GSTR 9C: Audit under GST - Applicability & Procedure

What is the audit under GST and its types?

As per section 2(13) audit” means an examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder;

Let's understand the meaning of audit in simple language, audit is

• Examination of
  1. Records
  2. Returns
  3. And other documents
• Maintained or furnished under GST law or any other law
• By the registered person
• To verify the correctness
  1. Turnover declared
  2. Taxes paid
  3. Refund claimed
  4. Input tax credit availed
• To assess the compliance with provision of Act

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What are the different types of audit under GST?

Audit under GST can be categorised into these three categories

1. Turnover Based Audit

2. General Audit

3. Special Audit

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What are the key points under GST audit ?

1. Which documents are required to be submitted under GST Audit?

• Annual Return u/s 44(1)
• Audited Annual Accounts
• Reconciliation statement to be furnished in the GSTR-9C
• Such other particulars as may be prescribed

2. What is the need of Reconciliation statement ?

The need of reconciliation statement arises as the annual return is prepared based on transactions reported during the year in various return wherein supply of all nature required to be reported, whereas the books of accounts maintained based on seperate principles.

There may be many transactions which may take place in Annual return but not in the books of accounts like treatment of trade discount, credit notes, unadjusted advances, unbilled revenue etc. hence the reason to bring reconciliation statement is to find out the differences and reasons for such differences.

3. What is the due date of GST Audit ?

The due date of furnishing GST Audit Report is 31 December, 2019 of subsequent fiscal year.
However, the due date of furnishing GST Audit Report for F.Y. 2017-18 is 30 November, 2019 which was extended from 31st August, 2019
Previously the due date was 30th June, 2019 which was extended from 31st December, 2018.

4. What is the penalty of non-compliance under GST Audit ?

There is no specific penalty given for non-compliance of provisions of GST Audit however general penalty may be imposed in case of non-compliance of Rs.25,000/- given under section 125 of CGST and SGST Act.

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What is GSTR-9C?

GSTR-9C is a reconciliation statement between:

• The annual returns filed in GSTR-9 for a financial year, and
• The figures from the taxpayer’s audited annual financial statements.

This statement includes the gross and taxable turnover as recorded in the books, reconciled with the corresponding figures from all GST returns filed for the year. Any discrepancies identified in this reconciliation must be reported in GSTR-9C along with explanations and then certified by the taxpayer. The certified statement must be submitted for each GSTIN, meaning multiple GSTR-9C forms may be required for a single PAN.

GSTR-9C must be prepared and self-certified by the taxpayer, then filed on the GST portal or through a facilitation center. Supporting documents, such as a copy of the audited accounts and the GSTR-9 annual return, must also be submitted. This requirement applies to all taxpayers required to have their annual accounts audited under GST laws.

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What is the difference between GSTR 9 & GSTR-9C?

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GSTR-9C Applicability & GSTR-9C Turnover Limit

Every registered person under GST with an annual turnover exceeding the GSTR-9C threshold of Rs. 5 crore is required to file GSTR-9C.

According to CBIC’s CGST Notification No. 30/2021 dated 30th July 2021, foreign companies in the airline business, compliant with the Companies Act 2013, are exempt from filing GSTR-9C.

Additionally, non-residents providing OIDAR services to unregistered persons in India are exempt from filing both GSTR-9 and GSTR-9C.

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What is the Due Date of GSTR-9C?

The due date for filing GSTR-9C aligns with the due date for submitting the annual return in GSTR-9, which is on or before 31st December of the year following the relevant financial year under audit. The government may extend this deadline if needed. For example, the due date for GSTR-9C for FY 2023-24 is 31st December 2024.

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Why is GSTR-9C Important?

The taxpayer is responsible for preparing this GST reconciliation statement. Any discrepancies between the sales, tax, or input tax credit details reported in all GST returns and those in the audited accounts must be documented, along with explanations for these differences.

This statement serves as a basis for GST authorities to verify the accuracy of the GST returns filed by taxpayers following self-certification.

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What is the structure of GSTR-9C

The reconciliation statement is divided in two parts :

• Part A: It is the reconciliation statement
• Part B: Is is the certification by a chartered Accountant or cost accountant

Part A: It is further subdivided in 5 parts

Part I: seeks basic details about the registered person like FY, GSTIN, legal name, trade name. It is also required to mention whether registered person is liable to be audited under any other Act.

Part II: This part requires the reconciliation of turnover declared in audited financial statement with turnover declared in Annual Return. There may be so many reasons for such differences.

Part III: This part deals with reconciliation of taxes paid

Part IV: Reconciliation of Input Tax Credits as per books of account and ITC as declared in the Annual Return

Part V: This part requires the auditor to recommend additional liability arising due to non-reconciliation. The additional liability has been mentioned separately under various categories of rates of tax, input tax credits, interest, late fees, penalty, any other amount not included in the GSTR-9, erroneous refund to be paid back and outstanding demands to be settled.

GSTR-9C under GST is a reconciliation statement that plays an important role in GST return filing. However, understanding GST compliances can be complicated, especially for non-experts. Don’t worry! Whether you have a tax query or need help with GSTR filing, ITR filing, or any other tax-related service, our experts have got you covered. Book a tax expert now!

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