How to File GSTR 9C Online Step by Step

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GST Act is administered based on the concept of ‘self-certification’. The Registered Person [RP] who files the various returns is expected to file ‘true and correct’ return. Obliviously, the act therefore provides for some checks and balances for efficient management of the levy, collection and monitoring of the Act. Therefore, like many other fiscal laws, the GST law also provides for the auditing of the accounts by a professional who is qualified and trained to carry out this important and responsible function. The Government would rely on the audit reports those are furnished by such professionals for efficient and effective administration of the taxation law.

Provisions

Section 35 of The CGST Act contains provisions for maintenance of records. Section 35(5) reads as under:

“Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or  a  cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of Section 44 and such other documents in such form and manner as may be prescribed”.

Section 44(2) reads as under:

“Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of Section 35  shall furnish, electronically,  the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed”.

Rule 80(3) of The CGST Rules prescribes the turnover limits where Audit u/s 35(5) is made applicable.

The rule reads as under:

“Every registered person other than those referred to in the proviso to sub-section(5) of section 35, whose aggregate turnover during a financial year exceeds Rs.2 crores shall get his accounts audited as specified under sub-section (5) of Section 35 and he shall furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in GSTR 9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Provided that every registered person whose aggregate turnover during the financial year 2018-2019 exceeds Rs.5 crores shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a  copy of audited annual accounts and  a  reconciliation statement, duly certified,  in FORM GSTR 9C for the financial year 2018-2019, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”

As on date the due-date for filing GSTR 9C for F.Y. 2018-19 is 30th September, 2020.

Procedure of “How to File GSTR 9C Online” Started from here:

AUDIT CERTIFICATION AND SCOPE:

The design of the Form GSTR 9C and the placing of the certification in the form has raised certain doubts about the scope of the GST Audit as envisaged under Section 35(5) of the CGST Act.

The Form GSTR 9C is designed as under:

  • PART A – Reconciliation Statement
  • Instructions
  • PART B – CERTIFICATION

You may also like: How to file GSTR 9 for Regular Taxpayers

Thus, the Forms starts with the Reconciliation Statements which are to be certified as true and correct by the GST Auditor. However, the actual certification is given in the part B, certifying information as true and fair. Interestingly, the instructions to fill up the form or what is expected to be reported in the Form is given in between parts A and B.

Perhaps, the positioning of the Certification at the end creates the doubts about the scope of the audit. Some may be inclined to say that the exercise is mere reconciliation and does not involve any auditing, warranting assuming and auditing  risk on the part of the GST Auditor. This approach seems incorrect. A closer look at the certifications as given in Part B as also the design of the reconciliation statements  in Part A will help in appreciating this aspect. However attention is drawn to the Press Release dt. 03rd July, 2019 issued by the CBIC wherein the scope of the audit in Para (h) is explained as under:

Role of chartered accountant or a cost accountant in certifying reconciliation statement:

There are apprehensions that the chartered accountant or cost accountant may go beyond the books of account in their recommendations under FORM GSTR 9C. The GST Act is clear in this regard. With respect to the reconciliation statement, their role  is limited to reconciling the values declared in annual return (FORM GSTR-9) with the audited annual accounts of the taxpayer.

Part A – Reconciliation Statement

Pt. IBasic Details
1Financial Year 
2GSTIN 
3ALegal Name<Auto>
3BTrade Name (if any)<Auto>
4Are you liable to audit under any Act?<<Please specify>>

Instructions:-

1.Terms used:
(a) GSTIN: Goods and Services Tax Identification NUMBER

2.It is mandatory to file all your FORM GSTR-1, FORM GSTR-3B and FORM GSTR 9 for current financial year before filing this return. For FY 2017-18, the details for the period between July 2017 to March 2018 are to be provided in this statement for the financial year 2017-18. The reconciliation statement is to be filed for every GSTIN separately.

3.The reference to current financial year in this statement is the financial year for which the reconciliation statement is being filed for.

NOTES

1.Section 35(5) – Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a CA or a CWA  and shall submit

  • A copy of audited accounts,
  • The reconciliation statement u/s 44(2) and
  • Such other documents in such form and manner as may be prescribed

2.Rule 80(3) of CGST Rules, 2017 – Every registered person whose aggregate turnover during a financial year exceeds Rs. 2 crore (Rs. 5 Crore for financial year 2018-19) shall get his accounts audited as specified under section 35(5) and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR 9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

3.Financial year in Point I (1) means the financial year for which the reconciliation statement is being filed. Financial year (FY) is not defined under GST Law. As per General Clauses Act, FY means the year commencing on the first day of April.

4.GSTIN means Goods and Services Tax Identification Number. It may be noted  that reconciliation statement is to be filed for every GSTIN separately. It is quite possible that there may be separate GSTIN for business unit in each State/Union territory, Business verticals within a State/UT, SEZ units, etc.

5.Legal  name and Trade  name will  be auto populated once GST number is filled  in form GSTR 9C on GSTN portal and the same is as given in GST Registration Certificate.

6.In Point number 4, the name of statute to be mentioned under which accounts are liable to be audited by assessee viz. the Income-tax Act, The Companies Act, The Societies Act, The Indian Trust Act, etc.

Point II – Table 5A

Pt. IIReconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR-9)
5Reconciliation of Gross Turnover
ATurnover (including exports) as per audited financial statements for the State/ UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement)
5AInstruction: The turnover as per the audited Annual Financial Statement shall be declared here. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons/entities with presence  over multiple States. Such persons/entities, will have to internally derive their GSTIN wise turnover and declare the same here. This shall include export turnover (if any). It may be noted that reference to audited Annual Financial Statement includes reference to books of account in case of persons/ entities having presence over multiple States.

NOTES

1.GSTIN wise turnover (as per audited financial statement/books of account) for financial year 2018-19 to be mentioned here.

2.No need to include transaction of supply which is not forming part of turnover   in audited financial statement or books of account. E.g. Free samples to related party, Interest received on loan, (except in  case of  Banking/NBFC), dividend  on shares, interest on capital, remuneration and share of profit received from partnership firm etc.

3.The data of turnover extracted GSTIN wise and ultimately at consolidated level should match with the turnover of audited financial statements/books of account including turnover of foreign branch.

4.The heading at Point II covers reconciliation of turnover declared in financial statement with turnover declared in annual return. The advances received and supply of service not made during the year needs to be reflected in Table  4F of Point II of Annual return in form GSTR 9. The Table 5(N) of annual return contains the figure/data of Total Turnover including advance. In Table 5A of Form GSTR 9C, reconciliation is to be done only for turnover and not advances. To that tune the heading at point II should include the words “Turnover declared in annual return GSTR-9 INCLUDING ADVANCES” for which no supply made during the year.

