- Its a new audit form where taxpayers with a turnover of more than 2 crores are required to file it annually, and a CA must certify it.
- In essence, it serves as a statement of reconciliation between the taxpayer’s audited yearly financial accounts and the annual returns filed in GSTR-9.
Importance of GSTR 9C
A Chartered Accountant or Cost Accountant must write this GST Reconciliation Statement. Any discrepancies between the data given in all GST forms and the audited accounts would be noted by the CA along with the explanations for the discrepancies. The GST authorities would use this defence as the foundation for their inspection of the veracity of the taxpayers’ GST returns. This is so that the CA can account for any potential obligation arising from the GST audit and reconciliation activity in GSTR-9C.
Who needs to submit GSTR 9C?
- GSTR9C must be filed by every taxpayer who is eligible to have their yearly reports
- If a taxpayer’s yearly aggregate turnover reaches Rs. 2 crores during a financial year, the taxpayer is required by law to have their annual reports
How to Online File GSTR 9C?
GSTR 9C is divided into two sections, A and B. The reconciliation statement is found in Part A, and the certification of the reconciliation statement is found in Part B.
1. Statement of Reconciliation in Part A
This section is filled with data from an organization’s audited accounts regarding revenue, taxes paid, and input tax credits earned for a certain GSTIN. The following subsections are further separated into the GSTR 9C form’s statement of reconciliation:
Section I
The taxpayer must fill out some essential information in this part, including their GSTIN, financial year, and legal and business names. Additionally, the taxpayer must identify any audit laws to which they may be subject.
Section II
The audited financial statements and the total turnover, both taxable and gross, as reported in the GSTR 9 must be entered. This will need reporting on GSTR 9C of a detailed segregation of the Audited Financial Statements (AFS) at the GSTIN level.
Section III
Both the actual tax paid as reported on the GSTR-9 that the company submitted, as well as the GST liability broken down by slab, must be provided in this part.
Any discrepancies between the two values must also be noted in this area, and taxpayers are responsible for disclosing any additional tax obligations brought on by such unreconciled discrepancies.
Section IV
This section includes the reconciliation of the taxpayers’ net ITC (Input Tax Credit) claims and usage as reported in GSTR 9 and the AFS (Audited Financial Statements). For FY 2020–21, the information on tables 12B, 12C, and 14 was made optional, and the taxpayer might elect not to fill them out:
Table 14 provides a detailed breakdown of the ITC as reported in GSTR 9 and the ITC claimed on costs as reported by AFS or account books.
12C: ITC recorded in the current fiscal year that will be recouped in subsequent fiscal years. 12B – ITC claimed in the current fiscal year that was recorded in prior fiscal years.
Section V
The auditor must disclose any unpaid taxes that were discovered throughout the GST audit and reconciliation procedure under this section.
This tax liability may result from the ITC or turnover not being reconciled, depending on:
- Amount spent on supplies but not recorded in the GSTR
- Refund that was started incorrectly and must be cancelled
- Any other obligations that haven’t been paid but need to
- Finally, the GSTR 9C format gives taxpayers the opportunity to pay back any unpaid taxes as advised by the auditor once the reconciliation statement has been
2. Certification in Part B
The CA who conducted the GST audit or any other CA who was not involved in the GST audit may certify the GSTR 9C for a specific GSTIN following the reconciliation procedure.
If a CA certifies financial information without conducting the audit, they must have formed their judgement based on the reconciliation statement’s account books audited by the CA.
Deadline
- According to the guidelines provided by the GST authorities, GSTR 9C must be submitted no later than December 31 of the following
Penalty
- The taxpayer must pay a late fee of 200 per day (100 under CGST and SGST) as a penalty if the GSTR 9C is not filed by the deadline and is subject to the penalty provision of the GSTR 9C audit report
- The maximum fine cannot be greater than 5% of the total turnover being assessed.