GSTR-9C Reconciliation Statement and Certification – Detailed Analysis

GSTR-9C – Reconciliation Statement and Certification Overview

GSTR-9C, also known as a reconciliation statement, is basically an annual audit form or report which shows the reconciliation of the taxpayer for the end of the year. This type of reconciliation statement was issued by the government of India under the Goods and Services Tax(GST) Act, 2017, in which a registered taxpayer whose annual turnover is more than Rs. 2 crores is required to have his/her books of accounts audited as mandated in Section 35 (5) of the Central Goods and Services Tax (CGST) Act, 2017.

The GSTR-9C annual audit report is to be submitted online on the GSTN portal i.e., https://gst.gov.in. Thus, registered taxpayers with over Rs. 2 crores worth of their annual turnover must furnish a copy of the audited annual accounts statement along with a reconciliation statement, which must be duly certified at the time of submitting Form GSTR-9C online.

Thus, it can be said that GSTR-9C is a GST reconciliation statement for a particular financial year, which is mandated to be filed by registered tax payers and must be submitted no later than 31st December. Also, before submitting GSTR-9C, tax payers are required to have their accounts audited by certified chartered accountants (CAs).

In addition, GSTR-9C is a declaration of reconciliation between:

  • The Annual Statements in GSTR-9, which is filed for a financial year, and
  • The figures with regard to the annual audited financial statements of the registered taxpayer

This statement of reconciliation may be taken into consideration to be just like that of a tax audit file furnished under the Income Tax Act. Generally, it is composed of gross and taxable turnover as in accordance with the Books of Accounts reconciled with the respective figures as in accordance with the consolidation of all the GST returns for a given fiscal year. So, any differences bobbing up from this reconciliation exercise can be pronounced here alongside the motives for the same. The certified statement shall be issued for each Goods and Services Tax Identification Number (GSTIN). Therefore, for a registered tax payer’s Permanent Account Number (PAN), there may be more than one Form GSTR-9C that may need to be filed.

Importance of Filing GSTR-9C

A Chartered Accountant (CA), sometimes also referred to as a Cost Accountant, is required to prepare the GST Reconciliation declaration i.e., GSTR-9C. Also, any differences among the information mentioned in all the GST returns and the Audited Accounts ought to be reported through the CA therein with the motives for the variations. This statement acts as a base for the GST government to verify the correctness of the GST returns filed by using the taxpayers. This is because the CA has to certify any extra liability bobbing up out of the reconciliation exercising and GST audit in GSTR-9C.

Eligibility for Filing GSTR-9C Return

GSTR-9C is required to be organized and certified with the aid of a Chartered Accountant (CA) or Cost Accountant. It needs to be filed at the GST portal or through a facilitation centre through the taxpayer, together with other documents, such as the reproduction of the Audited Accounts and Annual Return in form GSTR-9. It is applicable to all those taxpayers who are mandated to get their Annual Accounts audited, as per the GST regulations. Audit under the GST law applies to such registered tax payers whose yearly aggregate turnover exceeds Rs. 2 crores in that financial year.

Due Date for Filing GSTR-9C

As per the regulations stated in the GST Act 2017, the due date for submitting the annual returns in GSTR-9 will be the same closing date for submission of GSTR-9C. So, the GSTR-9C is required to be filed on or before 31st December of the year next to the relevant financial year under audit.

The due date may be prolonged via the Government if deemed necessary. For instance, for the fiscal year (FY) 2018-19, the due date for filing GSTR-9C is 30th November 2020.

Extension of Due Date for GSTR-9C Filing – Update as on 3rd February 2020

The due date for Forms GSTR-9 and GSTR-9C has been again pushed to 5th and 7th of February 2020 by CBIC notification stated as under:

(a) 5th February 2020

The states include Chandigarh, Delhi, Gujarat, Haryana, Jammu and Kashmir, Ladakh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and Uttarakhand.

(b) 7th February 2020

The states and Union Territories (UT) include Andaman and Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Dadra and Nagar Haveli and Daman and Diu, Goa, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Telangana, Tripura, West Bengal and other territories of India.

The States or Union Territories (UT) have been regrouped as follows:

  • The date for filing GSTR-9 and GSTR-9C for all States or Union Territories earlier due on 3rd February 2020 has been pushed to 7th February 2020, except Tamil Nadu. The due date in Tamil Nadu is extended to the 5th of February 2020.
  • The date for filing GSTR-9 and GSTR-9C for all States or Union Territories earlier due on 5th February 2020 remains unchanged except for the addition of Ladakh. The due date for the state of Himachal Pradesh is now pushed to 7th February 2020. Also, the due date for taxpayers in Uttar Pradesh, earlier being 7th February 2020 is now preponed to 5th February 2020.
  • The last date of 7th February 2020 is unchanged for the remaining States or Union Territories earlier falling under this group, with the addition of Himachal Pradesh and removal of Uttar Pradesh.

