FORM GSTR-9C PRATIK SUDHIR SHAH CHARTERED ACCOUNTANT 9819122318 pratiksh2704@gmail.com

GSTR-9C Section 35(5), 44(2) Presented by- CA Pratik Sudhir Shah 9819122318 pratiksh2704@gmail.com

LEGAL PROVISIONS 4 S. 35(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit- a copy of the audited annual accounts, the reconciliation statement under S. 44(2) and such other documents in such form and manner as may be prescribed.

LEGAL PROVISIONS 5 S. 44(2) Every registered person who is required to get his accounts audited in accordance with the provisions of S. 35(5) shall furnish, electronically, the annual return under S. 44(1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.

LEGAL PROVISIONS 6 R. 80(3) Every registered person whose aggregate turnover during a financial year exceeds Rs. 2 crore shall get his accounts audited as specified under S. 35(5) and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C

FORM GSTR-9C 15 To check places of business with RC in FORM GST REG-06

turnover declared in Annual Return (FORM GSTR-9) FORM GSTR-9C 16 Part-II: Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (FORM GSTR-9) TABLE NO. DESCRIPTION 5 Reconciliation of Gross Turnover

FORM GSTR-9C 17 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5A Turnover (including exports) as per audited financial statements for the State/ UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) INSTRUCTIONS (As Appended below FORM GSTR-9C) The turnover as per the audited Annual Financial Statement shall be declared here. 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). It may be noted that reference to audited Annual Financial Statement includes reference to books of accounts in case of persons/ entities having presence over multiple States.

FORM GSTR-9C 19 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5B Unbilled revenue at the beginning of Financial Year (+) INSTRUCTIONS (As Appended below FORM GSTR-9C) Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting in the last FY and was carried forward to the current FY. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here. For example, if Rs. 10 crore of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on Rs. 4 crore of such revenue, then value of Rs. 4 crore shall be declared here S.31(2) an invoice for supply of services may be issued within 30 days.

FORM GSTR-9C 20 Particular Ampount (Rs.) Opening balance of unbilled revenue as on 31St March 2017 XXXX Less: Invoice raised during the period April 2017 to June 2017 (XXXX) Less: Invoice raised during the period July 2017 to March 2018 Add: Revenue recognized during FY 2017=2018 Closing balance of unbilled revenue as on 31st March 2018

FORM GSTR-9C 21 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5C Unadjusted advances at the end of the Financial Year (+) INSTRUCTIONS (As Appended below FORM GSTR-9C) Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall be declared here.

FORM GSTR-9C 23 Advances not to be considered- Against goods (after 15-Nov-2017) (13-Oct-2017 for GTO below 1.5 crore) Against exempted services Deposits and securities received Loans and Advances Revenue Recognition- AS-9: Revenue from sale of goods is recognized at the time of transfer of risks and rewards & revenue from services is recognised as the service is performed

FORM GSTR-9C 25 Ind AS-18: revenue from sale of goods is recognised on transfer of significant risk and rewards and revenue from services is recognised when the revenue can be measured reliably The auditor should refer unadjusted balances in Table 11A [advances received during the period] and 11B [advances adjusted during the tax period] of GSTR-1. Even if such advances are not shown in GSTR-1, the auditor shall add the same in this Table

FORM GSTR-9C 26 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5D Deemed Supply under Schedule I (+) INSTRUCTIONS (As Appended below FORM GSTR-9C) Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is already part of the turnover in the audited Annual Financial Statement is not required to be included here. Schedule-I transactions may be verified through challans and e-way bills

FORM GSTR-9C 27 This Table will cover supplies falling under 4 clauses of Schedule-I, except those which are already reported in the Audited Financial Statements. Para 1 of Schedule-I: Permanent transfer or disposal of business assets where ITC has been availed on such assets, e.g. stock transfers, assets donated, de- commissioning of plants, impairment of assets, assets taken by owners Para 2 of Schedule-I: persons…”, e.g. branch employer to employee “Supply of goods or services or both between related transfers, unilateral gifts (Rs. 50,000/- and above) by