Point II – Table 5B

BUnbilled revenue at the beginning of Financial Year(+)
5BInstruction
Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting in the last financial year and was carried forward to the current financial year shall be declared here. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here.
(For example, if Rs. 10 Crores of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on Rs. 4 Crores of such revenue, then value of Rs.4 Crores shall be declared here)
For FY 2017-18 and 2018-19, the registered person shall have an option to   not fill this table. If there are any adjustments required to be reported then  the same may be reported in Table 5O.

NOTES

1.Unbilled revenue which was recorded in books of account on basis of accrual system of accounting in the previous financial year (i.e. 2017-18) and billed in current financial year (2018-19) shall be declared here.

2.Example 1: Rental income of commercial Premises for 16th March, 2018 to 15th April, 2018 is Rs. 1 Lakh. In books of account for F.Y. 2017-18, rental income was disclosed as Rs. 50,000 as unbilled revenue based on periodicity. On 16th April, 2018 Invoice was raised for Rs. 1 lakh with GST. In such case, Rs. 50,000 to be disclosed as an unbilled revenue for F.Y. 2018-19.

3.Example 2: In case of Works Contracts relating to immovable property or composite supply involving goods and  services relating to  movable property or  continuous supply of  goods /  services or  so, the Turnover as per Books of Account and Financial Statements will be based on the applicable Indian Accounting Standards (Ind AS).

Whereas the Turnover as per the CGST Act will be based on the contractual terms of the transaction and the provisions of time of supply of goods and services as provided under sections 12 and 13, respectively, of the CGST Act.

In such a scenario at the end of every financial year there will be certain turnover which may be a part of financial statements but not the turnover as per the GST Law and such differential turnover is termed as unbilled Revenue.

Such amount (part of the turnover) termed as unbilled revenue, at the beginning of   the financial year, is to be reported here which will be added. Similar unbilled revenue    at the end of the financial year is to be reported at Table 5H (refer hereunder) which  will be deducted.

Point II – Table 5C

CUnadjusted advances at the end of the Financial Year(+)
5CInstruction:
Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall  be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to  be reported then the same may be reported in Table 5O.

NOTES

1.Advance received during F.Y 2018-19 on which GST is paid but not recognized as revenue in financial statement for F.Y 2018-19 to be declared here.

2.Central Government vide Notification No. 66/2017- CT dated 15th November, 2017 exempts all taxpayer from payment of tax on advances received for supply of goods w.e.f. 15th November, 2017.

3.Hence, in this column only value of those advances on which GST is paid but supply is not made till 31st March, 2019 is to be included.

Point II – Table 5D

DDeemed Supply under Schedule I(+)
5DInstruction:
Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is  already part of  the turnover in the audited Annual Financial Statement is not required to be included here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.The term “deemed supply” is not defined under GST Law. Section 7(1)(C) of the CGST Act provides that the activities specified in Schedule I is to be treated as a supply even when it is made without consideration. It list out certain transactions/activities which is deemed as a supply even in absence of consideration.

2.SCHEDULE I to Section 7 of CGST Act, 2017 includes following activities to be treated as supply even if made without consideration and the value of same to be included in this Table:

(a)Permanent transfer or disposal of business assets where input tax credit has been availed on such assets

(b)Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding Rs.50,000 in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

(c)Supply of goods—

  • by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
  • by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

(d)Import of services by a person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

3.Any of the above deemed supply which is already included in turnover of audited Annual Financial Statement is not required to be included here.

4.The term “related person” is defined under Explanation to sec. 15(5) of CGST Act. The term “distinct person” is referred in sec. 25(4) and 25(5) of CGST Act.

5.When there is no consideration the value of such supply of goods / services is    to be determined as provided under rules 27 to 35 of CGST rules.

6.Example 1 – Sony Ltd. selling TV at Rs. 40,000 to employee, whose selling price to Distributor is Rs. 1,00,000. Here Rs. 60,000 is gift which will not appear in Financial Statement. The said amount of Rs. 60,000 is required to be disclosed here.

7.Example 2 – Fixed asset discarded by way of giving donation by taxable person who has claimed ITC while procuring said fixed asset.

8.Example 3 – Supply of goods or services or both by one branch to another branch of any entity having separate GSTIN for which consideration is not charged.

Point II – Table 5E

ECredit Notes issued after the end of the financial year but reflected in the annual return(-)
5EInstruction:
Aggregate value of credit notes which were issued after 31st of March for   any supply accounted in the current financial year but such credit notes were reflected in the annual return (GSTR-9) shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table.If there are any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.Credit Note issued after end of the financial year corresponding to supply made during the year and not accounted in financial year is required to be mentioned here.

2.Pick up the figures from Table 11 of GSTR Form 9.

3.This Table requires collation of data related to credit notes on account of return of goods or reduction in value of supply of goods and services made during financial year 2018-19 and credit note thereof issued during the period April  2019 to September, 2019.

Point II – Table 5F

FTrade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST(+)
Instruction:
Trade discounts which are accounted for in the audited Annual Financial Statement but on which GST was leviable (being not permissible) shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.Trade discount accounted in books but not eligible for deduction under section 15(3) of CGST Act, 2017 is to be reflected in this Table.

2.Example: Discount given after the supply without corresponding contract/ agreement thereof. Many companies gives year-end target discount based on turnover achieved in  respective year. Such discount will not be  eligible  for reduction in valuation as per section 15(3) if there is no corresponding agreement executed prior to supply made. There must be any documentary evidence available with the contracting parties to prove that the discount is given as ‘pre-agreed’ terms of supply.

Point II – Table 5G

GTurnover from April 2017 to June 2017(-)
5GInstruction:
Turnover included in the audited Annual Financial Statement for April 2017 to June 2017 shall be declared here. For FY 2017-18, the registered person shall have an option to not fill this table. If there are any adjustments required to  be reported then the same may be reported in Table 5O.

NOTES

1.For F.Y 2018-19, this clause will be NIL

Point II – Table 5H

HUnbilled revenue at the end of Financial Year(-)
5HInstruction:
Unbilled revenue which was recorded in the books of account on the basis of accrual system of accounting during the current financial year but GST was not payable on such revenue in the same financial year shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option   to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.Unbilled revenue at the end of financial year needs to be declared here.

