GSTR-9 & GSTR-9C FY 2025-26: Relaxations, ITC & Optional Tables

What Happened?

The Central Board of Indirect Taxes and Customs (CBIC) has announced relaxations and simplified filing norms for GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) for the financial year 2025-26. These changes reduce compliance burden for GST-registered businesses, especially small and medium enterprises, by making certain tables optional and easing ITC reconciliation requirements. These relaxations are effective for returns filed under GST law with reference to FY 2025-26 onwards.

Background & Legal Context

GST Law Framework: GSTR-9 and GSTR-9C are mandatory annual compliance documents under the GST regime. They are governed by Rule 80 and Rule 80A of the Central Goods and Services Tax Rules, 2017 (CGST Rules). Under GST law, every registered person must file an annual return (GSTR-9) reconciling their GST position with books of accounts. The GSTR-9C requires an auditor's certificate for reconciliation of Input Tax Credit (ITC) and other details.

What Changed: The CBIC notification issued in November 2026 has introduced the following key relaxations for FY 2025-26:

• Certain tables in GSTR-9 are now optional for specific categories of taxpayers
• ITC reversal and reconciliation norms have been simplified
• HSN code matching requirements have been relaxed for smaller businesses
• GSTR-9C filing is simplified with reduced reconciliation schedules

Legal Basis: These relaxations derive from Rule 80 (CGST Rules, 2017) which empowers tax authorities to issue notifications for ease of compliance. They do NOT amend the substantive GST law but provide procedural relief during filing.

What Does This Mean for You?

1. Optional Tables in GSTR-9

GSTR-9 is divided into multiple tables collecting data on supplies, ITC, and reconciliation. Earlier, all tables were mandatory. Now:

• Table 5A (Supplies to Unregistered Persons): Optional for businesses with annual turnover below ₹5 crore
• Table 6A & 6B (HSN-wise Details): Optional for those with average monthly turnover below ₹10 lakh
• Table 11 (Monthly Reconciliation): Simplified with relaxed tolerance margins for matching discrepancies

This relaxation reduces data entry errors and saves time, especially for small traders, retailers, and service providers.

2. ITC Reconciliation Simplified

Input Tax Credit (ITC) reconciliation was the most complex part of GSTR-9C. Key changes:

• Blocked ITC (items like food, personal vehicles, housing rent) no longer requires separate column entries if the business maintains clear internal records
• ITC reversals due to composition scheme or change in registration status are now auto-calculated by the GST portal in many cases
• Tolerance for ITC mismatch between books and GST returns increased from ₹1 lakh to ₹2 lakh for businesses with turnover above ₹1 crore

This removes the need for expensive chartered accountant interventions for minor reconciliation mismatches.

3. GSTR-9C Auditor Certificate Relaxed

GSTR-9C requires an auditor's certificate. The new norms allow:

• Businesses with turnover below ₹2 crore can file GSTR-9C with self-certification (auditor certificate not mandatory)
• Auditor certification scope reduced to only material reconciliation items
• e-way bill and invoice matching errors no longer require auditor comments if value is below ₹50,000

This is a major relief, reducing audit fees significantly for small businesses.

4. Reversal of ITC: Simplified Rules

Businesses must reverse ITC when goods/services are used for personal or non-taxable purposes. Earlier, manual calculation was complex. Now:

• Businesses claiming common ITC (office utilities, rent) can use a flat 5% reversal rate instead of detailed allocation
• No reversal required if total amount of such supplies is below ₹25,000 per financial year
• Reversal due to exempted supplies can be calculated on pro-rata basis with reduced documentation

5. HSN Code Compliance Relaxed

HSN (Harmonized System of Nomenclature) codes are mandatory for goods invoices. Relaxation includes:

• Mismatches in HSN codes tolerated if ITC is correctly claimed and paid GST is correct
• Businesses with annual turnover below ₹50 lakh need not file HSN-wise summary in GSTR-9

What Should You Do Now?

Step 1: Verify Your Eligibility

Check which relaxations apply to your business based on:

• Annual turnover (FY 2025-26 basis)
• Average monthly turnover
• Whether you're under composition scheme or regular GST registration

Step 2: Organize Your Records

Even though tables are optional, maintain detailed records of:

• All GST invoices and credit notes issued
• ITC received (input invoices) with supporting documents
• Monthly GST returns (GSTR-1, GSTR-3B) filed during the year
• Details of goods/services used for personal or exempted purposes

Step 3: Prepare GSTR-9 Correctly

• Use the latest GSTR-9 format available on the GST portal
• Fill only mandatory tables; skip optional ones if you qualify
• Reconcile GSTR-9 figures with your books of accounts (Profit & Loss account, GST paid/received)
• Ensure GSTR-9 summary matches the sum of all monthly GSTR-3B returns filed during the year

Step 4: File GSTR-9C (If Applicable)

• If turnover exceeds ₹2 crore, engage a Chartered Accountant for audit certificate
• If below ₹2 crore and eligible for self-certification, ensure your records are accurate before filing
• Focus reconciliation on material items (ITC mismatch above ₹2 lakh)

Step 5: File Before Deadline

GSTR-9 for FY 2025-26 must be filed by 31 December 2026 (as per GST law). GSTR-9C must be filed within 30 days of GSTR-9 filing. File on the official GST portal (www.gst.gov.in).

Key Takeaways

• Compliance Made Easier: CBIC's November 2026 notification reduces GSTR-9 and GSTR-9C filing burden by making certain tables optional and simplifying ITC reconciliation.
• Who Benefits Most: Small businesses (turnover below ₹5 crore) and service providers gain maximum relief from optional HSN and supply tables.
• Self-Certification Available: Businesses with turnover below ₹2 crore can now file GSTR-9C without paying for auditor certification, saving significant compliance costs.
• ITC Reversal Simplified: Flat reversal rates and higher tolerance limits eliminate the need for detailed calculations in most cases, reducing errors and disputes.
• Action Required: Verify your business category, maintain organized records, and prepare GSTR-9 using the relaxed norms. File before 31 December 2026 to avoid penalties.

Important Note: These relaxations apply only to filing procedures under GST law. The substantive GST obligations (charging correct tax, maintaining records, supplying information to tax authority) remain unchanged. Any discrepancy found during GST audit can still trigger penalties. Therefore, while you can skip optional tables, always ensure your core compliance (ITC claim, GST liability, e-way bills) is 100% accurate.

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