FORM GSTR-9C 28 Para 3 of Schedule-I: Transaction between principal and his agent, e.g. in GST gross amount is shown in the hands of the agent whereas in financials only commission is shown Para 4 of Schedule-I: Import of services from a related person, e.g. foreign branch supplying manpower to HO in Delhi; sharing of cloud services Challenges- Transfer of capital goods not recognized Services between related parties not recognized Valuation of services without consideration

FORM GSTR-9C 29 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5E Credit Notes issued after the end of the financial year but reflected in the annual return (+) INSTRUCTIONS (As Appended below FORM GSTR-9C) Aggregate value of credit notes which were issued after 31st of March for any supply accounted in the current financial year but such credit notes were reflected in the annual return (FORM GSTR-9) shall be declared here. CN issued during FY 2018-19 may not be given effect to during FY 2017-18. GSTR-9 captures this detail from Table 11 [Supplies/ tax reduced through amendments (-)(net of credit notes)] If 5A is net turnover (on accrual basis) then it may be added to match with the gross turnover of GSRT-9.

FORM GSTR-9C 30 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5F Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST (+) INSTRUCTIONS (As Appended below FORM GSTR-9C) Trade discounts which are accounted for in the audited Annual Financial Statement but on which GST was leviable (being not permissible) shall be declared here. Types of discounts- Special discount: On any extraordinary purchase made by customers Bonus Discounts: On negotiations made after sales Incentives: Given on achieving targets and making sales without reducing sales price Remission: General fall in prices Compensation: Significant correction of prices

FORM GSTR-9C 31 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5G Turnover from April 2017 to June 2017 (-) INSTRUCTIONS (As Appended below FORM GSTR-9C) Turnover included in the audited Annual Financial Statement for April 2017 to June 2017 shall be declared here.

FORM GSTR-9C 32 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5H Unbilled revenue at the end of Financial Year (-) INSTRUCTIONS (As Appended below FORM GSTR-9C) Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting during the current FY but GST was not payable on such revenue in the same FY shall be declared here. In respect of F.Y. 17-18, the closing balance of unbilled revenue stands at Rs. 5 crore. This means that Rs. 5 crore is the part of the turnover for the FY 2017-18 of the entity and will not be reflected in GST annual return since invoice under GST has not been issued.

FORM GSTR-9C 33 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5I Unadjusted Advances at the beginning of the Financial Year (-) INSTRUCTIONS (As Appended below FORM GSTR-9C) Value of all advances for which GST has not been paid but the same has been recognized as revenue in the audited Annual Financial Statement shall be declared here. As GSTR-9C is being filed for the first time for the FY 2017-18, there is no room for unadjusted advances at the beginning of FY 17-18.

FORM GSTR-9C 34 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5J Credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST (-) INSTRUCTIONS (As Appended below FORM GSTR-9C) Aggregate value of credit notes which have been accounted for in the audited Annual Financial Statement but were not admissible under Section 34 of the CGST Act shall be declared here. It may include credit notes which were issued otherwise than S. 34 read with R. 53 i.e. financial credit notes, e.g. cash discount offered for early payment by debtors

FORM GSTR-9C 37 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5K Adjustments on account of supply of goods by SEZ units to DTA Units (-) INSTRUCTIONS (As Appended below FORM GSTR-9C) Aggregate value of all goods supplied by SEZs to DTA units for which the DTA units have filed bill of entry shall be declared here. Supplies by SEZs to DTA units for which DTA units have filed bill of entry, such transaction does not form part of GST turnover as that is not reported by SEZ unit in its GST returns. [Refer Rule 58 of SEZ Rules, 2006]

FORM GSTR-9C 38 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5L Turnover for the period under composition scheme(-) INSTRUCTIONS (As Appended below FORM GSTR-9C) There may be cases where registered persons might have opted out of the composition scheme during the current financial year. Their turnover as per the audited Annual Financial Statement would include turnover both as composition taxpayer as well as normal taxpayer. Therefore, the turnover for which GST was paid under the composition scheme shall be declared here. This amount can be taken from clause 6C of GSTR-9A, which is the sum total of table 6 [Tax on outward supplies] and 7 [Amnd. to outward supplies] of GSTR-4. Besides this exempted supplies of traders are to be extracted from the books of accounts

