Whether Non Filer is also liable for GST Annual Return or GST Audit?
First for all we need to understand who is fall under category of Non-filer then only we can understand the various provisions applicable to him.
Meaning of Non-filers
If a registered taxable person fails to file:
- The monthly return prescribed for a person liable to pay tax;;
- The quarterly return for a person opting for composition;
- The monthly return for a person deducting tax at source;
- The monthly return in case of an Input Service Distributor;
- The final return in the case of a person who has applied for cancellation even after the notice has been served to him.
Then the proper officer can proceed under Section 62 of the CGST Act 2017 to assess such person to his best judgment after a period of 15 days after the date of serving notice under Section 46 of the CGST Act 2017. Such assessment order can be passed within: –
A period of 5 years from the due date of the annual return for that year or the actual date of filing of the annual return of that year, whichever is earlier.
A period of 3 years from the due date of the annual return for the relevant year or the actual date of filing of the annual return for that year, whichever is earlier, in any other case.
Whether audit under Section 35(5) is applicable to Non-Filers or un-registered Persons liable to take registration?
The audit under Section 35(5) of the CGST Act to be conducted by CA or CWA is applicable only to a Registered Person.
A non-filer is a Registered Person under Section 25 of the CGST Act; the audit is required to be conducted under Section 35(5) of the said Act, if it satisfies the condition stated in the section. Practically such a person would not have filed his returns at all and therefore Form 9 & 9C would not be possible. Therefore, there may be no audit for him.
However an unregistered Person who is liable to take registration under Section 25 of the CGST Act is a person who has to pay tax. But the said unregistered Person is not a Registered Person defined under Section 2(94) of the CGST Act 2017. Hence in terms of Section 35(5) of the Act, audit is not required.
Whether a non-filer or an unregistered Person can be subjected to any other Audit under GST?
Under Section 66 of the CGST Act, a registered person can be ordered to go for an audit by the department by nominating a CA or CWA in accordance with the conditions laid down in Section 66 of the said Act.
Thus, a special audit cannot be conducted against an unregistered taxable person but can be ordered in respect of the non-filer. In such cases, the CA or CWA conducting the Special Audit shall audit the available information or records of that period also, in respect of which it was unregistered, but was liable to be registered.
Various Examples of Non Filer:
(a) M/s PQR have taken the GST registration but have not filed the statement of returns in GSTR 3B. Notice is issued under Section 46 for failure to file returns. Even then, no returns are filed. In such a case, M/s ABC become ‘non-filer’.
(b) M/s ABC, on registration have been filing statement of returns GSTR- I &GSTR 3B. However, Annual Return in GSTR 9 has not been filed. Proper Officer issues a notice for failure to file Annual Return within 15 days. Even then, no Annual Return is filed within the time permitted. In such a case, M/s XYZ become ‘non-filer’.
(c) M/r RAM’s turnover during the financial year exceeds Rs.20 lacs and are liable to be registered under Section 22. But he fail to obtain registration. In such a case, M/s PQR is not a ‘non-filer’ but one ‘liable to register’.
A non-filer is a person who does not file returns or statements within due dates. But it is possible that his books and records reflect aggregate turnover beyond the threshold prescribed for audit under the GST laws. In such situations the non-filer is required to get his books and records audited and mandated to file his annual return in GSTR 9 and the Reconciliation Statement in GSTR 9C. A non-filer may also be subject to special audit under the provisions of Section 66 of the CGST Act, 2017.
On the other hand, an unregistered person, even if his aggregate turnover exceeds the prescribed limit, is not required to get his accounts audited under Section 35(5) of the CGST Act.