The GSTR 9C is an annual audit form for all the taxpayers having the turnover above 2 crores in a particular financial year. Along with the GSTR 9C audit form, the taxpayer will also have to fill up the reconciliation statement along with the certification of an audit.
Audit under GST involves examination of records, returns and other documents maintained by a GST registered person. It also ensures correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and assess other such compliances under GST Act to be checked by an authorized expert.
GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.
However, The Union Finance Minister Nirmala Sitharaman while presenting the Budget 2021 proposed to omit the requirement of furnishing the GSTR audit report in the form GSTR-9C.
Therefore, Financial Year 2019-20 is the last year of GST Audit, after this GST Audit will be abolished so this is the last year of GST Audit, one should correct all the mistakes done in previous years.
1. Comparison of GSTR-3B with GSTR-1 before filing GSTR-9
Comparing GSTR-3B with GSTR-1 is a much-needed process to be undertaken by every taxpayer in order to ensure that there are no variations or gaps, which could, in turn, lead to a demand notice from the tax authorities or unwanted issues that may arise and hinder the accurate filing of the annual returns.
As per section 49(4) of CGST Act’2017, ITC can be used for payment of output tax only. Therefore tax under reverse charge basis (RCM) can be paid through cash only without availing the benefit of ITC. The supplier must mention in his tax invoice whether the tax is payable on reverse charge.
Every late payment of GST attracts interest and it is the duty of the to assure that the GST is timely deposited. In case notices have been issued by the department for the payment of interest, whether the same has been properly dealt with. If claimed excess Input Tax Credit (ITC), payment of interest at 24% on the excess tax amount is required.
The Government has inserted proviso to Section 16(2) and rule 37 i.e., for reversal of ITC in case of non-payment of consideration within 180 days made an apparent absurdity is the GST law, which is overriding the mutual agreements between supplier and recipient which may not be in line with the intention of the GST law which was to enable ITC to taxpayers.
Under GST, transporters should carry an eWay Bill when moving goods from one place to another when certain conditions are satisfied, which must be tallied with invoices issued.
Now both the department namely GST and Income Tax will exchange the information with each other, so an individual needs to take care in reporting turnover under Income Tax and GST.
Once the PAN-based aggregate turnover exceeds Rs.2 crore, every registered GSTIN having the same PAN is required to get its accounts audited and file Form GSTR-9C.
Branches having the same GSTIN: If both the branches have the same GSTIN, then such stock transfers will not be included in aggregate turnover for determining the threshold limit.
Branches having different GSTIN: If both the branches have different GSTIN’s, then such stock transfers will be included in aggregate turnover for determining the threshold limit.
The ITC has to be bifurcated in purchases and different kinds of expenses like Freight, Employee’s cost, Bank charges, Capital Goods, etc. From Profit and Loss Account, expenses can be identified easily, it should be classified in proper heads.
The stock held as per books of accounts and the GST annual return must be the same. Stock transfer outside the state is considered as supply under GST.
Make sure that the both the Inwards and Outwards Supply are charged with the applicable rate and check whether any Inwards and Outwards supply consist of any exempted supply.