Section 44 of the Central Goods and Services Tax Act, 2017 deals with the annual return under GST. It provides the statutory foundation for annual reporting of GST-related information for a financial year and works together with Rule 80 of the CGST Rules, 2017, which prescribes the relevant forms and filing procedure.
The annual return is intended to provide a consolidated view of the transactions and tax-related information reported by a registered person during the financial year. It brings together information relating to outward supplies, inward supplies, input tax credit, tax paid and other particulars reported during the year.
The current Section 44 is significantly different from the provision originally enacted in 2017. In particular, the mandatory GST audit requirement under Section 35(5) was removed, Section 44 was substituted with effect from 1 August 2021, and a self-certified reconciliation statement was introduced within the annual-return framework.
Further, Section 44 was amended in 2023 to introduce a restriction on furnishing an annual return after three years from its due date, subject to a power of the Government to permit filing in specified cases.
For current compliance, taxpayers must also consider the exemptions and procedural requirements notified under Section 44 and Rule 80. For example, taxpayers having aggregate turnover up to ₹2 crore are exempt from filing GSTR-9 for FY 2024-25 onwards under Notification No. 15/2025-Central Tax.
What Is Section 44 of the CGST Act?
Section 44 is titled:
“Annual return.”
The current provision requires specified registered persons to furnish an annual return electronically in the prescribed form and manner.
The section generally applies to registered persons, but specifically excludes certain categories, including:
- Input Service Distributors;
- persons paying tax under Section 51;
- persons paying tax under Section 52;
- casual taxable persons; and
- non-resident taxable persons.
Section 44 also contains an exemption mechanism through which the Commissioner, on the recommendations of the GST Council, may notify classes of registered persons that are not required to furnish an annual return.
There is also a separate exemption for certain Government departments and local authorities whose books are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed under the applicable law.
Purpose of the GST Annual Return
The annual return serves a different purpose from monthly or quarterly GST returns.
Periodic returns such as GSTR-3B are used for reporting and paying tax during the year.
The annual return provides a yearly consolidated picture of the taxpayer’s GST activities.
It helps bring together information such as:
- outward taxable supplies;
- exempt and nil-rated supplies;
- zero-rated supplies;
- inward supplies;
- reverse-charge supplies;
- input tax credit availed;
- ITC reversed or considered ineligible;
- tax payable;
- tax paid;
- amendments and adjustments; and
- other prescribed information.
The annual return therefore acts as an important year-end compliance and reconciliation exercise.
Who Is Required to File an Annual Return?
The basic rule under Section 44 is that a registered person is required to furnish an annual return unless the person falls within an excluded category or has been specifically exempted by notification.
The statutory exclusions include:
1. Input Service Distributor
An Input Service Distributor is excluded from the annual-return requirement under Section 44.
ISD compliance is governed by its specific return mechanism.
2. Persons Paying Tax Under Section 51
Persons required to deduct tax at source under Section 51 are excluded from the Section 44 annual-return requirement.
Their TDS compliance is governed by the relevant provisions and prescribed returns.
3. Persons Paying Tax Under Section 52
Electronic commerce operators required to collect tax at source under Section 52 are also excluded from the annual return under Section 44.
They have a separate statement mechanism under the GST framework.
4. Casual Taxable Persons
A casual taxable person is excluded from Section 44.
5. Non-Resident Taxable Persons
A non-resident taxable person is also excluded.
These exclusions are important because taxpayers should not assume that every GST registration automatically results in a GSTR-9 filing obligation.
Exemption for Small Taxpayers
Although Section 44 establishes the general requirement to furnish an annual return, it also gives the Commissioner power, on the recommendation of the GST Council, to exempt specified classes of registered persons.
This power has been used to provide exemptions for smaller taxpayers for specified financial years.
For FY 2024-25 and onwards, Notification No. 15/2025-Central Tax exempts registered persons having aggregate turnover up to ₹2 crore in the financial year from filing the annual return in FORM GSTR-9.
This is an important current provision.
Therefore, it would be incorrect to state that every registered taxpayer must necessarily file GSTR-9 every year without considering the applicable exemption notification.
Annual Return and Aggregate Turnover
Aggregate turnover is important for determining certain annual-return requirements.
