GSTR-9C is a reconciliation statement that businesses in India must file annually as part of their GST return (GSTR-9). It is a certification of the reconciliation between the data declared in the annual return (GSTR-9) and the books of accounts maintained by the taxpayer.
In addition to the GSTR-9C audit form, the taxpayer must complete the reconciliation statement and obtain certification from an auditor. It must be certified by a professional accountant and failure to file it can result in penalties.
GSTR-9C is a reconciliation statement that needs to be filed by businesses registered under the Goods and Services Tax (GST) in India. The company must have a turnover of more than Rs. 2 crores in the financial year for which the return is being filed. All businesses must file the GSTR-9 return and the reconciliation statement (GSTR-9C) annually, along with certification from a Chartered Accountant or a Cost Accountant.
GSTR-9C is important in the Goods and Services Tax (GST) system in India for several reasons:
In summary, GSTR-9C is an important aspect of the GST system in India as it promotes compliance, ensures the accuracy of data, enhances transparency, helps detect errors, and supports record-keeping.
There are two parts to registering for GSTR-9C:
Part A – Reconciliation Statement
Part A of GSTR-9C is further divided into 5 parts, as below:
Let’s discuss each part in detail
Part I – Basic Details
In this part of GSTR-9C, you need to input basic information like the financial year, your GSTIN, your legal and trade names, and whether or not you are liable to be audited under the provisions of any Act.
Part II – Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR-9)
This section is further subdivided into four sections:
Section 5 is where you need to input information pertaining to reconciliation of the gross turnover of your business. It requires the following information:
Section 6 is where you must enter the possible reasons for any unreconciled differences in the gross annual turnover of your business.
Section 7 is where you need to enter information pertaining to the reconciliation of taxable turnover. It requires the following information:
Section 8 is similar to Section 6, as here you need to enter the possible reasons for any unreconciled differences between the taxable turnover that you declared in your annual return and the one derived from Section 7, line E.
Part III – Reconciliation of Tax Paid
In Part 3 of GSTR 9C, you need to enter information about the taxes you have paid. Part 3 is further subdivided into 3 sections:
Section 9 is where you need to enter the taxable value, the central and state taxes, integrated taxes, and cess values applicable for each of the following tax rates:
For each of the above tax rates, the tax paid through reverse charge should be listed on a separate line from the tax that was collected as per the normal mechanism.
Section 10 is where you need to provide the possible reasons for any differences between the total tax amount you have paid as per your reconciliation statement and the total tax paid as was reported in your annual return (GSTR-9).
Section 11 is where you need to provide the details of any taxes that are due but have not yet been paid, as a result of the reasons mentioned above in Sections 6, 8, and 10.
Part IV – Reconciliation of Input Tax Credit
Part 4 of the form deals with reconciling Input Tax Credit (ITC). It is subdivided into 5 sections:
In Section 12, you need to provide information about the ITC availed in the following categories:
In Section 13, you need to enter the possible reasons for any differences that occur between the Input Tax Credit that you have claimed in your annual return, and that which you have claimed in your audited financial statements.
In Section 14, you need to enter the value for each category of expenses, the amount of total Input Tax Credit claimed for each category, and the amount of eligible Input Tax Credit that is availed for each category. The total amount of eligible ITC availed shall be calculated automatically based on the input numbers.
Section 15 lets you provide possible reasons for any difference between the total amount of ITC availed (Section 14, Line R), and the ITC availed as per your filed annual return (Section 14, Line S).
In Section 16, you need to enter the following information pertaining to any unreconciled differences as per Section 13 and Section 15:
Part V – Auditor’s recommendation on additional liability due to non-reconciliation
Part 5 of GSTR 9C is to be filled by the auditor. Here, they can provide any recommendations on any additional tax liability due to non-reconciliation. They need to enter the taxable value, central and state tax, integrated tax, and cess value (if applicable) for various categories, including the following individual tax rates:
Apart from the above, they need to enter the applicable input tax credit (ITC), interest, late fees, penalties, any other amounts that were paid but were not included in GSTR-9, any erroneous refunds that need to be paid back, and any outstanding demands that need to be settled.
To file GSTR-9C, you need to sign and authenticate the return either using a digital signature certificate (DSC) or through your Aadhaar-based signature.
Part B – Auditor Certification
Being auditor certified in GSTR-9C means that a Chartered Accountant or a Cost Accountant has reviewed and certified the reconciliation statement filed as part of the annual GSTR-9 return by a business registered under the Goods and Services Tax (GST) in India. The certification confirms the precision and completeness of the reconciliation between the data declared in the annual return (GSTR-9) and the books of accounts maintained by the taxpayer. The certification assures the Indian government that the reconciliation has been appropriately conducted and that the information declared in the return is accurate. Failure to obtain the certification can result in penalties and legal consequences.
The following documents are required for filing GSTR-9C:
These documents are needed to prepare the reconciliation statement which is a part of the GSTR-9C filing. The reconciliation statement compares the data declared in the GST returns with the books of accounts and ensures that the information declared is accurate and complete.
There are two ways to download GSTR-9C: online and offline.
Online Method:
Offline Method:
GSTR-9 and GSTR-9C must be filed annually together with a deadline of December 31st of the following financial year. For instance, the deadline for the financial year 2021-22 is December 31, 2022.
The consequences of non-filing of GSTR-9C in India can include:
Accurate reconciliation of data in GSTR-9C is important because it helps ensure the correctness and completeness of the information declared in the annual return (GSTR-9) and the books of accounts maintained by the taxpayer.
The reconciliation statement and certification by an auditor assure the Indian government that the data declared in the return is accurate and that the reconciliation has been appropriately conducted.
Inaccurate reconciliation can result in penalties and legal consequences, so it is important to ensure that the reconciliation statement is accurate and properly certified.
Here is a summary of GSTR-9C in bullet points: