GSTR 9C is an annual audit form a.k.a. reconciliation statement released by the government on 13 Sep,2018. As the name suggests, it is a report showing year-end reconciliation, arising out of the difference in Books of Accounts of the taxpayer and the GSTR 9 (i.e. annual return) for the relevant year. But, to our joy, not all registered taxpayers are required to file GTSR 9C. Instead, only those having the aggregate turnover exceeding Rs 2 crore during the relevant previous year are bound to follow this provision under Section 35 (5) of CGST ACT, 2017. Further, to the ease of tax filers, no hard copies are required to be furnished. Rather, a simple click and online submission to the GSTN portal will be construed as complete compliance of the law.
For understanding applicability of GSTR 9C lets us bifurcate taxpayers into two categories
The liability to file GSTR 9C has been imposed only on registered taxpayers having aggregate turnover during the relevant year in excess of Rs 2 Cr. In other words, a registered taxpayer having a turnover of less than or equal to Rs.2 Cr. is not required to file GSTR 9C. But since GSTR 9C is an Audit Report the shall be duly certified by a practicing Chartered Accountant or Cost Accountant.
Apart from making the following table details optional
Amendments in structure of GSTR 9C has been changed as under
The due date for filing GSTR 9C has not been explicitly mentioned under the provisions of law. But, the same needs to be derived from the interpretation of section 44 (2) of the CGST Act, 2017. Which states that GTSR 9C i.e. annual audit report needs to be submitted along with the annual return, GSTR 9. As per Section 44(1) of the CGST ACT, 2017 read with Rule 80 of the CGST Rules, 2017 the due date of filing GSTR 9 for the FY 2017-18 is 31st Dec 2018. Hence, we can say that the due date for filing GSTR 9C is also 31st Dec 2018.
As per section 125 of CGST and SGST Act 2017, there is a general penalty of Rs 25,000/-. Since no specific penalty has been introduced for late filing of GSTR 9C, we may say that the general penalty as mentioned above shall levy upon a defaulter in this situation
In the absence of any clear provision to revise GSTR 9C under Section 44 or Rule 80 of the CSGT Act 2017. A clear understanding can be drawn that GSTR 9C once filed cannot be amended.
Documents required to be submitted along with the Reconciliation statement in GSTR 9C are Audited Financial Statements such as
Here is the list of quick steps that need to be followed for filing the reconciliation statement-
| 1. | Each registered person is required to maintain Books of accounts (records/documents) under GST law and other laws. |
| 2. | Prepare these Annual Financial Statements based on Books of accounts
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| 3. | Get Annual Financial Statements audited under the applicable laws eg Income Tax Law, Companies Act etc. A view can be given that if audited in any other law, the audit might not be separately required to be conducted under GST. |
| 4. | If not audited under any other law, then get it audited under GST law. As per GSTR 9C instructions in Part 5 Audit at PAN level should be sufficient. There shall not be in general need to get an audit done on GSTIN level. |
| 5. | GSTIN wise details of assessee are collected in respect of
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| 6. | Thereafter Certification has to be done in part B either by CA or CMA. |
| 7. | Part B of GSTR-9C in itself is an audit as well as certification. As there is no separate audit report format provided under the law. |
| 8. | GSTR-9, GSTR-9C and audited annual financial statement (audited whether under GST or any other law) and such other details as may be prescribed (nothing prescribed till date) are required to be uploaded on the common portal on or before the end of December of subsequent FY. (Now 31st March 2019 date extended) |
The reconciliation statement is required to be prepared in two parts:-
Let us understand both the parts in detail:
Part A: This part if further subdivided into 5 parts as discussed below:This part provides the format of certification by the auditor. The format I is applicable when the certification is done either by the chartered accountant/cost accountant who had conducted the audit whereas Format II is applicable where the reconciliation statement (FORM GSTR-9C) is drawn up by a person other than the person who had conducted the audit of the accounts.
Based on the understanding that, if the audit has been completed under any other law, there may not be the requirement of getting books of account and records audited under the GST Act again. Accordingly, such person may not get the state level accounts audited separately. However, the certification as required under GSTR-9C is to be given separately for each of the GSTIN.
As per GSTR-9C, Part B auditor is required to examine the balance sheet, profit and loss account and cash flow at GSTIN level. This could lead to a view that there is need to prepare the trial balance, profit and loss account and balance sheet at the GSTIN level.
However, if one considers the instruction 5A, it provides that in case of the multi-locational unit, the turnover may be derived from the internal records of the registered person from the audited financial statement. This further states that reference to audited annual financial statement includes reference to books of account in case of persons having multi presence. Based on this, it appears that even if the state level transactions could be identified from the internal record, it could be said to be the fulfillment of the requirement of law. Hence, based on this, the author is of the view that there is no need to prepare a state level balance sheet and profit and loss account. However, it is suggested to have state-level trial balance so that all transaction pertaining to that State could be separately identified and reported in the GSTR-9 and GSTR-9C.
Considering the fact that the turnover exceeds Rs. 2 crores and audit has not been under any other law, there is a compulsory requirement to get the accounts audited under the GST Act. The audit report would be given in Part B of GSTR-9C along with comment/qualification of additional liability on unreconciled differences as per Part A of the GSTR-9C.