It is particularly relevant for determining whether a taxpayer must furnish FORM GSTR-9C, the reconciliation statement.
For this purpose, taxpayers should determine aggregate turnover according to the definition and rules under GST rather than simply considering the turnover of one GSTIN in isolation.
The annual-return framework therefore requires taxpayers to examine their GST registrations, supplies and aggregate turnover carefully before determining which forms are applicable.
What Is FORM GSTR-9?
FORM GSTR-9 is the principal annual return for taxpayers to whom the form is applicable.
It consolidates information for the relevant financial year.
The information reported in GSTR-9 broadly covers several major areas.
Basic Details
The annual return contains basic identification information such as:
- financial year;
- GSTIN;
- legal name; and
- trade name, where applicable.
Outward and Inward Supplies
The return captures information relating to supplies made and received during the financial year.
This can include:
- B2B supplies;
- supplies to unregistered persons;
- exports;
- supplies to SEZs;
- deemed exports;
- advances;
- reverse-charge inward supplies;
- exempt supplies;
- nil-rated supplies;
- non-GST supplies;
- credit notes; and
- debit notes.
Input Tax Credit
The annual return also contains information relating to:
- ITC availed;
- ITC reversed;
- ineligible ITC; and
- other ITC-related information.
The GST Council has also considered changes to GSTR-9 so that certain ITC information is aligned with GSTR-2B rather than GSTR-2A, reflecting the current ITC reporting framework.
Tax Paid
The annual return contains details of tax paid during the financial year.
This allows the taxpayer to compare the tax liability arising from reported transactions with the tax actually paid through the GST system.
Is GSTR-9 a Replacement for GSTR-3B?
No.
GSTR-9 does not replace GSTR-3B.
The two forms have different purposes.
| Particular | GSTR-3B | GSTR-9 |
|---|---|---|
| Nature | Periodic return | Annual return |
| Frequency | Monthly or quarterly, as applicable | Once for the financial year |
| Main purpose | Report periodic liability and ITC and pay tax | Consolidate annual GST information |
| Tax payment | Regular tax payment mechanism | Year-end reporting/reconciliation |
| Period covered | Particular tax period | Entire financial year |
A taxpayer should therefore complete the applicable periodic returns before preparing the annual return.
Due Date for Annual Return
Rule 80 provides that the annual return is generally required to be furnished electronically on or before 31 December following the end of the financial year.
For example:
- FY 2024-25 → normal due date: 31 December 2025
- FY 2025-26 → normal due date: 31 December 2026
However, the Government or competent authority may provide extensions or special relaxations for particular taxpayers, locations or financial years.
Therefore, the statutory due date should always be checked together with any applicable extension notification.
FORM GSTR-9C – Reconciliation Statement
One of the most important aspects of Section 44 is the relationship between the annual return and FORM GSTR-9C.
Before 1 August 2021, GST law contained a mandatory audit requirement under Section 35(5) for specified taxpayers and Section 44 required submission of audited annual accounts and a reconciliation statement.
The Finance Act, 2021 removed the mandatory GST audit requirement under Section 35(5) and substituted Section 44. The current framework provides for an annual return which may include a self-certified reconciliation statement.
Under Rule 80(3), a registered person whose aggregate turnover during a financial year exceeds ₹5 crore is required to furnish a self-certified reconciliation statement in FORM GSTR-9C along with the annual return.
Thus, the current framework is different from the earlier requirement of a reconciliation statement certified by a Chartered Accountant or Cost Accountant.
Is GSTR-9C Still an Audited Statement?
No, not in the old sense.
The earlier law required specified taxpayers to get their accounts audited under Section 35(5) and submit a certified reconciliation statement.
That mandatory GST audit requirement was removed from 1 August 2021.
The current Rule 80 framework requires a self-certified GSTR-9C for registered persons whose aggregate turnover exceeds ₹5 crore, subject to the applicable exclusions and rules.
Therefore, it is incorrect to describe current GSTR-9C as a statutory GST audit report requiring mandatory certification by a CA or CMA.
What Is Reconciled in GSTR-9C?
