GSTR 9 is the reconciliation statement that checks the automated and audited annual turnover. The taxpayer submits the GSTR–9C form. The submission is for a self-certification of tax liability. If there is additional liability, the taxpayer uses FORM DRC-03 to pay it. The latest updates with the GSTR-9c form are in this blog. A chartered accountant or cost accountant must certify the GSTR-9c form of the taxpayer. The blog emphasizes the statutory responsibilities of an auditor.
Sections of GSTR-9C:
GSTR-9C is a PAN-based one. The company with registration and PAN details in the state of operation should file the form GSTR-9C. Every registration in the state must prepare the GSTR-9C form. GSTR 9 is the return, and GSTR-9C is the reconciliation statement. The GSTR-9C form has fifteen tables. As the GSTR 9C form is for taxpayers with a turnover of more than or equal to two crores, it has an audit report. The audit report has to be certified by a professional CA or CMA. The Indian government released the form in 2018. The small taxpayers with an aggregate yearly turnover of two crore in the financial year 2022 to 2023 can avail exemption to GSTR-9/9A. The threshold limit of two crore is the sum of the turnover of all the branches. The turnover is not the calculation of a single branch.
The following points explain the different tables in the GSTR-9C form:
- The statement has two parts. The reconciliation statement is presented in part A. The certification from a chartered or cost accountant is in the part B section.
- The changes with GTSR-9c are as follows: Table 5B to 5N, table 12B and 12C and table 14. The cash flow statement is attached based on the availability. The GSTR-9 and 9C enhance transparency in the GST system.
- The due date of GSTR 9c falls on 31st December of the financial year. The financial year ends after the audited year. The accounting or audited year is between April to March. The financial year ends with December month after the March month.
- The taxpayer should prepare the annual financial statements before filing GSTR 9C. The required statements are the balance sheet, income and expenditure account, profit and loss account and cash flow statement.
- The financial statement should be in the light of various laws. The financial results are gauged according to the income tax, GST and Companies Act.
- Part one of Part A asks for basic details such as GSTIN, FY, trade name, and legal name. The reference to the applicability of other acts should be given here.
- Part two consists of reconciliation details.
- Table five consists of the details of gross turnover. Gross turnover consists of details of taxable and non-taxable turnover.
- Table six consists of the details of unreconciled differences with the annual gross turnover.
- Table seven consists of details of taxable turnover.
- Table eight talks about the reasons for the difference in the taxable turnover.
- The turnover and tax payment have different rates. Table nine talks about the reconciliation of rates. The table requires the details of tax payment and tax liability.
- Table ten is the reason for the un-reconciled payment.
- The difference in the tax liability due to the differences with tables six, eight and ten is mentioned in table eleven.
- Table twelve is the calculation of un-reconciled ITC.
- Table 13 talks about the reasons for the un-reconciled ITC.
- Table fourteen is about the credits given to the taxpayer in various categories. The details of credits availed for expenses in the books of accounts are mentioned in the GSTR-9.
- The difference between the credits mentioned in the books of accounts and GSTR-9 is calculated in Table 15.
- Table sixteen provides the details of tax payments on unreconciled differences with ITC. The auditor commented on the differences in ITC.
- Part B is the certification from a chartered accountant or cost accountant. Format one is for the auditor. Format two is for an ordinary person other than the auditor. In some cases, the auditor prepares the reconciliation statement. In some cases, it is prepared by the other professionals.
- The GSTR-9c has auto-populated fields from GSTR-9. The turnover, liability, tax payment and input tax credit are generated from the previous form.
Why chartered or cost accountants prepare the reconciliation statement?
The auditor must sign the GSTR-9c with a digital signature. The auditor should report the liabilities of the taxpayer with self-certification. Taxpayers with a turnover of more than five crore should file GSTR-9C. The GST audit is of three types. The turnover-based audit, general audit and special audit. The special audits are conducted after an order from the assistant or deputy commissioner. The general audit is prepared after an order from the commissioner. Turnover-based audit is for the taxpayer with a turnover of above two crores. In India, it is mandatory to get the books of accounts audited by a chartered or cost accountant. The GSTR-9C is prepared either by the GST auditor or by an external auditor. The auditor should certify the documents, place of business, and information and provide audit observations. The internal auditor is not supposed to conduct the GST audit. Internal auditors and GST auditors are separate persons. GST auditor checks documents such as sales register, purchase register, stock register, input tax credit, output tax payable, e-way bills, e-invoices, and correspondence with the GST department. A GST practitioner cannot issue the audit report. GST Act says that GST practitioners cannot be an auditor. The roles and responsibilities of an auditor, GST practitioner and internal auditor are different. A chartered accountant should choose his place of work.
If the taxpayer fails to file an annual return and GSTR-9C, he gets a penalty of 200 per day for the default period. The taxpayer also gets a general penalty of 25,000 for non-submission of GSTR-9 and 9C forms. The statutory responsibilities of a professional require constant practice and observation of changes in the tax system. Chartered accountants work in internal, external and official roles to execute the Indian tax rules.