Format of Form GSTR-9C

Generally, the Form GSTR-9C is composed of two parts, namely:

(a) Part A – Reconciliation Statement

(b) Part B – Certification

Thus, the two parts of Form GSTR-9C are given in details as follows:

Part A – Reconciliation Statement

The figures contained in the audited financial statements are at PAN level. Therefore, the turnover, tax paid and input tax credit (ITC) earned on a selected GSTIN (or State/UT), is required to be pulled out from the audited accounts of the corporation as a whole.

Thus, according to the Notification No. 56/2019 issued on 14th November 2019 for financial year (FY) 2017-18 and 2018-19:

  • Details of turnover adjustments to be made in tables 5B to 5N have been made optional, and adjustments, if any, which are required to be reported can be reported in Table 5O by the taxpayer.
  • A tax payer may choose to not provide the details of ITC reconciliation in tables 12B, 12C and 14.

The Reconciliation Statement is divided into five parts, which are given as follows:

Part-I – Basic Details

This consists of financial year (FY), GSTIN, legal name and trade name. Also, the taxpayer ought to point out if he/she is subject to audit under another law.

Part-II – Reconciliation of turnover declared in the Audited Annual Financial Statement with turnover declared in Annual Return (GSTR-9)

This involves reporting the gross and taxable turnover declared within the Annual go back with the Audited Financial Statements. One is required to note that most often, the Audited Financial statements are based on a PAN level. This may require the break up of the audited economic statements at GSTIN level for reporting in GSTR-9C.

Part-III – Reconciliation of Tax Paid

This section requires GST rate-smart reporting of the tax liability that arose as consistent with the debts and paid as reported within the GSTR-9 respectively with the differences thereof. Further, it requires the taxpayers to state the extra legal responsibility because of unreconciled differences observed upon reconciliation.

Part-IV – Reconciliation of Input Tax Credit (ITC)

This component consists the reconciliation of input tax credit score availed and utilised by using taxpayers as pronounced in GSTR-9 and as said inside the Audited Financial Statement. Further, it wishes a reporting of Expenses booked as in step with the Audited Accounts, with a breakup of eligible and ineligible ITC and reconciliation of the eligible ITC with that amount claimed as in step with GSTR-9. This declaration might be after considering the reversals of ITC claimed, if any.

Part-V – Auditor’s advice on extra liability due to non-reconciliation

Here, the auditor needs to file any tax liability identified through the reconciliation workout and GST audit, pending for payment by way of the taxpayer. This could be non-reconciliation of turnover or ITC on account of:

  • Amount paid for supplies now not included within the Annual Returns (GSTR-9)
  • Erroneous Refund to be paid back
  • Other Outstanding demands to be settled

Last, but not the least, the instructions to the format of GSTR-9C specifies that an option might be given to taxpayers to settle taxes as endorsed by using the auditor at the cease of the reconciliation statement.

Part B – Certification

There are two kinds of certificates given in this Part-B:

  • Form-I is relevant while reconciliation declaration has been drawn up by the same individual who has conducted the audit.
  • Form-II is relevant in which reconciliation assertion isn’t always drawn up with the aid of the same individual who had conducted the audit.

Example:

XYZ enterprise is required to get its bills audited from training Chartered Accountant below Companies Act, 1956. If the reconciliation assertion in Form GSTR-9C is drawn-up via the equal Chartered Accountant who has audited the accounts of XYZ corporation under the Companies Act, 1956, then the auditor is needed to difficulty the certificate in Form-I.

In different cases, Form-II is applicable.

The GSTR-9C can be certified by way of the same professional chartered accountant (CA) who carried out the GST audit or it is able to be also certified via every other CA who did now not conduct the GST audit for that unique GSTIN.

The difference between the two is that in case the CA who is certifying the GSTR-9C did not conduct the GST audit, then he should have based opinion at the Books of Accounts audited via every other CA inside the reconciliation statement. The layout of Part-B for certification file will vary depending on who the certifier is.

Thus, according to Notification No. 56/2019 issued on 14th November 2019 for financial year (FY) 2017-18 and 2018-19:

The declaration part has minor or very little changes, including the declaration by the auditor, which now reads “true and fair” instead of “true and correct”, before his/her signature and stamp/seal.

Taxpayers need to report the GST returns for all the months of FY 2017-18 in GSTR-1, GSTR-3B and GSTR-9, respectively.

At the quit of this return, taxpayers shall be given an option to pay any additional liability declared in this form, through Form DRC-03. Taxpayers shall select ’Reconciliation Statement’ in the drop-down list furnished in Form DRC-03. It may be stated that such liability shall be paid through electronic cash ledger only.

Documents to be Enclosed with Form GSTR-9C

The following files are required to be enclosed with Form GSTR-9C at the time of online submission:

  • A copy of the audited financial statements in accordance with Section 35 (5).
  • A copy of the audit document where the audit of the entity is achieved via another man or woman under a statute aside from the GST Act.


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