The purpose of GSTR-9C is to reconcile the value of supplies reported in the GST annual return with the corresponding figures in the audited annual financial statements.
The reconciliation may involve differences arising from matters such as:
- accounting treatment;
- GST treatment;
- advances;
- credit notes;
- debit notes;
- exports;
- exempt supplies;
- non-GST supplies;
- timing differences;
- turnover adjustments; and
- other reconciliation items.
The objective is to explain why the figures in the GST return may differ from the corresponding financial-statement figures.
GSTR-9 and GSTR-9C Are Not the Same
The two forms should not be confused.
GSTR-9
GSTR-9 is the annual return.
GSTR-9C
GSTR-9C is the reconciliation statement required for specified taxpayers based on the applicable turnover threshold.
A taxpayer required to furnish GSTR-9C must consider both forms as part of the annual-return compliance framework.
CBIC Circular No. 246/03/2025-GST specifically clarified the relationship between GSTR-9 and GSTR-9C for late-fee purposes. Where GSTR-9C is required, the annual return is not treated as complete merely because GSTR-9 has been filed; the required reconciliation statement also forms part of the annual-return filing requirement.
Composition Taxpayers and Annual Return
Composition taxpayers require special attention because their annual compliance form is different from the regular GSTR-9 framework.
The GST rules provide for annual reporting through FORM GSTR-4 for persons paying tax under the composition scheme.
For FY 2024-25 onwards, the due date for furnishing FORM GSTR-4 was extended from 30 April to 30 June following the end of the financial year. This change was implemented through amendments to Rule 62 and the instructions to FORM GSTR-4.
Therefore, a composition taxpayer should not simply assume that the regular GSTR-9 procedure applies in the same manner as it does to a normal taxpayer.
Government Departments and Local Authorities
The second proviso to Section 44 provides an important exemption.
The section does not apply to certain departments of the Central Government or State Government and local authorities whose books of account are subject to audit by:
- the Comptroller and Auditor-General of India; or
- an auditor appointed for auditing the accounts of local authorities under the applicable law.
This exemption is specifically incorporated into the statutory framework.
Annual Return Is a Consolidation of GST Data
A useful way to understand GSTR-9 is to consider it a year-end consolidation exercise.
During the financial year, a taxpayer may file:
- GSTR-1;
- GSTR-1A, where applicable;
- GSTR-3B; and
- other applicable statements or returns.
At the end of the year, the annual return brings together the relevant information for the entire financial year.
The taxpayer should therefore compare the annual return with:
- books of account;
- sales register;
- purchase register;
- GSTR-1;
- GSTR-3B;
- GSTR-2B;
- electronic credit ledger;
- electronic liability ledger;
- tax payment records;
- credit notes;
- debit notes; and
- other relevant GST records.
This reconciliation helps identify differences before the annual return is filed.
Can Additional Tax Liability Be Reported in GSTR-9?
The annual return can reveal differences between the liability already reported during the year and the liability that should have been reported.
For example, a taxpayer may discover that:
- an outward supply was omitted;
- taxable turnover was understated;
- a credit note was incorrectly reported;
- a reverse-charge liability was missed; or
- another tax liability was not properly discharged.
Where additional liability is identified, the applicable prescribed mechanism can be used to discharge it.
The annual-return framework has historically provided for payment of additional liability through FORM GST DRC-03, subject to the applicable instructions and rules.
A taxpayer should not assume that simply reporting a difference in GSTR-9 automatically settles the liability. The applicable tax, interest and payment procedure must be followed.
Can Input Tax Credit Be Claimed Through GSTR-9?
GSTR-9 is an annual return and should not be treated as a general mechanism for claiming fresh input tax credit.
The GST Council’s official annual-return guidance states that additional liability may be declared through the annual return, but input tax credit cannot be claimed through the annual return.
This distinction is important.
The taxpayer should claim eligible ITC through the applicable return and within the statutory time limits.
GSTR-9 is primarily a consolidation and reconciliation mechanism.
Annual Return and Input Tax Credit Reconciliation
ITC reconciliation is one of the most important parts of annual GST compliance.
A taxpayer may compare:
ITC as per books
with
ITC reported in GSTR-3B
and
ITC reflected in GSTR-2B
and
ITC reported in GSTR-9.
