GSTR 9C

5paisa Research Team Date: 26 Apr, 2023 04:59 PM IST

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Introduction

In India, there are two categories of taxes – direct and indirect. The government levies direct taxes on the income earned, whereas purchasing and selling goods and services involves indirect taxes. The government mandates specific compliance requirements to corroborate the tax liability from different tax systems. 

GSTR 9C is a reconciliation between GSTR annual returns and figures based on taxpayers' audited annual financial reports for a fiscal year. 
 

What is GSTR 9c?

The Government of India introduced GSTR 9C on 13th September 2018.  GSTR9C is an audit form for taxpayers similar to a tax audit report. It includes gross and taxable turnover. Typically, taxpayers mandated to have their annual income returns audited must also file Form GSTR 9C.

The Goods and Service Tax law requires entities with an annual turnover exceeding Rs. 2 crores in a fiscal year to get their yearly reports audited. Besides GSTR 9C applicability, taxpayers must complete a reconciliation statement and an audit certification. The due date for submitting GSTR 9C is before 31st December of the year following the assessment year.
 

GSTR 9C Format

The GSTR 9C format contains two primary components – Part A and Part B. 

Part-A – Reconciliation Statement 

Part A includes basic tax information and is further subdivided into five parts.

1.    Basic Details – Basic details contain four broad sections, namely –

●    Fiscal year
●    GSTIN of taxpayers
●    Trade name of the business
●    Registered person's legal name
●    Taxpayer's liability for audit

2.    Turnover Reconciliation 
It includes reconciling turnover declared in the entity's audited Annual Financial Statement and GSTR 9 or Annual Return.

3.    Tax Reconciliation 
It contains details of the reconciliation of the rate-wise outstanding amount and liability.

4.    Input Tax Credit Reconciliation 
This part reconciles the amount of input tax credit declared in the Annual Return with the net input tax credit in the financial statements. 

5.    Additional Liability
This section refers to additional liability in case of non-reconciliation, which are the auditor's suggestions for those other liabilities due to non-reconciliation of turnover or input tax credit. 

Part-B – Auditor Certification

Part B refers to a declaration from the chartered accountant at the final stage of the GSTR 9 audit. It has two major components, namely – 

a.    Certification, where the Form has been drawn by those who had carried out the audit
b.    Based on the audit mentioned by the entrusted auditor

How to file GSTR 9c: Preparation and Submission of GSTR 9C

A cost accountant or a chartered accountant prepares and submits GSTR 9C. Taxpayers may file it on a GST portal or through a facilitation centre. It is in addition to the GSTR and filed at or after the same time. 

In addition to GSTR 9C, taxpayers must also furnish a set of documents that serve as audited financial documents. For example, the balance sheet, profit and loss statement, cash flow statement, income and expenditure account, or other prescribed financial records.
 

Importance of GSTR 9C

GSTR 9C is an essential document to reconcile the financial statements with the GST returns filed by a business. It is certified by a chartered accountant or a cost accountant, ensuring that the GST returns filed by the company are accurate and reconciled with the financial statements.

Filing GSTR 9C is crucial because it helps businesses avoid discrepancies in their GST returns and financial statements, which could result in penalties and interest. It also allows firms to identify any errors or omissions in their GST returns and rectify them before filing them. 

GSTR 9C applicability helps businesses maintain accurate records, which is essential for the business's overall health. Additionally, GSTR 9C applicability provides transparency and accountability in the GST system, helping to build trust between firms and the government.
 

How to Download GSTR 9C?

The distinguishing factor of GST is that it adopts technology more than any other tax law. You can execute GSTR 9c online filing from the GST portal online or use an offline tool. 

On the online GST portal:

a.    Visit the GST portal and log in with your credentials.
b.    Click on the 'Services' section and select 'Returns.'
c.    Choose the financial year and the corresponding return filing period.
d.    Click on the 'Search' button to retrieve the details of the GSTR 9C return.
e.    Click the 'Download' button to download the Return in PDF format.
f.    Choose 'Initiate E-filing.' 
 

With the help of an offline tool:

a.    Visit the GST portal and log in with your credentials. 
b.    Select the 'Downloads' option. Go to 'Offline Tools' and navigate to GSTR-9C Offline Tool.
c.    Download the latest version of the offline tool from the GST portal.
d.    Click on the download link and choose 'Proceed' when a confirmation pops up. 
e.    Install and run the tool on your system.
f.    GSTR 9C will be available in zip format. Extract the file and click 'Enable Content' and 'Enable Editing.'     
g.    Enter your GSTIN and select the financial year you want to file the Return.
h.    Click the 'Prepare Offline' button to start preparing the Return offline. Fill out basic details such as trade name, GSTIN, fiscal year, legal name, and Act.
i.    Once you have prepared the Return, click the 'Generate JSON file' button to create a JSON file.
j.    Go to the GST portal and upload the JSON file to complete the return filing process.

