GSTR-9C form for taxpayer above Rs 2 crore turnover

The Government has notified the GSTR-9C form for annual GST audit under which every taxpayer above Rs 2 crore turnover in a financial year would need to fill up a reconciliation statement and also obtain a certification of audit.

The Government through the notification No. 49/2018 – Central tax has notified the format for GSTR-9C.

Under GST, annual return is to be furnished in GSTR-9. In addition, as per Section 35 of CGST Act, 2017, every tax payer whose turnover exceeds Rs 2 crore during a financial year, is required to submit audited annual accounts and a reconciliation statement in GSTR-9C.

GSTR-9 C clearly states that it is essentially a reconciliation statement for reconciling turnover, input tax credits and tax payments reported in GST returns (annual return) vis-a-vis annual books of accounts.

GSTR-9 C is broadly segregated into four categories- Gross turnover (including taxable and non-taxable turnovers), Taxable turnover, Tax liability and payments (rate-wise) and Input tax credit availment.

The reconciliation is to be accompanied with certification from the auditor (can be statutory auditor as well).

Further, there is a separate table for auditor’s recommendation on additional liability to be discharged on account of non-reconciliation of turnover and input tax credit. The auditor may also recommend on erroneous refunds, outstanding demands etc.

There is a separate table for disclosing additional amount payable on account of un-reconciled amount as per Sr. No. 1, 2, 3 and 4. Taxpayers should note that it appears that the said amount is to be paid in cash (and not credit).

The format prescribes indicative sub-heads under which the expenses are generally booked in the financials (like freight, purchases, imports, employee cost, repair & maintenance, capital goods etc.).

Tax payer may add/ delete the sub-head as per relevancy and against these sub-heads, the amount of input tax credit as reported in financials is to be reconciled with annual return. However, this is a new requirement and could be challenging for most taxpayers.

2 different certifications has been prescribed by the Government as part of GST Audit Format – one where reconciliation statement is drawn and audited by statutory audit and the other wherein it is drawn and audited by a person other than statutory auditor.

We will have to see in near future if the auditors will be able to grasp the prescribed language for certifications and if any changes in the language would be allowed while certifying the reconciliation statement. Part B provides format of the certification for better understanding.

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