Differences may arise because of:
- timing differences;
- invoices recorded in different financial years;
- credit notes;
- amendments;
- reverse-charge transactions;
- blocked credit;
- ITC reversals;
- re-availment;
- supplier filing differences; or
- other adjustments.
The annual return should reflect the taxpayer’s position after considering the applicable GST law and prescribed reporting instructions.
Annual Return and Financial Statements
Section 44 expressly refers to reconciliation between the value of supplies declared in the GST return and the audited annual financial statement.
This makes the relationship between GST records and financial accounts particularly important.
For example, the turnover appearing in the financial statements may not always exactly equal the taxable turnover reported in GST returns because financial statements can include:
- exempt supplies;
- non-GST activities;
- GST-related adjustments;
- accounting entries;
- advances;
- other income; and
- transactions treated differently under GST.
The purpose of reconciliation is therefore not necessarily to make every figure identical but to identify and explain legitimate differences.
What Happens If an Annual Return Is Not Filed?
Failure to furnish an annual return can have several consequences.
Notice to Defaulters
Section 46 provides for issuance of a notice where a registered person fails to furnish a return required under Section 44, requiring the person to furnish the return within the prescribed period.
Late Fee
Section 47(2) provides a late fee for failure to furnish the annual return by the due date.
The statutory provision specifies ₹100 per day of continuing delay, subject to a maximum calculated at 0.25% of turnover in the State or Union territory.
However, the Government has used the power under Section 128 to rationalise the actual late fee for specified classes of taxpayers.
For FY 2022-23 onwards, Notification No. 07/2023-Central Tax provides, for specified taxpayers:
- aggregate turnover up to ₹5 crore: ₹25 per day, subject to a maximum of 0.02% of turnover in the State or Union territory;
- aggregate turnover above ₹5 crore and up to ₹20 crore: ₹50 per day, subject to a maximum of 0.02% of turnover in the State or Union territory.
The notification does not provide the same rationalised slab for taxpayers above ₹20 crore, so the statutory provision and any subsequent applicable notification must be considered.
Therefore, late-fee calculations should be made according to the notification applicable to the relevant financial year and taxpayer category rather than relying on a single historical rate.
Late Filing of GSTR-9C
Where GSTR-9C is mandatory, filing only GSTR-9 does not necessarily complete the annual-return requirement.
CBIC Circular No. 246/03/2025-GST explains that where GSTR-9C is required, the annual return under Section 44 consists of GSTR-9 together with the required reconciliation statement. Consequently, late-fee consequences can continue until the required annual-return components have been furnished.
This clarification is particularly important for taxpayers whose aggregate turnover exceeds ₹5 crore.
Three-Year Restriction on Filing Annual Return
A significant change was made to Section 44 in 2023.
Finance Act, 2023 inserted Section 44(2) with effect from 1 October 2023.
Under the current provision, a registered person is generally not allowed to furnish an annual return for a financial year after three years from the due date for furnishing that annual return.
However, the Government may, on the recommendations of the GST Council and subject to specified conditions and restrictions, permit a registered person or class of registered persons to furnish an annual return even after the three-year period.
This means that the three-year period should not be interpreted as an absolute prohibition in every possible circumstance, because the statute itself permits the Government to create exceptions through notification.
Example of the Three-Year Rule
Suppose the normal due date for an annual return is:
31 December 2026
The general statutory restriction under Section 44(2) means that the annual return cannot ordinarily be furnished after the expiry of three years from that due date.
The taxpayer should therefore not assume that an old annual return can always be filed indefinitely.
Any special notification allowing filing beyond the three-year period must be considered where applicable.
Annual Return and Assessment Proceedings
The annual return is important not only for compliance but also because the due date for filing the annual return has historically been relevant for certain GST limitation periods.
For example, under the demand provisions applicable to earlier financial years, statutory time limits for issuance of orders have been linked to the due date for furnishing the annual return.
The GST Council’s official material discussing Sections 73 and 74 explains this relationship.
However, taxpayers should carefully identify the financial year and the demand provision applicable to that period because the GST demand framework has changed, including the introduction of Section 74A for specified periods.