 

Documents Required

To file GSTR 9C, you will need the following documents.

●    GSTR 9 and audited financial statements for the relevant financial year.
●    Cash flow statement and Annual Report for the relevant financial year. 
●    Details of any additional liability ascertained during the GST audit, if applicable.
●    Reconciliation statement duly verified by a chartered accountant or a cost accountant.
 

GSTR 9 Filing – Implications of Missing the GST Audit Due Date

If a taxpayer misses the due date for filing GSTR 9, it can have several implications. Delaying the filing of GSTR 9 can result in a significant penalty. If any tax liability arises due to the delay in filing GSTR 9, the taxpayer will have to pay interest at the rate of 18% per annum from the due date of filing until the date of actual payment.

The taxpayer may even lose the opportunity to claim any unclaimed input tax credit (ITC) for the relevant financial year. The taxpayer may also be required to pay back any ITC wrongly claimed in previous returns.
 

GSTR 9C Late Fees and Penalty

Failure to file GSTR 9C by the due date attracts a late fee of Rs. 200 per day (Rs. 100 per day for CGST and Rs. 100 per day for SGST). However, the total penalty is subject to a maximum of 0.50% of the business's turnover. The business may also be liable to pay the penalty and interest on the additional liability if there are any discrepancies in the GST audit.

The difference between GSTR-9 and GSTR-9C

GSTR-9 and GSTR-9C are both annual returns that need to be filed by registered taxpayers. 

GSTR-9 is a self-declaration form that provides a consolidated summary of all the transactions declared in the monthly/quarterly returns filed during a financial year. It includes details of inward and outward supplies, input tax credit (ITC), and taxes paid. 

GSTR-9C is a reconciliation statement certified by a Chartered Accountant or Cost Accountant. It involves a comprehensive reconciliation of the data provided in GSTR-9 with the audited annual financial statements of the taxpayer. 

The major differences between GSTR-9 and GSTR-9C are as below.
 

Particulars

GSTR-9

GSTR-9C

Type of Return

GSTR-9 is a self-declaration form summarising all the transactions declared in monthly/quarterly returns.

GSTR-9C is a reconciliation statement that ensures the accuracy and consistency of data reported in GSTR-9 with the audited financial statements.

Certification

There is no need for any certification for GSTR-9.

GSTR-9C requires certification from a Chartered Accountant or Cost Accountant.

 

Regulation

Section 35(5) under Section 44 of the GST Act prescribes GSTR-9.

Rule 80 under Section 44 of the CGST Act refers to GSTR-9C.

Scope

GSTR-9 provides a consolidated summary of all the transactions declared in monthly/quarterly returns.

GSTR-9C reconciles the data provided in GSTR-9 with the audited financial statements.

Contents

GSTR-9 contains details of inward and outward supplies, input tax credit (ITC), taxes paid, additional liability, and adjustments.

GSTR-9C contains a reconciliation of taxable supplies and tax paid in GSTR-9 with audited financial statements.

Objective

The primary objective of GSTR-9 is to summarise all transactions during the financial year.

The primary objective of GSTR-9C is to ensure the accuracy and consistency of the data reported in GSTR-9.

Deadline

GSTR-9 must be filed by 31st December of the subsequent financial year.

GSTR-9C must be filed along with GSTR-9 by 31st December of the subsequent financial year.

Penalty for Late Filing

In case of late filing of GSTR-9, a fee of Rs. 200 per day of delay is levied, subject to a maximum of 0.50% of the taxpayer's turnover for the relevant financial year.

No specified penalty for late filing of GSTR-9C.

Frequency of Filing

The frequency of filing for GSTR-9 is once a year.

A taxpayer must file GSTR-9C with GSTR-9 once a year.

Exclusions

GSTR-9 does not apply to the following taxpayers –

  • Casual taxable individuals
  • Composition dealers
  • Input service distributors
  • Non-resident individuals
  • Online information and database access,  retrieval service providers
  • Individuals with unique identification numbers.

GSTR-9C does not apply to registered entities with a turnover of up to Rs. 2 crores in a financial year even though it is under GSTR 9.

Annexures

GSTR-9 does not require any annexures.

The taxpayer must upload an audited profit and loss statement and a balance sheet.

Digital Signature

Taxpayers must attach their digital signatures.

Auditors and taxpayers must both attach their digital signatures.

Return Filing

You can file GSTR-9 through a facilitation centre or the GST portal.

One can file it through the facilitation centre or on the GST portal when filing GSTR 9 or after it.

 

 

Conclusion

GSTR-9C ensures the accuracy and consistency of the data reported in GSTR-9 with the audited financial statements. It helps identify any discrepancies or errors in the GST returns, providing an opportunity for rectification before the deadline. GSTR-9C certification adds credibility to the financial statements and reassures stakeholders of the accuracy and completeness of the information provided.

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