Fundamentally, GSTR 9C is a reconciliation statement between GSTR annual returns of a fiscal year and figures based on taxpayers’ audited annual financial report. It was introduced on 13th September 2018. To understand the significance of filing GSTR 9C, it is imperative to find out more about this tax provision.
What is GSTR 9C?
GSTR 9C is an audit form for taxpayers that is similar to a tax audit report. It includes gross and taxable turnover. Ideally, taxpayers who are liable to get their annual income returns audited have to file Form GSTR 9C.
As per GST law, entities with an annual turnover of more than Rs. 2 crore in a fiscal year has to get their yearly reports audited. Besides GSTR 9C, audit form taxpayers also have to fill a reconciliation statement in addition to an audit certification.
Generally, GSTR 9C has to be filed either on or before 31st December of the following assessment year. For instance, for the fiscal year 2018-2019, taxpayers have to file GSTR 9C on 31st December 2020.
GSTR 9C Format
GSTR 9C comprises two main parts –
- Part-A – Reconciliation Statement
It contains tax information. It is further subdivided into 5 parts –
Part 1 – Basic details
This part is further subdivided into 4 broad sections, namely –
- Fiscal year
- GSTIN of taxpayers
- Registered person’s legal name and the business’s trade name.
- Whether the taxpayer is liable for audit.
Part 2 – Reconciliation of turnover
It contains the reconciliation of turnover that is declared in the entity’s audited Annual Financial Statement, and the turnover declared in GSTR 9 or Annual Return.
Part 3 – Reconciliation of taxes paid
The said part contains details of reconciliation of the rate-wise outstanding amount and liability.
Part 4 – Reconciliation of Input Tax Credits
This part accounts for the reconciliation of the net Input Tax Credit as per the accounting books, and the amount of ITC declared in the Annual Return.
Part 5 – Additional liability due to non-reconciliation
It includes the auditor’s recommendations on those additional liabilities that have to be discharged by taxpayers due to non-reconciliation of ITC or turnover.
- Part-B – Auditor Certification
It is essentially a certificate that has to be filed by a chartered accountant. Notably, this part is completed only after the GSTR 9 audit. It has two major components, namely –
- Certification where Form GSTR 9C has been drawn by those who had carried out the audit.
- On the basis of the audit mentioned by the entrusted auditor.
Preparation and Submission of GSTR 9C
GSTR 9C is prepared and certified by a Cost Accountant or a Chartered Accountant. Taxpayers can either file it either through a facilitation centre or on a GST portal. It has to be filed in addition to the GSTR, either after or at the same time.
Taxpayers also need to submit a set of documents that serve as audited financial documents along with GSTR 9C. For instance, they have to submit – balance sheet, cash flow statement, profit and loss or income and expenditure account or other prescribed financial records.
Significance of GSTR 9C
Typically, taxpayers with a total turnover of more than Rs. 2 crore have to file GSTR 9C. This reconciliation certificate has to be signed by the GST auditor digitally and must emphasise on the liabilities or discrepancies noticed in any GST returns filed in a given fiscal year.
One must note that the liabilities arising due to GST audit and reconciliation exercise has to be reported and certified in GSTR 9C by a CA. GSTR 9C serves as the only yardstick or an effective indicator for the authorities to gauge the accuracy of GST returns filed by taxpayers in a given fiscal year.
How to Download GSTR 9C?
- On the online portal
These steps highlight how to download GSTR 9C online –
Step 1 – Visit the GST portal.
Step 2 – Login with the help of credentials like username and password.
Step 3 – Look for the ‘Annual Return’ tab on the dashboard and click on it.
Step 4 – Click on the fiscal year to select the relevant assessment year.
Step 5 – Click on the option ‘Initiate e-filing’.
However, one must note that when the said option is clicked, the user will be directed to file the GSTR 9 Form before proceeding to file the reconciliation form.