FORM GSTR-9C 39 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5M Adjustments in turnover under section 15 and rules there under (+ / -) INSTRUCTIONS (As Appended below FORM GSTR-9C) There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 of the CGST Act, 2017 and rules there under. Therefore, any difference between the turnover reported in the Annual Return (FORM GSTR-9) and turnover reported in the audited Annual Financial Statement due to difference in valuation of supplies shall be declared here. (+) The differences arose on account of netting off of certain expenses in financials whereas the same are shown as turnover in GST

FORM GSTR-9C 40 (+) Taxes other than GST paid and recovered from customers whereas the same are taken in turnover as per valuation under GST (+) Free of cost supplies made by the contractee which do not reflect in the Financials of the contractor whereas the same is taken in turnover by the contractor for valuation purposes under GST (+) Incidental expenses like commission, packing, handling charges paid by the supplier before delivery and recovered from the customer and being net off in P&L A/c but shown as GST turnover in terms of valuation provisions (+) E-comm. operator compensating vendors participating in mega sales. Such discounts are offered through financial credit notes in the form of subsidy being net off with commission paid to operator

INSTRUCTIONS (As Appended below FORM GSTR-9C) 41 TABLE NO. DESCRIPTION 5N Adjustments in turnover due to foreign exchange fluctuations (+/ -) INSTRUCTIONS (As Appended below FORM GSTR-9C) Any difference between the turnover reported in the Annual Return (GSTR-9) and turnover reported in the audited Annual Financial Statement due to foreign exchange fluctuations shall be declared here. The GST valuation has to be derived by considering the rate of exchange as specified in Rule 34 i.e. ROE as notified by CBIC for the date of time of supply of goods (S. 14 of Customs) and ROE as per GAAP for the date of time of supply of services. In books ROE is as per AS-11.

FORM GSTR-9C 42 ABC Ltd. exported goods of $10,000/- to U.S.A. Exchange rate on the date of filing shipping bill is Rs. 68 (CBIC) & Rs. 71 (RBI) Exchange rate at the time of receipt from customer Rs. 73 (Actual as per Bank) Turnover for GST purposes Rs. 6,80,000 (Rs. 68* 10,000) Turnover for Books Rs. 7,10,000 (Rs. 71* 10,000) Difference of (Rs. 73-71)*10,000 i.e. Rs. 20,000/- (Rs. 2*10,000) is to be shown as foreign exchange fluctuation in the credit side of P&L A/c

FORM GSTR-9C 43 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5O Adjustments in turnover due to reasons not listed above (+/-) [Page: 321] INSTRUCTIONS (As Appended below FORM GSTR-9C) Any difference between the turnover reported in the Annual Return (FORM GSTR-9) and turnover reported in the audited Annual Financial Statement due to reasons not listed above shall be declared here.

FORM GSTR-9C 44 Physician sample distributed by the pharmaceutical company to physician for free Notice pay recovered from employees Gifts given to customers/ vendors/ distributors Stocks issued to discharge CSR obligation Incentives/ Rebate received from supplier and considered as supply under GST Sales promotion/ advertisement reimbursement received and considered as supply Out of pocket expenses considered in the value of supply Value on which GST paid on sale of Capital Goods

FORM GSTR-9C 45 (-) Profit on sale of Capital goods disclosed in audited Annual Financial Statements Loss on sale of Capital goods disclosed in audited Annual Financial Statements Inward supply returns considered as Outward supply (-) Outward supply returns considered as Inward supply (-) Income in Profit and Loss account recognized based on special circumstances Value on which GST is liable to be paid in respect of transactions where income is recognized based on special circumstances Discounts which are not to be excluded from the value of supply as per S. 15 Any other amount

