GSTR-9C

• Ensures accuracy and transparency: GSTR 9C helps compare the information provided in the GST annual return (GSTR 9) and the audited financial statements. This ensures that the information provided is accurate and transparent.

• Helps identify errors and discrepancies: The reconciliation process involved in GSTR 9C helps businesses identify any discrepancies or errors in their financial records or GST returns. This enables them to rectify the same before filing.

• Minimises the risk of non-compliance: Filing GSTR 9C is mandatory for businesses with an annual turnover of more than ₹2 Crores. Failure to file GSTR 9C or filing incorrect information can result in penalties and fines, thereby encouraging businesses to comply with GST regulations.

• Facilitates the audit process: GSTR 9C return filing serves as an important document during audits conducted by the GST authorities. Having accurate information and a certified reconciliation statement can help businesses avoid any penalties or issues during the audit process.

This part is populated with information on turnover, taxes paid, and input tax credit collected on a given GSTIN, as reflected in the audit books of a firm/company. The statement of reconciliation of GSTR 9C form is further divided into the following subsections:

• Section I

This section requires the taxpayer to fill in basic information such as GSTIN, financial year, and legal and trade names. Also, the taxpayer needs to provide the details of any audit law that they might be subject to.

• Section II

This involves an entry of the total turnover, both taxable and gross, as filed in the GSTR 9, along with the audited financial statements. This would require detailed segregation of the Audited Financial Statements (AFS) at the GSTIN level to be reported on GSTR 9C. As per the recent Central Board of Indirect Taxes & Customs notification, declaration of turnover adjustments in tables from 5B to 5N is now optional and all the necessary adjustments shall be mentioned in table 5O.

• Section III

In this section, slab-wise GST liability is to be mentioned as per the audited accounts as well as the actual tax paid as per the GSTR-9 filed by the business. Any differences between the two values also need to be recorded in this section, and the taxpayers must declare any additional tax liability arising out of such unreconciled differences.

• Section IV

This part comprises the reconciliation of net ITC (Input Tax Credit) claimed and used by the taxpayers as declared in GSTR 9 and the AFS (Audited Financial Statements). However, the details of tables 12B, 12C, and 14 were made optional for FY 2020-21, and the taxpayer could choose to skip filling in the details for the same:

1. Table 14- Detailed break up of reconciliation of ITC as stated in GSTR 9 with ITC claimed on expenses as per AFS or account books.

2. 12C- ITC recorded in the present financial year to be claimed in the succeeding financial years.

3. 12B – ITC recorded in previous financial years as claimed in the present financial year.

• Section V

In this section, the auditor needs to declare any outstanding tax highlighted in the process of reconciliation and GST audit. This tax liability could be gathered from the non-reconciliation of ITC or turnover based on:

• Amount incurred towards supplies but missing from GSTR 

• Refund initiated erroneously and therefore must be returned

• Any other outstanding liabilities pending settlement

 

Lastly, the GSTR 9C format provides the taxpayers with an option to settle the outstanding taxes as suggested by the auditor towards the closing of the reconciliation statement.

2. Part B: Certificatione it 

• After the reconciliation process, the GSTR 9C for a given GSTIN may be certified by the CA who performed the GST audit or any other CA who was not part of the GST audit.

• In case of a certification by a CA who did not perform the audit, they must have reached an opinion based on the account books audited by the CA in the reconciliation statement.

• Basic Details:

This part includes the basic details of the taxpayer, such as name, GSTIN, financial year for which GSTR 9C is being filed, etc.

 

Reconciliation of turnover declared in audited financial statements with turnover declared in Annual Return (GSTR-9):

 

This part requires reconciliation of the turnover declared in the audited financial statements with the turnover declared in GSTR-9.

• Reconciliation of Tax Paid:

In this part, reconciliation of the tax paid as per the audited financial statements with the tax paid as per the GSTR-9 is required.

• Reconciliation of Input Tax Credit (ITC):

This part requires reconciliation of the ITC claimed as per the audited financial statements with the ITC claimed as per the GSTR-9.

• Other Reconciliations:

Any other reconciliation required between the audited financial statements and the GSTR-9 should be mentioned in this part.

2. Part B - Certification

• Certification by the Auditor:

The auditor should provide a certificate in this part stating that the reconciliation statement in Part A has been verified and found to be true and correct.

• Certification by the Taxpayer:

The taxpayer should provide a certificate in this part stating that they have provided all the required information for the reconciliation statement in Part A, and that it is true and correct to the best of their knowledge.

• Digital signature certificate (DSC) for authentication purposes.

• Auditor's report in Form GSTR 9C, duly signed by a chartered accountant.

• Audited annual financial statements including the balance sheet, profit and loss account, and cash flow statement.

• Details of all invoices, debit notes, credit notes, and other relevant documents for the financial year being audited.

• Details of all outward and inward supplies made during the financial year.

• Details of Input Tax Credit (ITC) availed and utilised during the financial year.

• A reconciliation statement between the audited financial statements and the annual return in Form GSTR 9.

• Any other relevant documents as required by the auditor or the GST authorities.

 

It is important to ensure that all the information provided in the GSTR 9C is accurate and complete to avoid penalties and late fees.