Comprehensive Guide to GSTR-9C: Reconciliation Statement & Certification

1. Introduction to GSTR-9C

What is GSTR-9C?

GSTR-9C is a reconciliation statement mandated under the Goods and Services Tax (GST) regime in India. It is a statement of reconciliation between the annual returns filed in GSTR-9 and the audited annual financial statements of the taxpayer. This document ensures that the values reported in the GST returns align with the financial records, thereby maintaining consistency and transparency in tax reporting.

2. Applicability and Turnover Limit

GSTR-9C Applicability

GSTR-9C is applicable to every registered taxpayer whose aggregate annual turnover exceeds ₹5 crores during a financial year. This statement must be filed along with the annual return in GSTR-9.

GSTR-9C Turnover Limit

Initially, the turnover limit for the applicability of GSTR-9C was ₹2 crores, but it has been increased to ₹5 crores to ease compliance for smaller taxpayers.

3. Due Date for GSTR-9C

What is the Due Date for GSTR-9C?

The due date for filing GSTR-9C is typically December 31st of the subsequent financial year. For instance, for the financial year 2022-23, the due date would be December 31, 2023. However, the government may extend this deadline, so it is advisable to keep abreast of official notifications.

4. Importance of GSTR-9C

What’s the Importance of GSTR-9C?

1. Ensures Compliance: GSTR-9C helps in ensuring that the details of the turnover, tax paid, and refund claimed are correct.
2. Tax Audits: It acts as an audit tool for the GST authorities to ensure there is no tax evasion.
3. Transparency: It enhances transparency in tax reporting and reconciliation of financial records with GST returns.
4. Accountability: It holds taxpayers accountable for the accuracy of the data reported in their GST returns.

5. Contents and Format of GSTR-9C

GSTR-9C comprises two main parts:

• Part-A: Reconciliation Statement
• Part-B: Certification

Contents of GSTR-9C

1. Basic Details: GSTIN, legal name, trade name, financial year, and auditor’s details.
2. Reconciliation of turnover declared in audited financial statement with turnover declared in annual return (GSTR-9).
3. Reconciliation of tax paid.
4. Reconciliation of input tax credit (ITC).
5. Auditor’s recommendation on additional liability due to non-reconciliation.

6. Part-A: Reconciliation Statement

What Does Part-A Contain?

1. Reconciliation of Gross Turnover: This section reconciles the gross turnover declared in the audited annual financial statements with the turnover declared in GSTR-9.
2. Reconciliation of Taxable Turnover: Adjustments for transactions like unbilled revenue, unadjusted advances, deemed supply, credit notes, etc., are considered.
3. Reconciliation of Taxes Paid: It includes the reconciliation of tax payable and tax actually paid, along with any additional liability recommended by the auditor.
4. Reconciliation of Input Tax Credit (ITC): This involves reconciling the ITC claimed in GSTR-9 with the ITC availed in the financial statements.

7. Part-B: Certification

What Does Part-B Contain?

Part-B is the certification by the auditor. It contains the auditor’s observations and comments on the reconciliation, certifying the accuracy and completeness of the information provided in GSTR-9C.

8. Verification/Self-Certification by Taxpayer

Verification by Taxpayer

The taxpayer must verify the accuracy and completeness of the information provided in GSTR-9C. This verification ensures that the taxpayer acknowledges the correctness of the data before submission.

Self-Certification

For some categories of taxpayers, GSTR-9C can be self-certified instead of requiring certification from a Chartered Accountant or Cost Accountant. This provision is aimed at simplifying compliance for smaller businesses.

9. Changes in GSTR-9C Format & Filing

Recent Changes in GSTR-9C Format & Filing

1. Turnover Limit Adjustment: The turnover threshold for mandatory GSTR-9C filing has been raised from ₹2 crores to ₹5 crores.
2. Simplified Format: The government has simplified the format to reduce the compliance burden on taxpayers.
3. Self-Certification: Introduction of self-certification for specific categories of taxpayers to facilitate easier compliance.

10. Frequently Asked Questions (FAQs)

FAQs

1. Who needs to file GSTR-9C?
   • Taxpayers with an annual turnover exceeding ₹5 crores.
2. Is GSTR-9C mandatory for all taxpayers?
   • No, it is mandatory only for those with an annual turnover above the specified limit.
3. Can GSTR-9C be self-certified?
   • Yes, for certain categories of taxpayers, self-certification is allowed.
4. What happens if there are discrepancies in GSTR-9C?
   • Discrepancies may result in additional liabilities, which need to be paid and reported.
5. Is the due date for GSTR-9C the same every year?
   • Generally, yes, it is December 31st of the subsequent financial year, but it can be extended by government notifications.
6. What are the penalties for late filing of GSTR-9C?
   • Penalties include late fees and interest on unpaid tax liabilities, as prescribed under GST law.
7. Where can I find the latest updates on GSTR-9C?
   • Latest updates can be found on the official GST portal and through government notifications.

Conclusion

GSTR-9C plays a critical role in maintaining the integrity and transparency of the GST system in India. Understanding its requirements, due dates, and the importance of accurate reconciliation can help taxpayers comply effectively and avoid penalties.