2.Example: Rental income of commercial Premises for 16th March, 2019 to 15th April, 2019 is Rs. 1 Lakh. In books of account for F.Y. 2018-19, rental income was disclosed as Rs. 50,000 as unbilled revenue based on periodicity. On 16th April, 2019 Invoice was raised for Rs.  1 lakh. In such case, Rs.  50,000 to be disclosed as an unbilled revenue for F.Y 2018-19.

Point II – Table 5I

IUnadjusted Advances at the beginning of the Financial Year(-)
5IInstruction:
Value of all advances for which GST has not been paid but the same has been recognized as revenue in the audited Annual Financial Statement shall  be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to   be reported then the same may be reported in Table 5O.

NOTES

1.Advance received till 30th June, 2017 on which service Tax/excise/ VAT was leviable, as applicable and corresponding supply thereto is made during financial year 2018-19 without payment of GST, the same should be reflected here.

2.Example Rs. 5 lac received as advance towards taxable services in June, 2017 on which Service Tax  was paid at appropriate rate and invoice for which was raised in month of July, 2018 without payment of GST in view of section 142(11)(b) of CGST, 2017.

Point II – Table 5J

JCredit notes accounted for in the audited Annual Financial Statement but are not permissible under GST(+)
5JInstruction:
Aggregate value of credit notes which have been accounted for in the audited Annual Financial Statement but were not admissible under section    34 of the CGST Act shall be declared here. For FY  2017-18 and 2018-19,   the registered person shall have an option to not fill this table. If there are   any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.This Table  should contain the figure that of credit notes issued and accounted  for in the audited financial statement of the year but same is not permissible u/s 34 of CGST Act, 2017.

2.Example 1: Financial/commercial credit notes issued and which are expensed out in the Profit and Loss Account (Reference may be made to Circular No. 92/11/2019-GST dated 7th March 2019).

3.Example 2: Credit note for Cash discount or Credit note for goods return, issued beyond the month of September following end of financial year in which supply was made or date of furnishing annual return whichever is earlier.

Point II – Table 5K

KAdjustments on account of supply of goods by  SEZ  units to DTA Units(-)
5KInstruction:
Aggregate value of all goods supplied by SEZs to DTA  units for which the   DTA units have filed bill of entry shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O.

NOTES

1.This Table  is applicable only for taxpayers units registered as units/ developers   of SEZ.

2.This will contain data related to supply of goods made by SEZ unit to DTA unit for which bill of entry is filed by DTA unit

3.In view of section 5 of the IGST Act, GST on supply of goods by SEZ to DTA unit shall be levied and collected in accordance with Section 3 of Customs Tariff Act from the recipient i.e. DTA unit.

Point II – Table 5L

LTurnover for the period under composition scheme(-)
Instruction:
There may be cases where registered persons might have opted out of the composition scheme during the current financial year. Their turnover as per the audited Annual Financial Statement would include turnover both as composition taxpayer as well as normal taxpayer. Therefore, the turnover for which GST was paid under the composition scheme shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O

NOTES

1.A person registered under the composition scheme and who has opted out of the scheme during the year should file both forms GSTR 9 and GSTR 9A.

2.Turnover for period under composition scheme to be mentioned here.

Point II – Table 5M

MAdjustments in turnover under section 15 and rules thereunder(+/-)
5MInstruction:
There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 of the CGST Act, 2017 and rules thereunder. Therefore, any difference between the turnover reported in the Annual Return (GSTR 9) and turnover reported in the audited Annual Financial Statement due to difference in valuation of supplies shall be declared here.  For FY 2017-18 and 2018-19, the registered person shall have an option to   not fill this table. If there are any adjustments required to be reported then  the same may be reported in Table 5O.

NOTES

1.This Table  contains the data resulting on account of difference in turnover as   per Invoice raised during the year and valuation thereof as per section 15 of  CGST Act. Section 15(2) provide for inclusion of various items for purpose of computing value of Turnover.

2.Example 1: Goods sold to related party (B2C) at price lower than Market price. In such case the difference between market price and price charge will be leviable  to GST

3.Example 2: In case of Air Travel  Agent option has been given under Rule 32(3)  of CGST Rules to pay GST on the value of basic fare which will be different than  the amount shown in Financial Statement. Adjustment to that extent has to be made under this clause.

Point II – Table 5N

NAdjustments in turnover due to foreign exchange fluctuations(+/-)
5NInstruction:
Any difference between the turnover reported in the Annual Return (GSTR- 9) and turnover reported in the audited Annual Financial Statement due to foreign exchange fluctuations shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table. If there are any adjustments required to be reported then the same may be reported in Table 5O

NOTES

1.If forex gain/loss is included in turnover as per audited financial statement then corresponding addition/reduction) effect to be given here.

Point II – Table 5O

OAdjustments in turnover due to reasons not listed above(+/-)
5OInstruction:
Any difference between the turnover reported in the Annual Return (GSTR9) and turnover reported in the audited Annual Financial Statement due to reasons not listed above shall be declared here.

NOTES

1.Any other adjustment in the turnover, other than above from Table  5B to 5N    has to be reported here to add or reduce the turnover as per audited financial statements to reconcile with the turnover as declared in annual return. Hence,  this is the residuary column to reconcile the turnover.

2.Option is given to assessee to declare/disclose all the adjustment in this clause instead of disclosing in table 5B to 5N.

3.Example: Sale of Capital/Fixed Assets shall be reflected here.

Point II – Table 5P

PAnnual turnover after adjustments as above<<Auto>>

Point II – Table 5Q

QTurnover as declared in Annual Return (GSTR-9)
5QInstruction: Annual turnover as declared in the Annual Return (GSTR-9) shall be declared here. This turnover may be derived from Table Nos.5N, 10 and 11 of Annual return.

NOTES

1.Table 5Q requires a taxable person to disclose his turnover as per the Annual Return i.e., GSTR-9 filed for the relevant financial year. Therefore, the turnover arrived at Table No. 5N, 10 and 11 as per the Annual Return  in GSTR  – 9 should  be declared under Table No. 5Q. The Annual Return in GSTR – 9 should be filed before filing the reconciliation statement in Form GSTR – 9C.

Point II – Table 5R

5RUn-Reconciled turnover (Q – P)<<Auto>>

NOTES

1.The un-reconciled turnover at Table No. 5R is the difference between the Annual turnover after adjustments as above at Table  No. 5P and turnover as declared in the Annual Returns (GSTR-9)’ as declared at Table No. 5Q. The difference would be auto generated.

