The main purpose of Management Representation Letter on various matters is to focus the management’s attention on those matters so that the management can specifically address those matters in more detail than would otherwise be the case.
However the Auditor needs to understand the limitations of management representations as audit evidence. Getting a Management Representation Letter does not absolve the auditor of its responsibilities. He has to exercise professional care in conducting the audit.
Given below is a sample Management Representation Letter for GST Audit. It is not intended to be a standard letter. Representations by management will vary from one entity to another and from one period to the next. In case you need editable word file, you may e mail me on “email@example.com” with subject “MRL”
<On the letter head of the company>
Sub: Management Representation Letter
This representation letter is provided in connection with your audit of the financial statements and attest function of GSTR 9C of _________Company for the year ended March 31, 2018 as required under the provisions of section 35(5) and section 44(2) of the Goods And Service Tax Act, 2017 (In short “GST Act”) read with rule 80(3) of the Goods and Service Tax Rules (In short “GST Rules, 2017”)
We acknowledge our responsibility for the fair presentation of the financial statements in accordance with (indicate applicable financial reporting framework).
We confirm, to the best of our knowledge and belief, the following representations:
1. Audited Financial Statements (in case where done by another auditor):
a. We have enclosed a copy of the audited financial statements
b.The accounting policies followed by the company are provided in the notes to accounts to the audited financial statements
2. Branch wise trial balance:
Branch wise attested trail balance is provided in Annexure I
a. Management has duly registered every place of business within the State and are listed in the registration certificate
b. The following are the list of various place of business within the state:
4. Advance Ruling:
a. During the year, three applications have been filed for Advance Ruling in the state and the following is the status of each:
b. We confirm that we have duly applied the Advance Ruling received (and not disputed) to all the transactions as envisaged in the order unless appeal is filed.
a.We confirm that we have correctly classified into goods / services as per Schedule II of the CGST Act.
b. We have applied applicable notifications and advance rulings and identified the HSN for the various supplies made by us.
c. A List of the various supplies along with HSN and rate of GST adopted is enclosed in Annexure IV
6. Outward Supply:
a. All the supplies made during the year have been properly recorded in the books of accounts.
b. All supplies made have been valued as per Section 15 of the CGST Act and Rules made there under.
c. We have proper mechanism in place to comply with the provisions of time of supply as provided in Section 12 and Section 13 of the CGST Act.
d. All the supplies made by us have been properly classified in to interstate and intra state; B2B and B2C and properly recorded.
e. GST has been paid on sale of assets if any.
f. We understand the implications of Schedule III of the CGST Act (supply without consideration). We have adequate mechanisms in place to identity and value such deemed supplies as per the Act and Rules made there under.
g. In respect of export of goods, export of services, deemed exports, SEZ supplies we have satisfied the conditions specified in the Act and Notifications.
h. All the supplies have been declared in the returns and taxes are duly collected and paid.
7. Inward Supply:
a. All inward supplies have been properly classified into intra-State, inter-State inward supplies or imports.
b. All inward supplies have been properly classified into Capital goods, Inputs and Input Services.
c. We have declared all the inward supplies in our books of account and duly filed in the GST returns.
d. We have paid GST under reverse charge mechanism as provided on all unregistered inward supplies until 12th October 2017
e. We have paid GST under reverse charge mechanism as provided in Section 5(3) of the IGST Act and Section 9(3) of the CGST Act and notifications made there under.
f. The HSN details as recorded in the books of accounts are true and correct to our knowledge.
8. Input Tax Credit (ITC):
a. We have satisfied all the conditions of Section 16 of the CGST Act in respect of ITC, i.e.All goods/services are used in the course / furtherance of business.
b. We have properly classified the ITC into CGST / SGST and IGST. Wherever wrongly classified we have made the corrections.
c. We have done reversals as provided in Section 17 of the CGST Act for the following:
d. In respect of Transitional Credits availed by us, we provide the below:
a. A list of the refund applications made and their status is provided in Annexure VII
b. We confirm that we have filed refund application only for claims that are eligible and upon satisfaction of the conditions of Chapter XI of the CGST Act.
a. In respect of job work we have satisfied all the conditions of Section 19, Section 143 of the Act.
b. We have filed form ITC 04.
c. As at the year end the stock lying with job worker and their status as on date are provided in Annexure VIII
d. If goods are not received within time specified in the Act, GST has been paid.
11. Filing of GST Returns:
a. We have filed all the returns (GSTR 1, GSTR 3B, GSTR 9, ITC 04, ITC 01……….) as applicable to us within due date except the delays as reported in Annexure IX
b. On filing of returns after due dates, we have paid the applicable interest as provided in Annexure X
c. We are aware of the decision by the Telangana High Court that interest is to be remitted on gross tax liability before adjustment of ITC, however we have paid interest on ____________tax liability (Gross / net).
12. Accounts and Records:
a. We have issued the Tax Invoices / Bill of Supply / E-way bill /Delivery note as per the provisions of the GST Act.
b. We have raised self invoice in case of payment of tax under reverse charge mechanism.
c. We have maintained proper accounts and records as provided in Chapter VIII of the Act , viz., records of
d. We have maintained the records in hard copy / soft copy at every place of business.
13. Reconciliation Statement in Form 9C
a. We have adequate procedures for reconciliation of GST returns with books of accounts periodically.
b. We have enclosed the reconciliation statement in form 9C for your reference.
Partner / Proprietor / Director / Authorized Signatory