Do proprietors need to file GSTR-9?

Proprietors (sole proprietorships) need to file GSTR-9 only if their annual aggregate turnover exceeds ₹2 crore. For those below this threshold, GSTR-9 filing is optional—not mandatory. This clarification addresses a common confusion among small traders nationwide.

What is GSTR-9?

GSTR-9 is the annual GST return that consolidates information from all monthly and quarterly GST filings (such as GSTR-1, GSTR-3B) over a financial year.

• It covers all details of sales, purchases, tax payments, and input tax credits.

• Due date: Usually December 31 following the end of the financial year; can be extended by notifications.

Why Does GSTR-9 Matter?

• Ensures comprehensive annual tax compliance under GST.

• Offers reconciliation between books of accounts and GST returns, helping reduce audit risk and misreporting.

• Required for maintaining eligibility for input tax credits and other benefits under GST law.

Who Must File GSTR-9?

Applicability to Proprietors (Sole Proprietorships)

• Every regular GST-registered taxpayer—including proprietors—must file GSTR-9 if their annual aggregate turnover exceeds ₹2 crore.

• Turnover includes all taxable, exempt, interstate, and export supplies made under a single PAN.

• For those below ₹2 crore turnover (including most small traders, shopkeepers, consultants, etc.), GSTR-9 is optional, not compulsory from FY 2023-24 onwards per government notifications.

Exemptions

• Composition scheme taxpayers (they file GSTR-9A instead)

• Casual taxable persons

• Non-resident taxable persons

• Input service distributors (ISD)

• Businesses solely doing TDS under GST (file other forms)

How Does the Turnover Threshold Work?

• The ₹2 crore limit applies to aggregate turnover on an all-India basis for the relevant financial year for a sole proprietor's business.

• If the turnover crosses this threshold, the proprietor must file GSTR-9 for that year.

• If the turnover stays below ₹2 crore, filing GSTR-9 is voluntary for ease of compliance.

Example Scenarios

• Proprietor has annual GST turnover of ₹1.8 crore: GSTR-9 is optional.

• Proprietor has annual GST turnover of ₹2.5 crore: GSTR-9 filing is mandatory.

• Registered but inactive sole proprietor (no business done): If turnover is below ₹2 crore, can skip GSTR-9.

What Happens If GSTR-9 is Filed Voluntarily?

• Once filed, GSTR-9 cannot be revised, so accuracy is essential.

• Filing may aid in documentation for loans, funding, or statutory compliance, but also increases reporting responsibility.

Steps and Penalties

How does GSTR-9 filing work?

• File online via the GST portal (gst.gov.in) after collating sales, purchase, and tax details.

• Deadline: December 31 (for the preceding financial year), subject to government extensions.

• Non-filing (when required): ₹200 per day (₹100 CGST + ₹100 SGST), capped at 0.25% of firm turnover.

Table: GSTR-9 Filing Rules for Proprietors (2025)

Common Questions

1. Is GSTR-9 required for all sole proprietorships?

• No, only if turnover exceeds ₹2 crore for the year.

2. What about MSMEs and small traders with low turnover?

• If turnover ≤ ₹2 crore, can skip GSTR-9 without penalty.

3. Can GSTR-9 be revised?

• No; verify details carefully before filing.

4. Does the rule apply for FY 2024-25?

• Yes, unless the GST Council or CBIC announces a change.

Sole proprietors need to file GSTR-9 only if their annual turnover exceeds ₹2 crore; for smaller businesses, this requirement is now optional, making compliance easier for micro and small traders. Always check for latest notifications, especially before each annual deadline.