Everything to know about GSTR 9C

If a registered person has an annual aggregate turnover of Rs 2 crore or more, then he/she is required to get his/her accounts audited by a Chartered Accountant or a Cost Accountant. This is the law, as per sub-section (5) of Section 35 of the CGST Act. A copy of the audited accounts, as well as a certified reconciliation statement, also needs to be submitted in Form GSTR-9C.It must be noted that, according to the latest changes from the financial year 20-21 onwards, the upper limit for GST audit and certification has been increased from Rs. 2 crore to Rs. 5 crore.Those taxpayers with an annual turnover of Rs. 2 crore are no longer required to compulsorily get an audit done. Moreover, the requirement for the audit to be done by a Chartered Accountant or Cost Accountant has also been removed. One can now file Form GSTR9C on a self-certification basis.

Before we look into GSTR-9C, let's first understand what reconciliation means in the taxation process.Reconciliation is the process of comparing filed returns against their respective accounts or registers in order to find and correct discrepancies. This is useful because it can bring forth any errors or omissions in the entries. Any tax that may be underpaid or paid in excess can also be found out using this process.In the case of GSTR-9C, it is a reconciliation between the following two data sets:

• The Annual GSTR-9 Returns filed for a particular Financial Year, and
• The numbers as per the audited annual Financial Statements of the taxpayer.

The GSTR-9C Reconciliation and Certification is similar to a tax audit report. First, the gross and taxable turnover is calculated from the taxpayers' books or accounts, and then the same is reconciled with the respective numbers in the consolidated GST returns of the financial year.Any discrepancies arising after the reconciliation shall be reported along with the reasons for the errors. A certified statement will also be issued for every GSTIN.

The GSTR-9C must be prepared and certified by a Chartered Accountant or a Cost Accountant. This law was in force until the Financial Year 20-21. From FY 20-21 onwards, this no longer needs to be done.The GST can be filed and self-certified by the taxpayer. It must be filed on the GST portal or, alternatively, through a facilitation centre by the concerned taxpayer. Documents like a copy of the Audited Accounts and Annual Returns in form GSTR-9 are also to be submitted during filing.The GST certificate is applicable to all those taxpayers who need to get their annual accounts audited according to the GST laws.As mentioned above, the GST Audit applies only to those registered persons with an annual turnover of Rs. 5 crore or more, according to the latest guidelines issued by the CBIC.The latest notifications also state that foreign companies in the airlines business and compliant with the rules and regulations of the Companies Act, 2013 are exempted from the GSTR-9C requirement.Additionally, individuals who are non-residents and are providing OIDAR services to unregistered persons in India are also exempted.

The due date for submission of GSTR-9C is the same as that for filing the Annual GST Returns. The GSTR-9C needs to be filed on or before the 31st of December of the year following the relevant Financial Year under Audit.Thus, for the financial year 20-21, the filing must be done by 31st December 2021. In some circumstances, the government may extend the deadline if it deems it necessary.

According to the GST law, the GST Reconciliation statement was to be prepared exclusively by a Chartered Accountant or a Cost Accountant. But recently, the new notifications from the CBIC state that this rule has been removed.The GST filing can now be done by self-certification. Differences between the Audited Accounts and the GST returns must be reported, along with the reason for the discrepancies.The GSTR-9C statement is important because it acts as proof for the GST authorities to verify the accuracy of the GST returns filed by the taxpayer.

There are two main partsin the GSTR-9C:

• Part A: Reconciliation Statement
• Part B: Certification.

Part A: Reconciliation Statement

Part A itself is divided into 5 parts as follows:

• Part-I: Basic Details
• Part-II: Turnover reconciliation declared in the Audited Annual Financial Statement with turnover declared in Annual Return (GSTR-9)
• Part-III: Reconciliation of tax paid
• Part-IV: Reconciliation of Input Tax Credit (ITC)
• Part-V: Auditor’s recommendation on additional liability due to non-reconciliation

Part B: Certification

It consists of the declaration by the auditor, their signature, stamp and seal.

The detailed format of GSTR-9C can be found on the official CBIC portal by clicking on the following link:https://www.cbic.gov.in/resources/htdocs-cbec/gst/notfctn-49-central-tax-english-new.pdf

The GSTR-9C has undergone some changes recently, and these changes are listed below:

• Verification of registered taxpayers:
• The new format now includes a section for the verification of registered taxpayers.
• Taxpayers now also need to file the GST returns for FY 2017-18 in GSTR-1, GSTR-3B and GSTR – 9.
• At the end of the GST return, taxpayers can pay any additional liability declared in this form through Form DRC-03. Taxpayers can select ’Reconciliation Statement’ in the Form DRC-03 drop-down. It is important to note that such liability shall be paid through electronic cash ledger only.

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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.