Annual Return GSTR-9 and GSTR-9C for Pvt Ltd: who must file, what's reconciled, and the ₹5Cr turnover line

GSTR-9 (annual return) is mandatory for every registered person with aggregate turnover above ₹2 crore, and GSTR-9C (reconciliation statement) is mandatory above ₹5 crore, both due by 31 December following the financial year. A ₹8 crore company that files neither faces a ₹50-per-day late fee plus a departmental reconciliation it would rather conduct itself. GSTR-9C reconciles your GSTR-9 turnover against your audited financials — and the differences it exposes are where demand notices start.

What the law actually requires

GSTR-9 is filed under s.44 CGST Act 2017 read with Rule 80(2). It consolidates the year's outward supplies, inward supplies, ITC availed/reversed, and tax paid — a running total of the 12 GSTR-1s and GSTR-3Bs.

GSTR-9C is filed under Rule 80(3) as the "reconciliation statement" where annual turnover exceeds ₹5 crore. It reconciles two independent records: turnover and ITC as declared in GSTR-9 against turnover and ITC as per the audited annual financial statements, with a reconciliation of the differences.

Turnover ≤ ₹2 crore can skip GSTR-9 entirely — the return is deemed filed by notification, and GSTR-9C does not apply. The ₹2 crore–₹5 crore band files GSTR-9 only. Above ₹5 crore, both.

What GSTR-9C actually reconciles. Part I reconciles the turnover declared in GSTR-9 against turnover in the audited P&L; Part II reconciles ITC availed in GSTR-9 against the ITC in the books, and carries the audit certificate. The classical differences it surfaces: export turnover declared at the invoice rate in GSTR-1 but at the realised rate in the P&L; RCM not booked; exempt/non-GST turnover classified wrongly; ITC reversed for s.17(5) items only in the annual form and not monthly.

What GSTR-9C is not. Since the Finance Act 2021 omitted s.35(5), the old "GST audit" by a CA/CMA exists no more. GSTR-9C is a self-certified reconciliation, not a departmental audit. A departmental audit under s.65 is a different proceeding conducted by the tax authority. The practical consequence: no CA certificate is statutorily required, but a CA-prepared GSTR-9C is the norm because the differences it discloses are exactly what an assessing officer reads first.

What changed FY 2025-26

• No relaxation for FY 2025-26. For earlier years the government made GSTR-9 optional (deemed filed) below ₹2 crore; the position for FY 2025-26 is unchanged — mandatory above ₹2 crore, optional below.
• GSTR-9C remains at the ₹5 crore line. The Finance Act 2021 cut the old ₹2 crore GST-audit threshold to nil; what survived is the ₹5 crore reconciliation. That line has not moved in FY 2025-26.
• The 31 December 2026 due date is the live date. For FY 2025-26, both forms are due 31 December 2026. Unlike income-tax, there is no annual extension ritual — treat it as fixed.
• Enforcement leans on the reconciliation. With GSTR-2B auto-populating ineligible credit, the ITC table of GSTR-9C is where wrongly-claimed credit surfaces first. A company whose monthly 3B claimed 5% provisional credit all year but whose GSTR-9C shows no Rule 36(4) reconciliation has an unexplained gap.

Worked example: TechCore Pvt Ltd

TechCore Pvt Ltd has aggregate turnover of ₹8,00,00,000 in FY 2025-26 — above the ₹5 crore line, so both GSTR-9 and GSTR-9C are due by 31 December 2026.

The reconciliation throws up two differences:

The ₹6,00,000 gap is a forex adjustment: GSTR-1 reported export invoices at the invoice-date rate, while the P&L booked the realised rate on receipt. Not a tax error — but if the GSTR-9C is filed without the note explaining the difference, the assessing officer sees a ₹6,00,000 "suppressed" turnover. The reconciliation note, certified in Part II, is what converts an apparent mismatch into a documented non-issue.

A second trap: TechCore reversed ₹9,00,000 of s.17(5) blocked credit in GSTR-9C Table 4(B) but never reversed it monthly in GSTR-3B. The annual ITC claim therefore overstated the year's credit by ₹9,00,000 until the annual reversal — which the GSTR-9C discloses, and which would attract 18% interest under s.50(3) if it had been utilised. Monthly reversal in Table 4(B)(1) is the cleaner position.

Step-by-step before 31 December 2026

• Check the threshold. Aggregate turnover for FY 2025-26: below ₹2 crore → nothing to file; ₹2–5 crore → GSTR-9; above ₹5 crore → GSTR-9 + GSTR-9C.
• Reconcile GSTR-1 vs GSTR-3B first. The annual form inherits every monthly mismatch. Differences between the two are the most common GSTR-9 rejection reason.
• Pull the audited financials. GSTR-9C reconciles against the audited P&L, so the statutory audit must be complete before the reconciliation is drafted.
• List every difference with a reason code — forex, RCM, exempt supplies, prior-period adjustments — before touching the form. The note in the reconciliation statement is your evidence.
• Verify ITC reversal completeness. s.17(5) blocked credit, the 180-day unpaid-supplier reversal, and Rule 42 apportionment must all be reflected.
• File both by 31 December 2026. A late fee of ₹50/day (₹25+₹25) applies to each form, capped at ₹10,000 each, and an unfiled GSTR-9C blocks nothing at the portal but is the first query in any scrutiny.

FAQ

Our turnover is ₹1.8 crore. Do we file GSTR-9?
No — GSTR-9 is mandatory only above ₹2 crore aggregate turnover. Below that the annual return is deemed filed, and GSTR-9C does not apply at any turnover below ₹5 crore. Confirm your aggregate turnover includes exempt and zero-rated supplies under s.2(6) before relying on this.

Is a CA certificate still required in GSTR-9C?
The Finance Act 2021 removed the statutory GST audit under s.35(5), and the reconciliation statement is self-certified. The form retains a certification block, but it no longer requires a CA/CMA signature. In practice the reconciliation is drafted by the company's tax advisor because the differences it discloses require professional explanation.

What is the penalty for filing GSTR-9 late?
Under s.47, ₹50 per day (₹25 CGST + ₹25 SGST) from the due date, capped at ₹10,000 for the annual return. There is no interest on the tax itself because the tax was already paid monthly — the exposure is the fee plus the scrutiny an unexplained late annual return invites.

Our GSTR-9 turnover is ₹6,00,000 higher than the P&L because of a forex rate difference. Is that a problem?
Only if unexplained. Export services are reported in GSTR-1 at the invoice-date rate and in the P&L at the realised rate; the difference is reconcilable. Record the reason in the GSTR-9C reconciliation note so the officer sees a documented timing difference, not suppressed turnover.

For help preparing your FY 2025-26 GSTR-9 and GSTR-9C, visit pvtltd.co.

Sources

• s.44 CGST Act 2017 (annual return); s.65 CGST Act 2017 (departmental audit)
• CGST Rule 80(2) and 80(3) (GSTR-9, GSTR-9C)
• Finance Act 2021 (omission of s.35(5) GST audit)
• s.47 CGST Act 2017 (late fee); s.50(3) CGST Act 2017 (interest on excess ITC)
• s.2(6) CGST Act 2017 (aggregate turnover)

Need help with this?

Our team handles the paperwork. You focus on your business.