"Compliance is the bridge between responsibility and risk management."
What Are GSTR-9 and GSTR-9C?
GSTR-9:
A comprehensive annual return consolidating data from all monthly/quarterly GST returns, detailing outward supplies, ITC claimed, and taxes paid during the financial year.
- Applicability: Mandatory for all regular taxpayers, except:
- ISD (Input Service Distributors)
- TDS/TCS deductors
- Casual taxable persons
- Non-resident taxable persons
GSTR-9C:
A reconciliation statement comparing GSTR-9 with audited financial statements, submitted along with the auditor’s certification.
- Applicability: Aggregate turnover exceeding ₹5 crore in FY 2023–24.
Key Deadlines for FY 2023–24
- GSTR-9 and GSTR-9C Due Date: 31st December 2024
- Late Fee for Non-Filing:
- ₹100/day under CGST and ₹100/day under SGST, capped at 0.25% of turnover.
Checklist for Filing GSTR-9 and GSTR-9C
| Step | Action | Purpose |
|---|
| 1. Ensure All Returns Are Filed | Verify GSTR-1, GSTR-3B, and other applicable returns. | Avoid gaps in data aggregation. |
| 2. Reconcile Outward Supplies | Match sales data in GSTR-1 with GSTR-3B and books of accounts. | Ensure turnover accuracy. |
| 3. Validate ITC | Reconcile ITC claimed in GSTR-3B with GSTR-2A/2B and purchase register. | Identify mismatches, reversals, or unclaimed credits. |
| 4. Identify Additional Liabilities | Compare data in GSTR-1, GSTR-3B, and audited financial statements. | Capture missed liabilities and ensure timely payment through Form DRC-03. |
| 5. Cross-Check Amendments | Include any rectifications from FY 2023–24 or adjustments made until 30th Nov 2024. | Avoid underreporting/overreporting of turnover or ITC. |
| 6. Prepare Reconciliation Data | Gather audited financials, trial balances, and ledger-wise GST reconciliation statements. | Streamline GSTR-9C preparation and auditor certification. |
Section-Wise Details for GSTR-9
| Part | Details | Key Points |
|---|
| Part I: Basic Details | GSTIN, legal name, and trade name (auto-populated). | Review for accuracy. |
| Part II: Outward Supplies | Sales data including taxable, exempt, and nil-rated supplies. | Match with GSTR-1 and books; disclose debit/credit notes. |
| Part III: ITC Claimed | ITC details categorized into inputs, capital goods, and services. | Reconcile with GSTR-2B; reverse ineligible credits. |
| Part IV: Tax Paid | Total tax payable and paid, including CGST, SGST, IGST, and cess. | Cross-check payments made during the year; report unpaid liabilities separately. |
| Part V: Adjustments | Amendments/omissions from earlier periods but adjusted in FY 2023–24. | Include all corrections and justify with supporting records. |
| Part VI: Other Details | Information like demands/refunds, HSN summary, and late fees. | Ensure data consistency and adequate documentation. |
Key Reconciliation Areas for GSTR-9C
I. Turnover Reconciliation
| Item | Issue | Solution |
|---|
| GST turnover vs. Books of accounts | Variance due to timing or omitted invoices. | Reconcile adjustments (e.g., advances, credit notes). |
| Exports | Exports not captured under LUT/bond. | Declare taxable export turnover if conditions unmet. |
| Exempt Supplies | Exempt turnover mismatch between GSTR-1 and books. | Validate exclusions (e.g., SEZ, exempt categories). |
Example:
- Turnover as per GSTR-9: ₹10,00,00,000
- Turnover as per books: ₹9,80,00,000
- Reason: ₹20,00,000 sales were interstate but wrongly categorized.
- Action: Report ₹20,00,000 in GSTR-9C with explanations and pay tax, if due.
II. ITC Reconciliation
| Item | Issue | Solution |
|---|
| Claimed ITC mismatched with GSTR-2B | Supplier non-compliance or timing differences. | Reverse unmatched ITC and claim missed credits later. |
| Capital Goods ITC | Inaccurate classification as revenue ITC. | Reclassify and correct ITC bifurcation in books. |
Example:
- ITC claimed in GSTR-3B: ₹5,50,000
- ITC auto-populated in GSTR-2B: ₹5,30,000
- Reason: Two invoices worth ₹20,000 were not filed by the supplier.
- Action: Communicate with the supplier and reverse unmatched ITC.
III. Tax Paid vs. Liability
| Item | Issue | Solution |
|---|
| Underpayment | Missed liability due to unrecorded sales. | Pay additional tax via Form DRC-03 with interest. |
| Excess tax paid | Over-declaration in GSTR-3B. | Claim refunds under Form RFD-01. |
Illustrative Examples for Common Scenarios
Scenario 1: Omitted Invoices
- Issue: A taxpayer forgot to include ₹2,00,000 in interstate sales in GSTR-1.
- Solution: Report in GSTR-9 Part V (Adjustments). Pay tax with interest before filing.
Scenario 2: Supplier Non-Compliance
- Issue: ITC worth ₹50,000 unavailable in GSTR-2B as the supplier failed to file GSTR-1.
- Solution: Reverse unmatched ITC and follow up with the supplier to correct their filing.
Scenario 3: Exports with LUT
- Issue: ₹5,00,000 export turnover reported but LUT not filed.
- Solution: Treat exports as taxable turnover, pay IGST with interest, and claim a refund later.
Common Errors to Avoid
- Mismatch in Returns: Ensure GSTR-1, GSTR-3B, and GSTR-9 are aligned.
- Unadjusted Credit Notes: Include all credit notes in outward supply reconciliation.
- ITC Reversal Errors: Reverse ineligible ITC before filing GSTR-9.
Late Fees and Penalties
| Aspect | Penalty/Fees |
|---|
| Late filing (GSTR-9) | ₹200/day (₹100 CGST + ₹100 SGST), capped at 0.25% of turnover. |
| Errors in GSTR-9C | Audit objections and potential scrutiny by authorities. |
Key Takeaways
- Reconcile turnover, ITC, and liabilities meticulously.
- Pay additional liabilities and reverse ineligible ITC via Form DRC-03.
- Maintain clear documentation for audit trails and future references.