FORM GSTR-9C 46 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 5P Annual turnover after adjustments as above [Page: 327] TABLE NO. DESCRIPTION 5Q Turnover as declared in Annual Return (FORM GSTR-9) [Page: 328] INSTRUCTIONS (As Appended below FORM GSTR-9C) Annual turnover as declared in the Annual Return (FORM GSTR-9) shall be declared here. This turnover may be derived from Sr. No. 5N [Total turnover on which tax is payable and tax is not payable but does not include inward supplies liable to RCM], 10 [Supplies/ tax declared through amendments (+)] and 11 [Supplies/ tax reduced through amendments(-)] of Annual Return (FORM GSTR-9).

FORM GSTR-9C 47 TABLE NO. DESCRIPTION 5R Un-Reconciled turnover (Q - P) [Page: 330] Taxable, exempted or non-GST outward supplies not declared in annual returns will form part of auto-computed value in this Table FORM GSTR-9C do not specifically provide to claim the benefit of tax paid erroneously

FORM GSTR-9C 48 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 6 Reasons for Un - Reconciled difference in Annual Gross Turnover [Page: 331] INSTRUCTIONS (As Appended below FORM GSTR-9C) Reasons for non-reconciliation between the annual turnover declared in the audited Annual Financial Statement and turnover as declared in the Annual Return (FORM GSTR-9) shall be specified here.

FORM GSTR-9C 49 Reasons for reconciliation difference could be- Capital Gain/ Loss on sale of Fixed Asset recorded in books for turnover purpose compared with total consideration available in GST Transaction reported in Delivery Challan for supply on sale or approval basis beyond a period of 6 months shall be deemed to be supply under GST but may not be a sale for revenue recognition in books

FORM GSTR-9C 50

FORM GSTR-9C 51 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 7 Reconciliation of Taxable Turnover [Page: 334] INSTRUCTIONS (As Appended below FORM GSTR-9C) The table provides for reconciliation of taxable turnover from the audited annual turnover after adjustments with the taxable turnover declared in annual return (FORM GSTR-9).

FORM GSTR-9C 65 INSTRUCTIONS (As Appended below FORM GSTR-9C) TABLE NO. DESCRIPTION 8 Reasons for Un - Reconciled difference in taxable turnover [Page: 347] INSTRUCTIONS (As Appended below FORM GSTR-9C) Reasons for non-reconciliation between adjusted annual taxable turnover as derived from Table 7E above and the taxable turnover declared in Table 7F shall be specified here.

Part IV. Reconciliation of Input Tax Credit 32 Reconcile

12A. ITC availed as per audited financials 33 Single GSTIN (From 1st July 2017) ITC ledger to be taken from financials (both revenue and capitalized items) ITC availed to be considered whether it is utilized or not ITC reversals and reclaimed to be considered to arrive at ITC availed ITC to be collated from net of debits and credits of the ITC ledger ITC on reverse charge to be included ITC receivable not to be considered In case of single ledger for liability and ITC, suitable mechanism for derivation and assurance in the form of corroborative evidence to be taken

12A. ITC as per audited financials 34 CGST/SGST/IGST Sl No. Particulars Debit Credit 1 Opening Balance XXXX 2 Tax payable 3 Tax payable reversed (credit notes) 4 ITC Availed 5 ITC reversed 6 ITC reclaimed 7 Tax paid by cash ledger 8 Closing balance

12C. ITC booked in current FY to be claimed in later Fys (-) 37 All credits shown in FY 2017-18 in books but claimed in GSTR 3B of FY 2018-19 Credit which satisfies the conditions of eligibility in 2018-19 though booked in 2017-18 If shown in ITC receivable in books, it is not to be considered as booked Only if credit taken in the ITC ledger in books, it is to be considered All GSTR 2A transactions on which ITC not taken in 2017-18 not to be reported here