2.The annual turnover after adjustments as above at Table No. 5P is higher than the turnover as declared in the annual return (GSTR-9) at Table No. 5Q:

This situation arises if a taxable person has not declared some taxable outward supplies, exempted supplies and non-GST outward supplies. The value of taxable supplies forming part of the differences should be declared under Part  III Sl. No.   11 and the applicable taxes thereon shall be paid appropriately by cash. The differences in exempt supplies and non-GST outward supplies shall be declared against Part II Sl. No. 7B or 7C as the case may be and reduction from the total turnover may be sought

3.The annual turnover after adjustments as above at Table No. 5P is lower than the turnover as declared in the annual return (GSTR-9) at Table No. 5Q:

This situation may arise if a taxable person has erroneously declared a higher turnover in  the  monthly return in  GSTR –  3B  and  the  annual return in GSTR-9. The reconciliation statement in GSTR – 9C does not specifically provide to claim the benefit of tax paid erroneously. The statement which would be made available on the GST portal should be checked to verify whether the taxable value at Sl. No. 11 may be declared in the negative so that refund of tax remitted on such turnover can be claimed. Clarification on this issue is awaited.

Point II – Table 6

6Reasons for Un-reconciled difference in Annual Gross Turnover
AReason 1<<Text>>
BReason 2<<Text>>
CReason 3<<Text>>
6Instruction:
Reasons for non-reconciliation between the annual turnover declared in the audited Annual Financial Statement and turnover as declared in the Annual Return (GSTR-9) shall be specified here.

NOTES

1.The difference between gross turnover as per Table 5P  and as  declared as  per annual return at Table 5Q hereinabove is reflected here which is the unreconciled turnover. If the gross turnover as per GSTR 9C as compared to the turnover as per GSTR 9 is higher or lower then such unreconciled turnover has  to be specified and explained giving reasons and justification for same. There  may be more than one reason for such difference which shall be identified separately giving reasons for each such difference. Due to misapplication of the provisions of the GST Law or any error, there may be such difference(s) which shall be reported giving reasons for same.

Point II – Table 7

7Reconciliation of Taxable Turnover 
AAnnual turnover after adjustments (from 5P above)<<AUTO>>
7Instruction:
The table provides for reconciliation of taxable turnover from the audited annual turnover after adjustments with the taxable turnover declared in annual return (GSTR-9).
7AAnnual turnover as derived in Table 5P above would be auto-populated here.

Point II – Table 7B

BValue of Exempted, Nil Rated, Non-GST supplies, No-Supply turnover
7BInstruction:
Value of exempted, nil rated, non-GST and no-supply turnover shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any.

NOTES

1.Table 7B requires reduction of value of Exempted, Nil rated, Non-GST supplies, No-Supply turnover from the Annual turnover after adjustments to arrive at taxable turnover.

2.Nil Rated – Supplies taxable at a ‘NIL’ rate of tax E.g. supply of support Service to agriculture, forestry, fishing and animal husbandry.

3.Non-GST supplies – Non-taxable supplies as defined under Section 2(78) of the CGST Act – Supplies that are not taxable under the Act (viz. alcoholic liquor for human consumption).

4.Exempted – Supplies that are wholly or partially exempted from CGST, SGST or IGST, by way of a notification; E.g.: Education service, health care services, etc.

5.No supply – No supplies include the activities covered under Schedule III which are neither a supply of goods nor a supply of services. Examples- Sale  of land or completed building, actionable claims other than lottery, betting and gambling.

Point II – Table 7C

CZero rated supplies without payment of tax.
Instruction:
Value of zero rated supplies (including supplies to SEZs) on which tax is not paid   shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any.

NOTES

1.Table 7C of GSTR 9C requires disclosure of value of zero-rated supplies without the payment of tax which forms part of the ‘Annual turnover after adjustments (from 5P above)’ at Table No. 5P.

2.The source of information for zero-rated supplies shall be obtained from the outward supply statement in GSTR – 1 and revenue register forming part of books of account.

3.Zero-rated supplies without payment of tax effected by a Registered Person for the period April, 2018 to March 2019 should be declared against Sl. No. 7C. Zero-rated supplies on payment of tax shall form part of the turnover to be arrived at Sl. No. 7F.

Point II – Table 7D

DSupplies on which tax is to be paid by the recipient on reverse charge basis
Instruction:
Value of reverse charge supplies  on which  tax is to be paid by the recipient  shall  be declared here. This shall be reported net of credit notes, debit notes and amendments if any.

NOTES

1.Section 2(98) defines reverse charge to mean a case where liability to pay tax is on recipient of supply of goods or service instead of supplier u/s 9(3) and 9(4)    of CGST/ SGST Act or S.5(3) or 5(4) of IGST Act.

2.Example – In GSTR 9C to be filed by GTA/ lawyer, who have supplied services on which tax to is to be paid under RCM by recipient shall be reported by here.

Point II – Table 7E

ETaxable turnover as per adjustments above (A-B-C-D)<<Auto>>
7EInstruction:
The taxable turnover is derived as the difference between the annual turnover after adjustments declared in Table 7A above and the sum of all supplies (exempted, non-GST, reverse charge etc.) declared in Tables 7B, 7C and 7D above.

Point II – Table 7F

FTaxable turnover as per liability declared in Annual Return (GSTR-9)
7FInstruction:
Taxable turnover as declared in Table (4N-4G) + (10-11) of the Annual Return (GSTR-9) shall be declared here.

NOTES

1.Table  7F of GSTR 9C requires that the taxable turnover as per the liability should  be declared in the Annual Return (GSTR-9).

2.Taxable turnover as declared in Table (4N-4G) + (10-11) of the Annual Return (GSTR-9) shall be declared here.

Point II – Table 7G

GUnreconciled taxable turnover (F-E)<<Auto>>

Point II – Table 8

8Reasons for Unreconciled difference in taxable turnover
AReason 1<<Text>>
BReason 2<<Text>>
CReason 3<<Text>>
8Instruction:
Reasons for non-reconciliation between adjusted annual taxable turnover as derived from Table 7E above and the taxable turnover declared in Table 7F  shall be specified here.

NOTES

1.This part of GSTR 9C identifies the taxable turnover differences to be placed on record for explaining the differences between the GST Annual Return and the Audited Financials.

