GSTR 9C: Reconciliation Format, Certificate, Filing, and Rules

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Published Date:  01-02-2024   Author:   arpitarathod98
gstr c reconciliation format certificate filing and rules

If you are a taxpayer registered under GST and your annual turnover exceeds Rs. 5 crore, submitting a reconciliation statement, known as GSTR-9C, and your annual return (GSTR-9) is obligatory. GSTR-9C provides a concise overview of variations between the figures in your GST returns and the audited financial statements, requiring certification from a chartered or cost accountant.

Filing GSTR-9C is a mandatory aspect of GST compliance, which is crucial in ensuring the precision and openness of your tax-related activities. This blog will delve into the comprehensive details of the GSTR-9C format, certification process, and GSTR-9C filing guidelines

What is GSTR-9C?

GSTR 9C, introduced by the government on September 13, 2018, is an annual audit form and reconciliation statement. It aims to showcase the year-end reconciliation arising from variations between the taxpayer’s Books of Accounts and the GSTR 9 (annual return) for the relevant year. Fortunately, not all registered taxpayers are mandated to file GSTR 9C. Only those with an aggregate turnover exceeding Rs 2 crore during the relevant previous year must adhere to this requirement as per Section 35 (5) of the CGST Act, 2017. Importantly, for the convenience of tax filers, there’s no need for hard copies; a simple online submission through the GSTN portal suffices for complete compliance with the law.

GSTR-9C Applicability & Turnover Limit 

  • Individuals registered under GST with a turnover exceeding the prescribed GSTR-9C limit of Rs. 5 crore during a financial year are mandated to submit the report.
  • According to CGST notification number 30/2021 dated July 30, 2021, foreign companies engaged in the airline industry, in compliance with the Companies Act 2013, are not obligated to fulfill the GSTR-9C requirement.
  • Non-resident individuals providing OIDAR services in India to unregistered persons are exempt from submitting GSTR-9 and GSTR-9C.
  • The GSTR-9C turnover limit has been raised to Rs. 5 crore for FY 2018-19, FY 2019-20, FY 2020-21, FY 2021-22, and FY 2022-23, based on CBIC notifications.

GSTR 9C due date:

The deadline for GSTR-9C filing aligns with the last date for filing the annual returns in GSTR-9. Hence, GSTR-9C must be submitted on or before the 31st of December of the subsequent year following the relevant Financial Year (FY) under audit.The government may extend the due date if deemed necessary. For example, the GSTR-9C FY 2022-23 deadline is 31 December 2023.

Late Filing Penalty for GSTR-9C:

In case of delayed submission of GSTR-9C, a general penalty of Rs 25,000 is applicable, as outlined in the CGST and SGST Act 2017. As no specific penalty is introduced for the late filing of GSTR-9C, the general liability mentioned above will be imposed on defaulters in this scenario.

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Documents Required for Submission Alongside GSTR-9C:

  • Balance Sheet: A comprehensive financial statement that overviews a company’s financial position, showcasing its assets, liabilities, and shareholders’ equity.
  • Profit & Loss Account or Income & Expenditure Account: This statement details the company’s revenues, costs, and expenses during a specific period, ultimately reflecting its profitability.
  • Cash Flow Statement: An important financial document outlining the cash inflows and outflows within a given timeframe, providing insights into liquidity and operational activities.
  • Others Prescribed: Additional documents may be prescribed by the regulatory authorities for a thorough and accurate reconciliation.

GSTR 9C filing process

Maintain Books of Accounts:

Every registered person must maintain comprehensive books of accounts as per GST and other relevant laws.

Prepare Annual Financial Statements:

Based on the maintained books of accounts, prepare Annual Financial Statements, including

  • Balance Sheet
  • Profit & Loss Account
  • Income & Expenditure Account
  • Cash Flow Statement (if applicable)
  • Note: These statements are prepared at the PAN level.

Auditing Under Applicable Laws:

Ensure Annual Financial Statements are audited under applicable laws (e.g., Income Tax Law, Companies Act).

If audited under another law, separate auditing under GST may not be necessary.

GSTIN Level Audit (if required):

If not audited under any other law, conduct an independent audit under GST law.

GSTR 9C instructions specify that a PAN-level audit should generally suffice, and a GSTIN-level audit is not typically required.

Collect GSTIN Wise Details:

Gather GSTIN-wise details of the assessee, covering turnover, Input Tax Credit (ITC), tax payments, etc.

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Reconcile these details with GSTR-9 in Part A of GSTR-9C and report any discrepancies.

Certification by CA or CMA:

In Part B of GSTR-9C, provide certification. This can be done by a Chartered Accountant (CA) or a Cost and Management Accountant (CMA).

The auditor’s certificate in GSTR 9C

Part B of GSTR-9C serves as both the audit and certification, as the law mandates no separate audit report format.

Upload Documents on Common Portal:

Upload GSTR-9, GSTR-9C, audited annual financial statements, and any prescribed details on the common portal by the end of December of the subsequent financial year. (Note: Deadline extensions may apply.

Conclusion 

Filing GSTR-9C isn’t just a legal requirement; it’s a prudent practice to align your GST data with your financial statements. This process aids in pinpointing and rectifying errors or inconsistencies in your tax reporting, mitigating the risk of or notices from tax authorities.

To file GSTR-9C, you must draft a reconciliation statement in the prescribed format, duly certified by a chartered accountant or cost accountant. Utilize the online GST portal or a Facilitation centre for submitting GSTR-9C, accompanied by GSTR-9 and a copy of your audited accounts. The deadline for GSTR-9C filing is 31st December of the subsequent year following the relevant financial year.

Also Read: Issues Faced While Filing GSTR 9 And GSTR 9C

Frequently Asked Questions (FAQs)

What is GSTR-9C, and how does it relate to GST filing?

GSTR-9C is an annual reconciliation statement reconciling the financial books with the GST returns filed in GSTR-9. It ensures accuracy and compliance with GST laws.

Who must file GSTR-9C, and what is the turnover limit?

Businesses with an annual turnover exceeding Rs. 2 crore during the relevant financial year must file GSTR-9C.

What are the critical documents needed for GSTR-9C filing?

The primary documents include audited financial statements such as the Balance Sheet, Profit & Loss account, Cash Flow statement, and others as prescribed.

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Arpita Rathod

Arpita is a seasoned financial content writer with a specialized focus on Goods and Services Tax (GST). With a deep passion for the world of taxation and a Master's in English Literature, her specialization lies in taking challenging topics from diverse fields and breaking them down into digestible, engaging narratives.

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