here to know that the annual return is where the clock starts.
This guide covers section 44 of the CGST Act and rule 80 of the CGST Rules.
Who files
Section 44(1) requires an annual return from every registered person. It excludes Input Service Distributors, persons deducting or collecting tax at source under sections 51 and 52, casual taxable persons and non-resident taxable persons. A second proviso excludes Government departments and local authorities whose accounts are audited by the Comptroller and Auditor-General or a statutory auditor of local authorities.
The first proviso allows the Commissioner to “exempt any class of registered persons from filing annual return”. That power has been used for smaller taxpayers. Each year from 2020-21 to 2023-24, a notification exempted registered persons with aggregate turnover of up to two crore rupees for that year alone. Notification No. 15/2025-Central Tax replaced that annual cycle with a standing exemption. “For the financial year 2024-25 onwards”, it exempts a registered person “whose aggregate turnover in any financial year is up to two crore rupees” from the annual return for that year. For 2017-18 to 2019-20, filing was made optional for the same class by Notification No. 47/2019-Central Tax, as amended.
The forms and the date
Rule 80 prescribes the forms:
- FORM GSTR-9 is the annual return for regular taxpayers.
- FORM GSTR-9A was the annual return for composition taxpayers. The portal shows it as not applicable from 2019-20; composition taxpayers now file their annual return in FORM GSTR-4 under section 39(2) and rule 62, as Composition Returns: CMP-08 and GSTR-4 explains.
- FORM GSTR-9B is named for e-commerce operators collecting tax at source, but no such form has been prescribed.
- FORM GSTR-9C is the reconciliation statement.
GSTR-9 is due “on or before the thirty-first day of December following the end of such financial year”. The return for 2025-26 is therefore due by 31 December 2026.
The reconciliation statement
Section 44(1) says the annual return “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”.
Rule 80(3) makes GSTR-9C compulsory where “aggregate turnover during a financial year exceeds five crore rupees”, filed with GSTR-9 by the same date.
The statement is self-certified. Until 31 July 2021, the Act required persons above a turnover limit to have their accounts audited under section 35(5), and to file a reconciliation certified by the auditor. The Finance Act, 2021 replaced that requirement from 1 August 2021. The taxpayer now certifies the reconciliation itself.
What is being reconciled
The reconciliation compares two measures of one year’s supplies: the turnover declared in the GST returns, and the turnover in the audited financial statements. They are rarely equal, for reasons that are usually legitimate. Typical sources of difference are:
- revenue recognised in the accounts in a different year from its time of supply under GST, such as unbilled revenue or advances
- credit notes issued after the year end, or not carried through the returns
- supplies under Schedule I, such as transfers between distinct persons, that are taxable under GST but are not revenue in the accounts
- income in the accounts that is not a supply under GST, or is a Schedule III activity
The purpose is not to make the two figures match. It is to explain every difference. An unexplained difference in which GST turnover is lower than book turnover is, on its face, tax not paid. It is the first thing a department examining the return will look for.
The same exercise applies to credit. The credit taken in the year’s GSTR-3B returns is compared with what the suppliers’ filings show and with what the books record.
What the annual return cannot do
GSTR-9 summarises the year. It is not a way to reopen it, and three limits follow from other sections.
It is not a route to new credit. Credit is taken in GSTR-3B, under section 16. Section 16(4) bars credit after “the thirtieth day of November following the end of financial year … or furnishing of the relevant annual return, whichever is earlier”. Credit missed in the year cannot be added through GSTR-9.
It closes the correction window. Sections 37(3) and 39(9), covered in the GSTR-1 and GSTR-3B guide, allow errors to be corrected only until 30 November after the year, “or furnishing of the relevant annual return, whichever is earlier”. The same limit applies to credit notes under section 34(2). Filing the annual return early closes all of these windows early.
Additional tax is paid separately. Where the reconciliation shows tax short paid, the annual return records it, but the tax and interest are paid through FORM GST DRC-03. Interest, as the previous guide explained, can only ever be paid in cash.
The practical sequence follows. Reconcile before 30 November, correct what can still be corrected in that period’s returns, and only then file the annual return.
Late filing
Section 47(2) imposes a late fee for an annual return not filed by the due date. It is “one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the State or Union territory”. That is the statutory ceiling under the CGST Act.
For returns from 2022-23 onwards, Notification No. 07/2023-Central Tax waives the late fee above lower amounts, set by turnover:
| Aggregate turnover in the year | Late fee (central tax) |
|---|---|
| Up to five crore rupees | Rs 25 a day, up to 0.02 per cent of turnover in the State |
| Above five crore, up to twenty crore rupees | Rs 50 a day, up to 0.02 per cent of turnover in the State |
| Above twenty crore rupees | No waiver; section 47(2) applies in full |
The figures in the notification are for central tax only.
From 1 October 2023, section 44(2) also bars an annual return filed “after the expiry of a period of three years from the due date”. The Government may relax this by notification.
Why the due date matters beyond the return
The time limits for demands are measured from the due date of the annual return. They are not measured from the date it was actually filed.
| Provision | Applies to | Time limit |
|---|---|---|
| Section 73(10) | Periods up to 2023-24, no fraud | Order within three years of the annual return’s due date |
| Section 74(10) | Periods up to 2023-24, fraud or suppression | Order within five years of that date |
| Section 74A(2) | 2024-25 onwards, any case | Notice within forty-two months of that date |
For 2024-25, whose annual return is due on 31 December 2025, a notice under section 74A can be issued until 30 June 2029. Filing the annual return early does not shorten that period. Filing it late, or not at all, does not extend it.
Preparing the annual return
The order of work is:
- Close the books and obtain the audited financial statements.
- Reconcile turnover in the GST returns with turnover in the accounts, and credit in GSTR-3B with GSTR-2B and the books. Identify and explain every difference.
- Before 30 November, correct errors through the returns for the current period, issue any credit notes, and take any credit still available under section 16(4).
- Pay any additional tax found, with interest, through FORM GST DRC-03.
- File GSTR-9, and GSTR-9C if aggregate turnover exceeds five crore rupees, by 31 December.
- Keep the reconciliation working papers. They are the first thing asked for if the year is examined.
The next guide covers what happens when the department does examine the year: the intimation in DRC-01A, the show cause notice in DRC-01, and the demand provisions in sections 73, 74 and 74A.