Point III

Pt. IIIReconciliation of tax paid
9Reconciliation of rate wise liability and amount payable thereon
 DescriptionTaxable ValueTax Payable
  Central taxState tax/ UT taxIntegrated TaxCess, if applicable
 123456
A5%
B5% (RC)
C12%
D12% (RC)
E18%
F18% (RC)
G28%
H28% (RC)
I3%
J0.25%
K0.10%

 DescriptionTaxable ValueCentral taxState tax/ UT taxIntegrated TaxCess, if applicable
 123456
LInterest     
MLate Fee     
NPenalty     
OOthers     
PTotal amount to be  paid as per tables above     

 DescriptionTaxable ValueCentral taxState tax/ UT taxIntegrated TaxCess, if applicable
 123456
QTotal amount paid as declared in Annual Return (GSTR 9)     
RUn-reconciled payment of amount     

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9Instruction:
The table provides for reconciliation of tax paid as per reconciliation statement and amount of tax paid as declared in Annual Return (GSTR 9). Under the head labelled RC, supplies where tax was paid on reverse charge basis by the recipient (i.e. the person for whom reconciliation statement has been prepared) shall be declared.
9PThe total amount to be paid as per liability declared in Table  9A to 9-O is auto populated here.
9QThe amount payable as declared in Table 9 of the Annual Return (GSTR-9)  shall be declared here. It should also contain any differential tax paid on Table 10 or 11 of the Annual Return (GSTR-9).

NOTES

1.After reconciling the turnover declared and reported in the Audited Financial Statement with turnover declared in Annual Return along with reasons for reconciliation if any, the relevant Part III of Form 9C requires an Auditor to reconcile the rate-wise liability of  tax, total amount payable thereon with tax actually paid as declared in the Annual Return and recommendation of additional tax payable due to non-reconciliation of the taxable value.

Special care will have to be taken to curl out and remove the payments made in the period 18-19 pertaining to liability of period 17-18 or prior and thereafter compare the liability as reported for the period 18-19 in GSTR 9 along with liability as determined as per clause 9 herein above.

2.The details of any liability of Interest under Section  50 of the GST Act accounted for in the books of account or any Late Fees for Late filing of GSTR 3B or penalty leviable under any relevant sections of the Act needs to be reported here.

Point III – Table 10

10Reasons for un-reconciled payment of amount
AReason 1<<Text>>
BReason 2<<Text>>
CReason 3<<Text>>
10Instruction:
Reasons for non-reconciliation between payable / liability declared in Table 9P above and the amount payable in Table 9Q shall be specified here.

Point III – Table  11

11Additional amount payable but not paid (due to reasons specified under Tables 6, 8 and 10 above)
 DescriptionTaxable ValueTo be paid through Cash
   Central taxState tax/ UT taxIntegrated taxCess, if applicable
 123456
 5%     
 12%     
 18%     
 28%     
 3%     
 0.25%     
 0.10%     
 Interest     
 Late Fee     
 Penalty     
 Others (please specify)     

Instruction:
Any amount which is payable due to reasons specified under Tables 6, 8 and 10 above shall be declared here

In the Table 11 under III Part of the GSTR 9C, the amount of tax, interest, penalty, late fees and other dues which are payable in accordance with the non-reconciliation reported under Tables 6,  8  and 10  but actually not paid  as declared in Annual Return in GSTR 9 are to be reported with rate-wise bifurcation. The tax actually not paid may have been paid in Form DRC-03  prior to filing of GSTR 9C. Such information may be sought from the auditee. The said information may be reported as Observation at Para 5 of Part I of Certification or Para 4 of Part II of certification (as applicable).

Clause 12

12Reconciliation of Net Input Tax Credit (ITC) 
AITC availed as per audited Annual Financial Statement for the State/ UT (For multi-GSTIN units under same PAN this should be derived from books of account) 
BITC booked in earlier Financial Years claimed in current Financial Year(+)
CITC booked in current Financial Year to be claimed in sub- sequent Financial Years(-)
DITC availed as per audited financial statements or books of account<Auto>
EITC claimed in Annual Return (GSTR-9) 
FUn-reconciled ITCITC 1

Clause 12A

AITC availed as per audited Annual Financial Statement for the State/ UT (For multi-GSTIN units under same PAN  this should be derived from books of account)
Instruction of Clause 12A
ITC Availed (AFTER REVERSALS) as per the audited Annual Financial Statement shall be declared here.In case of Entity having multiple GSTIN units under same PAN, the ITC availed after reversals for the State/UT shall be derived from the audited Annual Financials Statement.In simple words, GSTIN – wise input tax credit after reversal has to be segregated from the ITC after reversal reported in the audited Financial Statement. It appears that Profit and Loss Account does not reflect the ITC based on the GSTIN, therefore, it has been clarified in the instructions that the reference to BOOKS OF ACCOUNT in case of persons/entities having presence over multiple States.

NOTES

The derivation of the ITC in case of multi GSTIN shall be a challenge. Firstly, the auditor may not have access to the GSTIN records of other state.

In cases of persons having multiple GST Numbers, the total ITC availed (after reversals) will have to be determined from the consolidated financial statements and    a reconciliation will have to be maintained in order to ensure that the ITC figures availed in all the GSTR 9C reconciliations total up to the consolidated financial statements.

The practical way out could be checking in the books of account of entity (qua GST No.) of which he is conducting the audit vis-a-vis the data available on  the GSTN  site of that entity to double check the figures derived from Multi GSTIN.

In a single GSTIN entity, the data would be available from the tax collection account (Duties and taxes) the debit side of which can be verified for the period to arrive at the gross ITC as per books and then look for reversals and report the figure.

Persons following cash system of accounting would have taken ITC availment on cash basis only in the books of account. However, the figure availed in the returns would be higher.

The reconciliation would have to be undertaken. In view of this the provisions of sections 16, 17 and 18 read with rules 36 to 44 have to be applied on the entity for verification of the credit availed and utilized.

The basic conditions for availment of credit by a registered person of Input/ Input service/capital goods, used or intended to be used in the course or furtherance of business being:

  • In possession of a tax Invoice and/or other relevant documents
  • Have received the goods or services or both
  • tax charged has been actually paid to the government
  • return has been furnished as per section 39

Further, whether the reversals are done as per the law as required u/s 17(5) and rules 42 and 43 have to be verified.

It is only after doing the above exercise that the figure becomes comparable with table 7J of the annual return qua the GSTIN entity. However, table 6 and 7 of the annual returns may include ITC adjustments pertaining to period 17-18 done in 18-19 and hence a gross ITC availed for 18-19 and reversals done for 18-19 will  have to be determined and reconciled with the figure as ascertained above from the books.

Clause 12B

BITC booked in earlier Financial Years claimed in current Financial Year(+)
Instruction of Clause 12B
Any ITC which was booked in the audited Annual Financial Statement of earlier financial years. But availed in the ITC Ledger in the financial year for which the reconciliation statement is being filed for shall be declared here.This shall include transitional credit which was booked in earlier years but availed during financial year 2017-18. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table.