Annual Return for FY 2024-25
The annual-return framework has continued to evolve.
For FY 2024-25 onwards, taxpayers should pay attention to the latest notified forms and instructions rather than relying on older GSTR-9 formats.
The GST Council’s 2025 newsletter notes that FORM GSTR-9 was updated for FY 2024-25 onwards, while FORM GSTR-9C was also amended to capture additional disclosures relating to e-commerce supplies covered by Section 9(5).
The same 2025 changes also provided the exemption from GSTR-9 filing for taxpayers having aggregate turnover up to ₹2 crore for FY 2024-25 onwards.
Practical Process for Filing GSTR-9
A taxpayer can follow a structured process when preparing the annual return.
Step 1: Identify the Financial Year
First identify the financial year for which the annual return is being prepared.
Step 2: Check Applicability
Determine whether the taxpayer is:
- required to file GSTR-9;
- exempt from GSTR-9;
- required to furnish GSTR-9C; or
- covered by another annual-return mechanism.
Step 3: Complete Periodic Returns
Ensure that all applicable periodic returns for the relevant financial year have been filed.
Step 4: Reconcile Turnover
Compare:
- books;
- GSTR-1;
- GSTR-3B; and
- other GST records.
Identify differences and determine the reason for each difference.
Step 5: Reconcile ITC
Compare:
- purchase records;
- ITC ledger;
- GSTR-2B;
- GSTR-3B; and
- annual-return data.
Identify reversals, blocked credits, timing differences and other discrepancies.
Step 6: Reconcile Tax Paid
Compare tax liability with tax actually discharged through:
- cash ledger;
- credit ledger;
- reverse-charge payments; and
- other applicable mechanisms.
Step 7: Prepare GSTR-9C, If Applicable
If aggregate turnover exceeds the prescribed ₹5 crore threshold, prepare the self-certified reconciliation statement in GSTR-9C.
Step 8: Review the Annual Return
Review all tables carefully before filing.
Step 9: Discharge Additional Liability
If the reconciliation identifies additional tax liability, pay the applicable tax and interest through the prescribed mechanism.
Step 10: File Within the Due Date
File the annual return by the applicable due date, generally 31 December following the end of the financial year.
Common Mistakes While Filing Annual Return
Mistake 1: Assuming Every GST Registered Person Must File GSTR-9
This ignores statutory exclusions and annual-return exemptions.
For FY 2024-25 onwards, registered persons with aggregate turnover up to ₹2 crore are exempt from filing GSTR-9 under Notification No. 15/2025-Central Tax.
Mistake 2: Treating GSTR-9C as a CA Audit Report
The current GSTR-9C is a self-certified reconciliation statement for taxpayers crossing the prescribed turnover threshold.
The mandatory GST audit under Section 35(5) was removed from 1 August 2021.
Mistake 3: Claiming Fresh ITC Through GSTR-9
The annual return should not be used as a mechanism for claiming fresh ITC. The official GST annual-return guidance specifically states that ITC cannot be claimed through GSTR-9.
Mistake 4: Ignoring GSTR-2B During ITC Reconciliation
Current ITC reconciliation should take the applicable GSTR-2B information into account.
Mistake 5: Filing GSTR-9 Without Checking Books
The annual return should be reconciled with books and financial statements, particularly where GSTR-9C is applicable.
Mistake 6: Assuming GSTR-9C Is Optional for All Taxpayers
A registered person whose aggregate turnover exceeds ₹5 crore and who is otherwise required to furnish GSTR-9 is required to furnish the self-certified GSTR-9C under Rule 80(3), subject to the applicable exclusions.
Mistake 7: Ignoring the Three-Year Filing Restriction
Section 44(2) now generally restricts furnishing an annual return after three years from its due date, subject to Government permission in specified cases.