- With the help of an offline tool
By following these steps, one can download GSTR 9C Form easily –
Step 1 – Visit the GST portal.
Step 2 – Navigate to the ‘Downloads’ option.
Step 3 – Go to ‘Offline Tools’ and navigate to GSTR-9C Offline Tool.
Step 4 – When directed to the GSTR-9C offline page, click on the ‘Download’ link.
Step 5 – Click on the ‘Proceed’ option when a confirmation option pops up.
Step 6 – Once the GSTR 9C offline utility is downloaded in zip format, proceed to extract the file.
Step 7 – Click on the ‘Enable Editing’ option.
Step 8 – Click on ‘Enable Content’.
Step 9 – Navigate to the ‘Read Me’ tab.
Step 10 – Navigate to the ‘Home’ page to fill in the basic details like – GSTIN, fiscal year, trade name, legal name and Act.
Step 11 – When a question confirming your choice pops up on the screen – choose either ‘Yes’ or ‘No’.
Once these steps are complete, users have to save the data before closing this utility tool.
GSTR 9 Filing – Implications of Missing the Due Date
Taxpayers who are liable to file GSTR 9 but tend to miss the last date are subject to penalty. As per norms, delaying GSTR 9C filing attracts Rs. 200 each day as penalty. Notably, the Rs. 200 fine includes Rs. 100 as SGST and Rs. 100 as CGST. However, one must remember that the aggregate penalty at any time cannot be more than 0.50% of the aggregate turnover on which the penalty is being imposed in the first place.
Difference between GSTR-9 and GSTR-9C
Often taxpayers have to choose between GSTR 9 and GSTR 9C. As a result, it gives rise to several doubts and inaccuracies when it comes to filing GST.
To avoid it, individuals need to find out about the differences between GSTR 9C and GSTR 9 and streamline their goods and service tax return filing correctly. This table offers a valuable insight into the fundamental parameters that set GSTR 9 apart from GSTR 9C –
|Parameters||GSTR 9C Reconciliation Statement||GSTR 9 Annual Return|
|Nature||It is a reconciliation statement that is an analytical statement on GST returns.||It is an annual return, and essentially a consolidation of all GST returns.|
|GST Act||GSTR 9C is prescribed in Section 35(5) under Section 44 of the GST Act.||It is prescribed in Rule 80 under Section 44 of the CGST Act.|
|Who files it?||GST registered taxpayers who are liable to audit their report.||GST registered taxpayers.|
|Exclusions||It does not apply to registered entities that come under the purview of GSTR 9 but with an annual turnover of less than Rs. 2 crore.||GSTR 9 does not apply to –
|Due date||31st December of the next fiscal year, either with GSTR 9 filing or after it.||31st December of the following fiscal year.|
|Penalty||Since there is no such specific provision, it is subject to a general penalty of Rs. 25000.||It attracts a late fee of Rs. 200 each day of delay and is also subject to a maximum ceiling of 0.25% of aggregate turnover (States/Union Territories)|
|Returns Filing||One can file it either through the facilitation centre or on the GST portal either when filing GSTR 9 or after it.||Either through a facilitation centre or GST portal.|
|GSTR 9C Format||Comprises two parts, namely – Part A and Part B.
Part A is concerned with the reporting of the reconciliation of turnover and paid tax. Along with it, this part also factors in reasons of ITC with unreconciled differences. Furthermore, it may also contain recommendations of additional tax liability.
Part B is mostly concerned with GST Auditor Certification.
|Annexures||One has to upload audited profit and loss statement and balance sheet.||No such requirement.|
|Certified||Auditor and taxpayers are required to attach their digital signatures.||Taxpayers have to attest the digital signature.|
Hence, it is understood that GSTR is essentially an annual return for a registered taxpayer while the GSTR 9C is an audit certification. So, to avoid the penalty and other hassles that accompany for not filing the GSTR 9C accurately, taxpayers must make it a point to become familiar with all these aspects discussed above in more detail.