Notes

For the FY 2018-19 the ITC of the previous period 2017-18 (including belatedly filed TRAN-1 and TRAN-2) could be claimed in the period 2018-19.

The auditor needs to verify the claims made in 2018-19 pertaining to period 2017-18 from the books of account vis-a-vis the conditions laid down under law for the claim   of the same including ROD 2/2018 dated 31st December 2018. Again, the same needs   to be verified online from the system to ascertain that the claim made in the books have been registered on the Portal for its availment. The verification  of documentation vis a vis the conditions shall have to be done.

It is pertinent to note that this clause 12B has been made optional for reporting vide notification no 56/2019 dated 14th November 2019 In the event the clause is not reported , there is a possibility of mismatch of ITC as per books and as per annual return if entries pertaining to ITC and ITC reversal of 2017-18 have been booked in 2018-19. There will not be any impact if none of the entries pertaining to ITC or reversal of ITC of 2017-2018 are made in the books of 2018-19.

Clause 12C

CITC booked in current Financial Year to be claimed in subsequent Financial Years(-)
Instruction of Clause 12C
Any ITC which has booked in the audited Annual Financial Statement of the current financial year. But the same has not been credited to the ITC ledger for the said financial year shall be declared here. For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table.

There can be various situations like goods in transit. In such a situation the invoice would  be recorded  in the books as on the date of balance sheet. The ITC however will not be allowed since the goods have not been received and hence the condition   of ITC  not being satisfied, the credit of the same is not to be allowed in the period of booking.

On the basis of the exercise as above, the amount arrived at is the ITC which is availed as per books of account. This amount can now be compared with the figure  of ITC available for utilisation in the GST returns for the period July 2017 to March  2018.

In case credit reversed in the returns of 2017-18 on account of Reversal of Rule 42, 43 or 37, but the reworking of the ratios as per the Rules for the entire year results in reduction in amount of reversal, then such a scenario will also be covered in Clause 12C.

Clause 12D

DITC availed as per audited financial statements or books of account<Auto>
Instruction of Clause 12D
ITC availed as per audited Annual Financial Statement or books of account as derived from values declare in Tables 12A, 12B and 12C above will be auto- populated here.

Clause 12E

EITC claimed in Annual Return (GSTR-9)
Instruction of Clause 12E
Net ITC available for utilization as declared in Table 7J of Annual Return (GSTR 9) shall be declared here.

Ideally, the ITC as per annual return and books should match and in the event of difference the same needs to reconciled, with reasons as below.

Clause 12F

FUn-reconciled ITCITC 1
Instruction of Clause 12F
ClauseDescription of ClauseAction
12DITC availed as per audited Financial statement or books of account<12A + 12B – 12C>
12EITC claimed in Annual Return (GSTR 9)Report
12FUn-reconciled ITC< 12D -12E>

There can be various reasons for differences. The most obvious being ITC taken in return and then realizing the same is not allowable.

It is possible that reversal of not allowable ITC has not been done in the books of account as on 31-3-2019 as the ratio workings may have been undertaken post 31-3-2019.

There can be a situation that in the returns the ITC when reversed in March 19 becomes a negative figure and hence the liability is paid of  the short reversal. In  such cases, on the GSTN Portal to the extent of amount paid it shall be shown as normal liability whereas in the books, ITC reversed figured may not match with the portal figure.

The reasons for differences can be numerous and the auditor shall have to ascertain  the reasons from the auditee and verify the correctness or otherwise of the reasons provided for the differences.

Clause 13

13Reasons for un-reconciled difference in ITC
AReason 1<<Text>>
BReason 2<<Text>>
CReason 3<<Text>>
Instruction of clause 13
The reasons for non-reconciliation of ITC as per audited Annual financial Statement or books of account (Table 12D) and the net ITC (Table  12E) availed  in the Annual Return (GSTR 9) shall be specified in Clauses 13A, 13B and 13C.

Line items wise reasons may be granted for each of the difference, however it may not possible to always give specific reasons in all situations. Mere mistake adjustments   or wrong adjustments may also have caused the difference.

Clause 14

Reconciliation of ITC declared in annual return (GSTR-9) with ITC availed on expenses as per audited annual Financial statement or books of account.

DescriptionValueAmount of Total ITCAmount of eligible ITC availed
1234
Purchases   
Freight/Carriage   
Power and Fuel   
Imported goods (Including received from SEZs)   
Rent and Insurance   
Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples   
Royalties   
Employees’ Cost (Salaries, wages, Bonus etc.)   
Conveyance charges   
Bank Charges   
Entertainment charges   
Stationery Expenses (including postage etc.)   
Repair and Maintenance   
Other Miscellaneous expenses   
Capital goods   
Any other expense 1   
Any other expense 2   
Total amount of eligible ITC availed<<Auto>>
ITC claimed in Annual Return (GSTR-9) 
Un-reconciled ITCITC 2

NOTES

1.For FY 2017-18 and 2018-19, the registered person shall have an option to not fill this table.

The Act does not specifically require the taxpayer to bifurcate the ITC in to various accounting heads. Even though the bifurcation is asked head wise, the auditor will   have to extract the data from the Books as per the Acts i.e. IGST, CGST, SGST also.

The total ITC availed during the year has to be bifurcated on the basis of heads as above. The ITC availed, but the auditor feels not allowable shall not be included in column 4. In all other cases the total amount ITC and ITC availed would be same.

The purpose of above classification seems, to identify the disallowable ITC  from the nature of expense head. For e.g. the ITC pertaining to Entertainment charges/ Business Promotion etc. may be verified in depth to ascertain if the ITC is in furtherance of business or is of a personal nature.

The entire credit available to the entity needs to be segregated. This amount shall obviously be post reversal and hence exact amount relatable to exact head of expense may be an issue. Common Credit reversal may have a ratio on the basis of which reversal is done and hence from each head of common expenditure the auditor may not be able bifurcate.

Clause 15

15Reason for un-reconciled difference in ITC
aReason 1<< Text >>
bReason 2<< Text >>
cReason 3<< Text >>

NOTES

The ITC claimed in annual return and that as claimed as per clause 14 will be matched and the difference shall be treated as unreconciled leading to payment in case of excess claim and lapse of credit in case of excess. The reasons for the difference needs to be explained

Clause 16

16Tax payable on un-reconciled difference in ITC (due to reasons specified in 13 and 15 above)
 DescriptionAmount Payable
 Central Tax 
 State/UT Tax 
 Integrated Tax 
 Cess 
Interest
Penalty

NOTES

In the event the difference is not explainable, there shall be a liability to pay the tax and the same shall be reported as above, being the nature of tax payable i.e. CGST, SGST, IGST or Cess and consequential interest thereof.

You may also like: How to file GSTR 9A for Composition Taxpayers

Part B – Certification

Audit provisions are also provided under other Statutes like The Income Tax Act, The Companies Act, The Societies Act, The Indian Trust Act, etc. Therefore, in such cases,  the Accounts for such entities would have been audited and financial accounts are drawn accordingly. However, some entities, may not have their accounts audited; being not covered by the statutory provisions or otherwise. Therefore, there are two situations are provided in the Form GSTR 9C. Moreover, it is quite possible that the  GST Audit is carried out by the same Chartered Accountant who has conducted the audit under the other Statute:

1.Where the accounts of the entity is audited by the same Chartered Accountant who is to undertake the GST Audit and

2.Where the GST Audit undertaken by a Chartered Accountant other than the person who has carried out the audit of accounts of the entity.

The form has accordingly provided for two sets of certifications to cover both the situations discussed as above.

I. Certification in cases where the reconciliation statement (Form GSTR 9C) is drawn up by the person who had conducted the audit:

In this case, the GST Auditor is the same person [Chartered Accountant] who has carried out the audit of the Financial Accounts. Hence the certifications required are as under:

1.Examination of:

  • Balance sheet as on…
  • Profit and loss account for the year ending on…
  • Cash flow Statement (if available) for the period …… to ……..

2.Based on the Audit Report the said registered person—

  • has maintained the books of account, records and documents as required   by the IGST/CGST/SGST/UTGST Act, 2017 and the rules/notifications made/ issued thereunder.
  • *has not maintained the following accounts/records/documents as required by the IGST/CGST/SGST/UTGST Act, 2017 and the rules/notifications made/ issued thereunder:

3.(a) *I/we report the following observations/Notes /discrepancies/ inconsistencies; if any:

…………

Notes

In case where the Audit of the financial Accounts and the GSTR 9C certification [GST Audit] is done by the same person, the GST Auditors also certifies the Financial Accounts which he has otherwise also issued report under some other statute. Therefore, certification as per (1) above will not cause any difficulties. However, in  case of small enterprises, the ‘cash flow statement’ may not have been certified.

The reporting in respect of examination and maintenance of accounts/ records/ documents as required by the IGST/CGST/SGST/UTGST Act, 2017 and the rules/ notifications made/issued thereunder; may need careful consideration.

Finally, the GST Auditor is called upon to report about the observations / Notes/ discrepancies / inconsistencies; if any. This calls for the reporting in respect of not only observations and Notes but in respect of discrepancies and inconsistences regarding claim of exemption, classification, valuation, ITC etc. It may be noted that the cases, where the registered person/auditee has accepted the auditors findings    or recommendations, such issues would have been part of the reconciliation and   the reasons for the same would have been given in Part A of the Report at the respective places only. However, the issues, where the auditee do not accept the   GST Auditor’s stand may get reported here by way of qualification or inconsistency. Please note that the observations / Notes / discrepancies / inconsistencies which impact the opinion of the GST Auditor need only be reported here. Other issues may not be reported.

3(b)

*I/We further report that,—

  • *I/we have obtained all the information and explanations which, to the best   of *my/our knowledge and belief, were necessary for the purpose of the audit/information and explanations which, to the best of *my/our knowledge and belief, were necessary for the purpose of the audit were not provided/ partially provided to us.
  • In *my/our opinion, proper books of account *have/have not been kept by the registered person so far as appears from*my/ our examination of the books.
  • I/we certify that the balance sheet, the *profit and loss/income and expenditure account and the cash flow Statement (if available) are *in agreement/not in agreement with the books of account maintained at the Principal place of business at ……………………

and **     additional place of business within the State.

  • The documents required to be furnished under section 35(5) of the CGST Act/SGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act/SGST Act is annexed herewith in Form No. GSTR 9C.
  • In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the particulars given in the said Form No. GSTR 9C are true and fair subject to following observations/qualifications, if any:

(a) ………………………………………………………………………………………………………………….

(b) ………………………………………………………………………………………………………………….

(c) ………………………………………………………………………………………………………………….

……………………………………………………………………………………

……………………………………………………………………………………

**(Signature and stamp/Seal of the Auditor) Place: …………………………………

Name of the signatory …………………………………

Membership No. …………………………………

Date: …………………………………

Full address …………………………………

Notes

Reporting as per para 3(b) as per clauses (A), (B) & (C) do not require much discussion as these are the standard clauses statutory audit reports.

In Para 4, the GST Auditor reports that the documents required to be furnished under section 35(5) of the CGST Act/SGST Act and Reconciliation  Statement  required  to be furnished under section 44(2) of the CGST  Act/ SGST Act is annexed herewith   in Form No. GSTR 9C.

Finally, in Para 5, the GST Auditor expresses his opinion and states that the particulars given in the said Form No. GSTR 9C are true and fair subject to following observations/qualifications, if any. The ‘qualificatory remarks and disclaimer’ may be reported here. Please note that the qualification in the Auditor’s report requires him to quantify the same as well. Hence the turnover as the case may be, tax impact thereof be also quantified and reported here. It is quite possible that few of the remarks may get reported in paras 3 and 4 both.

The general observations not impacting the auditor’s opinion also should be reported here. E.g. in case of amalgamation of the company, accounts annexed to   the report may be of the amalgamated entity whereas the report pertains to the operations of the amalgamating entity. Such observations may be the ones which draws attention of the user of the Report.

Finally, the GST Auditor would sign and put his seal on the Audit report. It may be noted that the Auditor’s responsibility is to furnish the GST Audit Report and the Auditee has to upload on the GST Portal or file with GST Authority. The auditor is required to furnish printed copy duly signed and sealed to the auditee after the audit report is uploaded. Since this is an attestation function, this audit report would also require generation of UDIN as required by ICAI notification.

II.Certification in cases 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:

In this case, the GST Auditor is not the same person who has audited the Financial Accounts of the Auditee. Some other Chartered Accountant has audited the Financial Accounts. Hence, the GST Auditor relies on the audited accounted furnished/provided to him by the auditee for the purposes of the conduct of the GST Audit.

In the circumstances, the GST Auditor simply annexes the audited Balance sheet,   the profit and loss account and the Cash Flow Statement (if available) and other documents which are part of the Profit and loss account and the balance Sheet, as     the case may be.

