GST-Annual Return GSTR 9 And Reconciliation Statement GSTR 9C
CMA Arun S. Karnik
Contact : 90040 35754 • E-mail: [email protected]
- 35(5) of the CGST Act, 2017 (the Act) requires all taxable persons with a turnover exceeding rupees 2 crore to get the GST records audited by a Cost Accountant or a Chartered Accountant in practice and furnish a copy of audited annual accounts and a Reconciliation Statement, duly certified by the auditor, in Form GSTR-9C while filing the Annual Return in Form GSTR 9.
That is, the Annual Return for the year ended March 31, 2018 (the period from July 1, 2017 to March 31, 2018), which is to be filed by December 31, 2018 cannot be filed by such taxable person without the Reconciliation Statement GSTR 9C, duly certified by the auditor
The Central Board of Indirect Taxes and Customs (CBIC) has notified the format of the Reconciliation Statement to be signed by the GST Auditor appointed to conduct audit under S. 35(5) of the Act.
A perusal of Form GSTR 9C would reveal that the Reconciliation Statement involves reconciliation of the information furnished in the Annual Return GSTR 9 and the financial records of the registered person.
It is to be noted that both the Forms GSTR 9 and GSTR 9C are to be filed for each one of the Goods and Services Tax Identification Number (GSTIN). Thus, where a registered person has operations in more than one state or has opted for multiple registrations in a state, such registered person would posses more than one GSTINs against his PAN no. In such cases, the GSTIN-wise data will have to be extracted from the financial books of the entity.
The Annual Return essentially involves compilation of the data furnished in the GSTR 1 and GSTR 3B Returns filed during the year. An attempt is made to consider individual line-wise requirements of GSTR 9C, its connection with the relevant details in the Annual Return GSTR 9 and the audited financial statements.
- Section 5 of the GSTR 9C deals with reconciliation of gross turnover.
The figure of turnover as reported in the audited financial statements may
differ from that reported in the GST Returns during the year on account of the
- Revenue included in the previous year on accrual basis but actually billed
during the audit year. GST would be payable on such accrued revenue of
the earlier year if billed during the audit year and accordingly the GSTR 1
and GSTR 3B Returns will have reported such revenue during the audit
year. Thus, the revenue figure reported in the audited financial
statements will be lower than that reported in the GST Returns. Similarly,
the audited financial statements may include revenue accounted on
accrual basis but which is actually billed in the subsequent year. Since
GSTR 9 Return will include turnover only on the basis of billing such
revenue included in the audited financial statements on accrual basis will
have to be reduced to reconcile with the Annual Return.
b.On the other hand, advances might have been received from customers
against pending orders. These advances, if received before October 12,
2017 (in the case of persons having turnover less than rupees 1.50 crore) or
before November 15, 2017 (in the case of persons having turnover more
than rupees 1.50 crore), would be liable for payment of GST. Thus, such
advances would get reported in the GSTR 1 and GSTR 3B Returns. However,
the financial statements will not recognize unbilled advances as income.
Similarly, unbilled advances carried forward from the previous year, billing
in respect of which was done during the audit year would be recognized as
revenue in the audited financial statements, whereas the GST Returns will
not reflect such carried forward unbilled advance as turnover during the
- c. Schedule I of the CGST Act lists certain supplies as ‘deemed supplies’ even
if these supplies are made without consideration. Value of such deemed
supplies will be reported in the GST Returns whereas these supplies will not
be reflected as revenue in the audited financial statements.
- d. Where credit notes have been issued after the end of the audit year in
respect of invoices raised during the audit year, such credit notes will get
reflected in the GSTR 1 and GSTR 3B Returns of the following year,
however such credit notes will get included in the Annual Return. Since
such credit notes will not be included while reporting revenue figures in the
audited financial statements, these will appear as a reconciliation item in the
e. Audited financial statements will reflect revenue figures
net of any trade discounts. Where such trade discounts are
not recognized and hence GST has been charged on such
price before reducing such trade discount, the
turnover figures as per audited financial statements and
that reported in the Annual Return will need to be
f. The auditd financial statements are prepared for the period
April, 2017 to March, 2018. Since GST Annual Return is
for the period July 2017 to march 2018, turnover for the
period April-June 2017 included in the turnover as per the
audited financial statements will have to be reduced to
reconcile with the GSTR 9 Return.
g. If any advances have been received from customers after
12th October or 15th November, 2017 (as the case may be),
on which GST has not been charged and in respect of
which invoice has not been raised until March 31, 2018,
and if such advances have been included as revenue in the
audited financial statements, the value of these advances
will have to be reduced from the revenue as per the
audited financial statements to reconcile with the GSTR 9