Hello. In this post, we will be taking a deep dive into GSTR 9C to understand different concepts such as:
- What is GSTR-9C?
- Who will prepare and submit this return?
- What is the due date for filing?
- The importance of this return
- The contents to be shown in GSTR 9C
GSTR 9C is the GST reconciliation Statement for a particular financial year. Taxpayers have to get it certified by CAs before filing. The due date for filing GSTR-9C is on or before 31st December.
GSTR 9C is used for Normal GST Audit / Certification by a Chartered Accountant or a Cost Accountant. It means every registered taxpayer whose aggregate turnover during a financial year exceeds 2 crore rupees has to get their statement audited. Also, they have to furnish a copy of audited annual accounts and a duly certified reconciliation statement in FORM GSTR 9C.
What is GSTR-9C?
GSTR-9C is a statement of reconciliation between:
- GSTR 9 (Annual returns) filed for an FY, and
- Figures as per Audited Annual Financial statements of the taxpayer.
GSTR-9C is to be certified by the CA. It is similar to the tax audit report furnished under the Income tax act.
It will consist of gross and taxable turnover as per the Books reconciled with the respective figures as per the consolidation of all the GST returns for an FY. Hence, any differences arising from this reconciliation will be reported along with the reasons for the same.
The certification is separate for different GSTINs of the same company. So, for one PAN there can be many reports of GSTR 9C.
Who will prepare & submit GSTR 9C?
A Cost Accountant or a Chartered Accountant has to prepare and certify GSTR 9C. It has to be submitted on the GST portal along with:
- the GST Annual Returns(GSTR-9) and
- the Audited Financial Statements
You can also file through the facilitation center.
This statement is applicable to all those taxpayers who must get their Annual Accounts audited under the GST laws.
What is the due date for GSTR 9C?
The due date for submitting the GSTR 9C has the same deadline as of submitting GSTR 9. Hence, you have to file GSTR 9C on or before 31st Dec of the year subsequent to the relevant FY under audit. For example, for the FY 2017-18, the due date for filing GSTR 9C will be 31st Dec 2018.
What’s the importance of GSTR 9C?
A Chartered accountant or cost accountant will prepare this GST Reconciliation statement. The CA has to report any differences between the details in GST returns and the audit.
Also, this statement acts as a base for the GST authorities to verify the correctness of the GST returns filed by the taxpayers. This is because the CA has to certify any additional liability arising out of the reconciliation exercise and GST audit in GSTR 9C.
What are the contents of the GSTR 9C?
GSTR-9C consists of two main parts:
- Part-A: Reconciliation Statement
- Part-B: Certification
Part-A: Reconciliation Statement
The figures in the audited financial statements are at PAN level. Hence, the turnover, Tax paid and ITC earned on a particular GSTIN must be taken out from the audited accounts of the organisation as a whole.
The Reconciliation Statement consists of five parts as follows:
Basic details -> Consists of FY, GSTIN, Legal Name, and Trade Name. The taxpayer must also mention if they are subject to audit under any other law.
Reconciliation of turnover declared in the Audited Annual Financial Statement with turnover declared in Annual Return (GSTR 9) -> the process consists of reporting the gross and taxable turnover declared in the Annual return with the Audited Financial Statements. As Audited Financial statement is at a PAN level, this might require the break-up of the audited financial statement at GSTIN level for reporting in GSTR 9C.
Reconciliation of tax paid -> This section requires GST rate-wise reporting of the tax liability that arose in FY as per the accounts and paid as reported in the GSTR 9 respectively with the differences thereof. Also, it requires the taxpayers to state the additional liability due to un-reconciled differences noticed upon reconciliation.
Reconciliation of Input Tax Credit (ITC) -> this consists the reconciliation of input tax credit availed and utilized by taxpayers as reported in GSTR 9 and as reported in the Audited Financial Statement. Also, it needs a reporting of expenses booked as per the audited accounts, with a breakup of eligible and ineligible ITC. And the reconciliation of the eligible ITC with that amount claimed as per GSTR 9. This declaration will be after considering the reversals of ITC claimed, if any.
Auditor’s recommendation on additional Liability due to non-reconciliation -> Here, the Auditor must report any tax liability identified through the reconciliation process and GST audit, pending for payment by the taxpayer.
This can be non-reconciliation of turnover or ITC on account of:
- Amount paid for supplies in case not included in the Annual Returns(GSTR 9)
- Erroneous Refund to be paid back
- Other Outstanding demands to be settled
The GSTR 9C can be certified by the same CA who conducted the GST audit. Also, it can be certified by any other CA who did not conduct the GST Audit for that particular GSTIN.
The difference between both is that in case the CA certifying the GSTR 9C did not conduct the GST audit, he must have based an opinion on the Books of Accounts audited by another CA in the reconciliation statement. The format for certification report will vary depending on who the certifier is.
And with that, we end this post of GSTR 9C. If you have any questions, drop them in the comment section below.