In view of the above, the GST Auditor is called upon to give audit report only in respect of the maintenance of accounts, records and documents under the GST laws and the rules/notifications made/issued thereunder. Finally, in Para 4, the GST Auditor expresses his opinion and states that the particulars given in the said Form No. GSTR-   9C are true and fair subject to following observations/qualifications, if any.

The discussion in respect of these reporting requirement is not repeated here and are to be referred to as discussed herein above.

Few examples of observation and qualification to be disclosed in Clause 5 of certification:

1.Reconciliation and not assurance on overall compliance

In view of the press release issued by the Ministry of Finance, Govt. of India, the scope of the present Audit in respect to the reconciliation statement, is limited to reconciling the values declared in Annual Return [GSTR 9] with the audited accounts of the taxpayer. Clarifications issued vide Press Releases dated 4.6.2019 and 3.7.2019, as also Notification no 56/2019 have been relied upon    for the purpose of preparation, verification and reporting in the Reconciliation Statement.

2. Auditors Responsibility

1.Maintenance of the books of account, records as required under the IGST/CGST/SGST/UTGST Act, 2017 and the rules/notifications made/ issued thereunder and the financial statements are the responsibility of  the auditee. Our responsibility is to express a view on the correctness, completeness and accuracy of the returns filed by the auditee vis-à-vis the books of accounts in the reconciliation statement format of form GSTR 9C.

2.We have conducted our audit in accordance with the Standards on Auditing (SA) generally accepted in India. This standard require that we plan and perform the audit to obtain reasonable assurance about whether the said GST related accounts, records and statements are free of material misstatement. The audit includes examining, on a test check basis and the concept of materiality, evidence supporting the amounts and disclosures in this audit report.

We believe that our audit provides a reasonable basis for our opinion.

3.Auditee having Multi State Activity

1.As per the information and explanation given to us and on the basis of our examination of records of the auditee, auditee does not have an accounting system or software for preparing State wise trial balance. However, auditee maintains accounts in SAP/ERP software on all India bases and have common data base.Separate Outward and Inward registers are maintained by the auditee for  the transactions of Maharashtra State, on the basis of which the auditee regularly files GST returns and which is considered for GST Audit in the State.

2.As per the information and explanation given to us  and  on  the  basis of our examination of records of the auditee, auditee has accounting system   or software where by State wise trial balance is made available. The same  has been considered for the purpose of verification of this reconciliation in Form GSTR 9C.

4.Records Maintained

1.Refer Tax / Stat. Audit Report Note…. however, register of Outward supplies are made available which contains stock details. Inward supplies related stock records (including RCM cases) not maintained on a day to day basis. Further in case of inward supplies received quantity related records are not completely maintained.

The auditee has not produced records of Self-generated invoice and payment vouchers as applicable in case of inward supplies received from unregistered person, where RCM is applicable.

2.The tax /statutory report mentions as ‘Day to Day Stock Register has not been maintained. The Stock is taken as on the last day of the year.’ The tax payer, however, has maintained outwards register HSN wise. The inward supplies received quantity related records are not completely maintained.

The auditee has not produced records of Self-generated invoice and payment vouchers as applicable in case of inward supplies received from unregistered person, where RCM is applicable.

5.Reliance Placed

With respect to the details of turnover for the year, classification including applicable GST rate, reporting of Input tax credit and outward supplies in subsequent financial year along with its payment details and ITC reported in Table 12 we have relied on the information as provided by the auditee.

6.Unbilled Revenue at year end of financial year

As per the information and explanation given to us by the auditee, time of supply in case of unbilled revenue at year end is not triggered during the period of review.

7.Reporting of payment of interest

The disclosure of tax payable is as declared in Form GSTR-9. Further, the disclosure of interest in Form GSTR 9C is made based on the working made available by the auditee.

8.Compliance wrt Reversal u/r. 37

1.The auditee has paid interest upto the date of payment made to supplier   for all cases where ITC is reversed on account of payments not made to suppliers within 180 days from the date of invoice. We have accordingly reported the interest figures in Form GSTR 9C.

2.The auditee claims that the amount of ITC which is liable to be reversed under rule 37 is Nil. We  have relied on the same as relevant details were   not made available by the auditee.

3.Provision for section 16(2) of CGST Act, 2017 provides for reversal on ITC if payment to the vendor is not made within period of 180 days from date of invoice. Considering the volume we have verified this aspect on test check basis and did not found any material violation to this section.

9.Disclosure of various legal stands taken by Auditee

The auditee has taken various legal stands at the time filing of returns, where by the liability as well as the claims of ITC are made based on legal prepositions. Some prominent stands taken are as under:

  • Interest u/s 50 is calculated on Net liability basis following Madras HC decision in the case of Refex Industries Ltd. (WP 23360 & 23361 of 2019 dt. 06th January, 2020)
  • RCM on Ocean freight has been paid and ITC claimed, whereas as the Gujarat HC in the case of Mohit Minerals Ltd (Special civil application 726 of 2018 dt. 23rd January, 2020) it is held that GST is not liable to be paid on Ocean freight.
  • High Seas Supply has been considered as non-GST supply although amendment in law has happened from 1st February, 2019.
  • Other Income consist of Interest Income which is not considered for the purpose of this Reconciliation.
  • Rebates received from foreign parties in convertible foreign exchange pursuant to Imports made from them has been considered as not liable to GST.

Frequently Asked Questions(FAQ’s)

Who should file GSTR 9C? 

A taxpayer must get their annual reports audited under GST law if their annual aggregate turnover exceeds Rs. 2 crores within a financial year.But for FY 2018-19, the turnover limit is Rs.5 crores.

Role of CA or Cost Accountant in reconciling GSTR 9C?

There are apprehensions that the chartered accountant or cost accountant may go beyond the books of account in their recommendations under FORM GSTR-9C. The GST Act is clear in this regard. With respect to the reconciliation statement, their role is limited to reconciling the values declared in annual return (FORM GSTR-9) with the audited annual accounts of the taxpayer.

How do I sign my GSTR 9C offline utility?

Log in to GST portal → Annual return → Select Financial year and click on Search → Click on ‘Prepare Offline‘ option in GSTR9C tile → Go to ‘upload’ tab.

How do I download GSTR 9C offline utility?

You can download offline utility from GST portal.
1.Go to gst.gov.in
2.Select Downloads tab and from there,Download GSTR 9C Offline Utility.

Can GSTR 9C be revised?

There is no provision to revise the filed GSTR 9C.Please be careful while filing GSTR 9C.

How much is the penalty for late filing of GSTR 9C?

Currently, there is no specific provision for late filing of GSTR 9C.Hence, general penalty of Rs.25,000 will be applicable.

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