GSTR 9C is a statement of reconciliation between the annual returns in GSTR-9 filed for a financial year, first being 2017-18, and the figures as per audited annual financial statements of the taxpayer.
It is certified by the Chartered Accountant. It can be considered to be similar to that of our tax audit report furnished under the Income Tax Act.
It will consist of gross and taxable turnover as per the books reconciled with the respective figures as per the consolidation of all the GST returns for a financial year. Hence, any differences arising from the reconciliation exercise will be reported here along with the reasons for the same.
The certified statement shall be issued for every GSTIN. Hence, for a PAN there can be several reports of GSTR 9C.
Contents of GSTR 9C
GSTR 9C consists of two main parts:
Part A: Reconciliation statement
The figures in the audited financial statement are at the PAN level. Hence, the turnover, tax paid, and ITC earned on a particular GSTIN (or State/UT) must be pulled out from the audited accounts of the organization as a whole.
Reconciliation statement is divided into 5 parts which are as follows:
- Part 1
Basic details: Consists of the financial year, GSTIN, legal name, and trust name. The taxpayer must also mention if he is subject to audit under any other law.
- Part 2
Reconciliation: This involves reporting the gross and taxable turnover declared in the annual return with the audited financial statements. One must note that mostly the audited financial statement is at the PAN level. This might require the breakup of the audited financial statement at the GSTIN level for reporting in GSTR 9C.
- Part 3
Reconciliation of tax paid: This section requires a GST rate- wise report of the tax liability as per the accounts and paid as reported in the GSTR 9 respectively with the differences thereof. Further, it requires the taxpayers to state the additional library due to un-reconciled differences and notice upon reconsideration.
- Part 4
Reconciliation of tax input credit: This part consists of reconciliation of input tax credit availed and utilized by taxpayers as reported in GSTR 9 and as reported in the audited financial statement. For that, it needs a reporting of expenses book as per the audited accounts with the breakup of eligible and ineligible ITC and reconciliation of eligible ITC with the amount claimed as per GSTR 9. This declaration will be after considering the reversal of ITC claimed if any.
- Part 5
Auditor’s recommendation on additional libraries due to non-reconciliation: The Auditor must report any tax liability identified through the reconciliation exercise and GST audit, pending for payment by the taxpayer. This can be non-reconciled of turnover or ITC on amount of:
- Amount paid for supplies not included in the annual return.
- Erroneous refund to be paid back.
- Other outstanding demands to be settled.
Part B: Certification
The GSTR 9C can be certified by the same Chartered Accountant who conducted the GST audit or it can be also certified by any other Chartered Accountant who did not conduct the GST audit for the particular GSTIN.
The difference between the both is that in case the Chartered Accountant certifying the GSTR 9C did not conduct the GST audit, he must have based the opinion on the books of account audited by another Chartered Accountant in the reconciliation statement. The format of Part B for certification reports will vary depending on who the certifier is.