Section 44 Before and After 1 August 2021
The following comparison explains the major change in the annual-return framework.
| Particular | Earlier Framework | Current Framework |
|---|---|---|
| Section 44 | Annual return plus audited accounts/reconciliation for specified taxpayers | Annual return which may include self-certified reconciliation statement |
| GST audit under Section 35(5) | Applicable for specified taxpayers | Removed |
| GSTR-9C | Certified reconciliation statement | Self-certified reconciliation statement |
| Auditor certification | Required under old framework | Not required merely because GSTR-9C is filed |
| Threshold for GSTR-9C under current Rule 80 | Historical thresholds differed | Aggregate turnover exceeding ₹5 crore |
| Small taxpayer exemption | Granted through specific notifications for specified years | Up to ₹2 crore exempt for FY 2024-25 onwards |
| Filing restriction | No statutory three-year restriction in original framework | Section 44(2) generally restricts filing after three years |
The transition from the old audit-based framework to the current self-certification model was implemented from 1 August 2021.
Key Points to Remember
The important points regarding Section 44 are:
- Section 44 deals with the annual return under GST.
- The annual return covers a financial year.
- It is generally furnished electronically.
- The normal due date prescribed under Rule 80 is 31 December following the end of the financial year.
- Input Service Distributors are excluded from Section 44.
- Persons paying tax under Section 51 are excluded.
- Persons paying tax under Section 52 are excluded.
- Casual taxable persons are excluded.
- Non-resident taxable persons are excluded.
- Certain Government departments and local authorities are also covered by the statutory exemption in the second proviso.
- The Commissioner may exempt specified classes of registered persons from annual-return filing on the recommendation of the GST Council.
- For FY 2024-25 onwards, registered persons with aggregate turnover up to ₹2 crore are exempt from filing GSTR-9 under Notification No. 15/2025-Central Tax.
- FORM GSTR-9 is the principal annual return for applicable regular taxpayers.
- Composition taxpayers follow their prescribed annual-return mechanism, including FORM GSTR-4 under the applicable rules.
- GSTR-9C is a reconciliation statement required for specified taxpayers.
- Under Rule 80, taxpayers with aggregate turnover exceeding ₹5 crore are required to furnish self-certified GSTR-9C, subject to applicable exclusions.
- The mandatory GST audit under Section 35(5) was removed with effect from 1 August 2021.
- Current GSTR-9C is self-certified rather than the old mandatory auditor-certified GST reconciliation statement.
- GSTR-9 should not be treated as a mechanism for claiming fresh input tax credit.
- Additional tax liability identified during annual reconciliation should be discharged through the applicable prescribed mechanism.
- Section 44(2), inserted with effect from 1 October 2023, generally prevents furnishing an annual return after three years from its due date.
- The Government may permit filing after three years subject to specified conditions and restrictions.
- Late filing can attract late fees under Section 47.
- Where GSTR-9C is mandatory, filing GSTR-9 alone does not necessarily complete the annual-return requirement.
- The latest notified GSTR-9 and GSTR-9C formats should always be used for the relevant financial year.
👉 Read More → Section 43A – Procedure for furnishing return and availing input tax credit
Conclusion
Section 44 of the CGST Act provides the statutory foundation for GST annual return filing. The annual return brings together information reported by a registered taxpayer during the financial year and provides an opportunity to reconcile turnover, tax liability, input tax credit and tax payments.
The current framework is significantly different from the original GST annual-return system. From 1 August 2021, the mandatory GST audit under Section 35(5) was removed and Section 44 was substituted to provide for an annual return that may include a self-certified reconciliation statement.
For taxpayers whose aggregate turnover exceeds ₹5 crore, Rule 80 requires a self-certified reconciliation statement in FORM GSTR-9C along with the annual return, subject to the specified exclusions.
At the same time, not every registered person is required to file GSTR-9. The law excludes categories such as ISDs, TDS deductors, TCS collectors, casual taxable persons and non-resident taxable persons, while the Commissioner can also exempt specified classes of taxpayers. For FY 2024-25 onwards, taxpayers having aggregate turnover up to ₹2 crore have been exempted from filing GSTR-9.
The introduction of Section 44(2) from 1 October 2023 has also made timely compliance more important by generally restricting filing of an annual return after three years from its due date, subject to Government-permitted exceptions.
For a taxpayer, the annual return should therefore be treated not merely as another GST form, but as a year-end reconciliation of GST records with the financial records of the business. Proper reconciliation of turnover, ITC, tax liability and tax payments before filing can help identify discrepancies and reduce the risk of future compliance issues.
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