The Audit Report is principally reconciliation of annual financial statement of taxable person (balance sheet and Profit and Loss Account/Income and Expenditure Account) with GSTR-9 i.e. Annual Return of the taxable person.
The contents are as follows:
Part A – Reconciliation Statement
This part consists of following sub-parts
Part I – Basic Details –
- Financial year
- GSTIN
(3A) Legal Name
(3B) Trade Name (if any)
- Are you liable to audit under any Act? (like Companies Act, Income Tax Act, India Trust Act etc.)
Part II – Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (i.e. GSTR-9)
Part III – Reconciliation of tax paid
Part IV – Reconciliation of net Input Tax Credit (ITC)
Part V – Auditor’s recommendation on additional Liability due to non-reconciliation
Part B – Certification by Auditor
This part contains form of report to be given by auditor who has conducted audit of reconciliation statement. Since the audit of reconciliation statement can be conducted either by person who conducted the audit of annual financial
statement of the company or by any other practicing CA/CMA, there are two different formats of certification by auditor.
PART II OF AUDIT REPORT GSTR-9C
Part II consists of reconciliation of the annual turnover declared in the audited Annual Financial Statement with the turnover as declared in the Annual Return furnished in form GSTR-9 for this GSTIN.
Instructions to fill this part are given below the form GSTR-9C.
The turnover as per the audited Annual Financial Statement shall be declared in column 3A. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons/entities with presence over multiple States. Such persons/entities, will have to internally derive their GSTIN wise turnover and declare the same here. This shall include export turnover (if any).
Reference to audited Annual Financial Statement includes reference to books of account in case of persons/entities having presence over multiple States.
Reasons for non-reconciliation between the annual turnover declared in the audited Annual Financial Statement and turnover as declared in the Annual Return (GSTR-9) shall be specified in column 6.
PART III OF AUDIT REPORT GSTR-9C
Part III consists of reconciliation of the tax payable as per declaration in the reconciliation statement and the actual tax paid as declared in Annual Return (GSTR-9).
Instructions to fill this part are given below the form GSTR-9C.
PART IV OF AUDIT REPORT GSTR-9C
Part IV consists of reconciliation of Input Tax Credit (ITC).
Reconciliation of ITC declared in the Annual Return (GSTR-9) against the expenses booked in the audited Annual Financial Statement or books of account is also required.
Instructions to fill this part are given below the form GSTR-9C.
ITC availed (after reversals) as per the audited Annual Financial Statement shall be declared in column 12A. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons/entities with presence over multiple States. Such persons/entities, will have to internally derive their ITC for each individual GSTIN and declare the same in column 12A.
Reference to audited Annual Financial Statement includes reference to books of account in case of persons/entities having presence over multiple States.
Reasons for non-reconciliation of ITC as per audited Annual Financial Statement or books of account and the net ITC availed in GSTR-9 are to be disclosed in column No. 13.
PART V OF AUDIT REPORT GSTR-9C
Part V consists of the auditor’s recommendation on the additional liability to be discharged by the taxpayer due to non-reconciliation of turnover or non-reconciliation of input tax credit. The auditor shall also recommend if there is any other amount to be paid for supplies not included in the Annual Return. Any refund which has been erroneously taken and shall be paid back to the Government shall also be declared in this table. Lastly, any other outstanding demands which is recommended to be settled by the auditor shall be declared in this Table.
Towards, the end of the reconciliation statement taxpayers shall be given an option to pay their taxes as recommended by the auditor.
