Reconciliation under GST- 11 Essential Points to note before the Annual GST Audit!
Form GSTR-9C is one of the two annual return forms that businesses with a turnover of more than Rs.2 Crores need to file at the end of each financial year.
Although the dates of filing this return have extended over the past few years but taxpayers will have to file it eventually, more sooner than later.
These annual return forms are significant as they are the summary returns of all the transactions & business activities done in the entire year.
But also because these are the final declarations and cannot be amended since there is no provision yet to amend the annual return forms.
You can also file form GSTR-9C using GST Return Filing Software
In this article, we will talk about Form GSTR-9C & the role of reconciliation in filing the form. We will also address a few points you must note while or before filing the form GSTR-9C
Form GSTR-9C is an annual return reconciliation form that all taxpayers having an annual aggregate turnover of more than Rs. 2 Crores need to form.
Form GSTR-9C is the reconciliation statement between Form GSTR-9 form & the audited account statement of your business. Any mismatch or differences occurring during the reconciliation activity will have to be justified with reasons by the taxpayer in the form itself.
It is clear from the above explanation that the government’s motive here is transparency & clarity. GSTR-9C will throw light on any differences in- what has been declared in the returns all year long and what has been accounted in your records.
While filing the form an audit of all your business accounts by a professional CA or Cost Accountant is required mandatory. And further off a certificate of audit or Audit report must also be furnished along with Form GSTR-9C.
GSTR-9C is filed on a GSTIN level & not PAN level, so there can be multiple GSTR-9C Forms for one PAN.
The taxpayers will have to release any balance tax liability that arises upon the reconciliation through Form DRC-03, which is available on the GST Portal.
Form GSTR-9C comprises of two parts, Part A: the reconciliation Statement, which is again divided in 5 Tables & Part B: Certification, which is a certificate declaration filed & signed by a CA or a Cost Accountant.
Let us look into each Part & tables one by one-
Part- I Basic Details
In this part, you need to fill, the Financial Year, GSTIN, Legal Name, Trade Name, & Turnover (to see if you are liable to audit)
Part-II Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9)
Part-III Reconciliation of tax paid
Part-IV Reconciliation of Input Tax Credit (ITC)
Part-V Auditor’s recommendation on additional Liability due to non-reconciliation
To be filled & signed by the Auditor or a CA and filed by the taxpayer along with the reconciliation statement.
The significant role of reconciliation in GSTR-9C
Reconciliation from a very micro-level is required to acquire a perfect & accurate GSTR-9C filing & audit. Reconciliation of older returns plays a vital role while reconciling all the returns throughout the year, you can take help from reconciliation software to manage & carry out accurate reconciliation.
Form GSTR-9 is nothing but the compilation of forms GSTR-1, GSTR-3B, & GSTR-2A from the entire year. Any mismatches or discrepancies in any of these forms from any month of the year can cause a misbalance & mismatch in the form GSTR-9 which will directly affect the audit.
Form GSTR-9C in nothing but the reconciliation statement between what you have filed in your annual return & what you have declared or mentioned in your personal books of accounts.
Both the above must match & that is how the Government will have full transparency of whether you are a regular & righteous tax-filer or not. It clears up your business with respect to taxes, in the eyes of the Government.
Hence reconciliation on a monthly basis is a highly recommended & clever idea for businesses & accountants. This will help you in keeping your accounts & returns neat & organized & will ensure accuracy in the annual reconciliation.
Another important task for taxpayers, businesses, & accountants can be data preparation, it is very important to store & maintain the reports of the various returns & transactions throughout the year.
These reports can serve as a great & simple option to reconcile the annual returns easily.
Team In Filings can help your business with both of these tasks & more so that you can stay assured that your annual return filings & audits shall be error-free & organized.
Team In Filings provides solutions to file GST returns (GSTR-1, GSTR-2A (reconciliation), GSTR-3B, GSTR-9 & GSTR-9C), extract & maintain various important reports, & Advanced reconciliation. These 3 major tools are guaranteed to make your monthly as well as annual filing & reconciliation better, more accurate, & more organized, in minimal efforts & time consumption.
By now, you know the meaning of Form GSTR-9C, it’s objective & format.
In this final section, we are going to shed some light on some highly important aspects that you must consider before filing form GSTR-9C and conducting the audit of the accounts of your Business.
So we have analysed & stated down for you 10 most important things to consider before filing GSTR-9C & audit-
The annual accounts audit & reconciliation of the GSTR-9 with accounts have only one objective- transparency to avoid the tax leakage & clear what taxpayers are actually earning, what they are disclosing, what tax amount they are paying & what amount of ITC they have claimed.
Taxpayers must focus on reconciling their GSTRs monthly rather than compiling them.
Even if the year has ended & you have to reconcile & audit now you can take help from GSPS & software solution providers such as Team In Filings, which will help you in filing the returns & in auditing.
With Team In Filings, you can save your time & most of all the efforts that this tedious task of reconciliation & audit requires. You can enhance your productivity, & accuracy in the tasks that you are performing.