12D (Audited financials) vs 12E (Annual return) 38 12D. ITC availed as per audited financial statement or books of account ITC availed as per audited financial statement or books of account as derived from values declared in Table 12A, 12B and 12C above will be auto populated here 12E. ITC claimed in Annual return Net ITC Available for utilization as declared in Table 7J of Annual return (GSTR 9) shall be declared here

13. Reasons for unreconciled ITC 39 Particularly relevant statutory auditors have not reconciled with returns/ECL and return filers did not have a look at the books Whether credit is actually eligible or not is not to be checked in this table ITC as per books > ITC as per return (less crucial for Department) Recognition of accrued expenses with GST before time of supply Recognition of ITC at the time of receipt of advances Rightful eligible credits not availed in returns though in books and GSTR 2A for any reason (disputed, genuine, mistake etc.) Breakup of ineligible ITC shown in books ITC reversal or refund application claim not passed/incorrectly passed in books Receipt of excess credit from ISD as per books

13. Reasons for unreconciled ITC 40 ITC as per books < ITC as per return (more crucial for Department) Breakup of GST not shown in the expenses/capital goods ITC of another GSTIN claimed in returns ITC claimed based on GSTR 2A without actual incurring the expenses ITC incorrectly reported at a higher figure in returns ITC reclaimed or refund rejection claim not passed/incorrectly passed in books Duplicate ITC availed in returns ITC availed after the closure of books of accounts wherein no ITC was shown ITC claimed in return even though depreciation claimed on ITC in books Non reconciliation may be on account of incorrect filling up of Form GSTR 9

14. Recon of ITC in GSTR 9 with ITC availed on expenses as per books 41 Auditor’s responsibility to check eligibility of ITC availed unlike Table 12

14. Recon of ITC in GSTR 9 with ITC availed on expenses as per books 42

Expenses bifurcation 43 Auditor to declare all heads of expenses on which GST was paid/payable Heads can be added and deleted Expenses to be declared though GST not shown separately in books (calc challenge) Bifurcation of expenses into April to June 2017, July to March 2018, April to Sept 2018 Value to be declared in column 2 is also significant (taxable/invoice/books) Where multiple books are maintained for same GSTIN, all trial balances to be aggregated and matched with statewise ledger/financials Where single books maintained for multiple GSTIN, expenses to be separated based on GSTINwise trial balance Communication with other auditors and SA 299 relevant for exhaustive reporting Nature of Expenses can be tracked to check for reverse charge and ineligible credits

Amount of total ITC vs Eligible ITC Availed 44 AMOUNT OF TOTAL ITC ELIGIBLE ITC AVAILED All ITCs that should ideally appear in Form GSTR 2A Only those credits on which ITC is eligible Invoice may not be present Invoice has to be present Goods or services may not have been received during the relevant period Goods or services should have been received during the Returns may not have been furnished by recipient Returns should have been furnished by recipient Supplier may not have been paid during the relevant period and 180 days may have expired Supplier should have been paid during the relevant period if 180 days has expired from date of invoice Depreciation on the tax part may have been claimed Depreciation should not have been claimed on tax Total credit for business/non business to be taken Credit attributable to business purpose only ITC attributable to taxable/exempt supplies allowed ITC attributable to only taxable supplies allowed ITC blocked under Section 17(5) to be taken ITC should not have been blocked under 17(5) GSTIN of the recipient should be mentioned Ineligible ITC incorrectly availed to appear Ineligible ITC availed incorrectly not to be taken

14R (Audited financials) vs 14S (Annual return) 45 14R. Total amount of eligible ITC availed Total ITC declared in Table 14A to 14Q above shall be auto populated here 14S. ITC claimed in Annual return (GSTR 9) Net ITC availed as declared in the Annual Return (GSTR9) shall be declared here. Table 7J of the Annual Return (GSTR9) may be used for filing this Table.

15. Unreconciled ITC 46 All the differences as stated for Table 13 Incorrectly higher ITC availed in returns even though: Not in possession of proper tax invoice (e.g. GSTIN not mentioned) Non-receipt of goods or services or both Depreciation claimed on tax component Credit attributable to non business purposes / exempt supplies Payment not made to supplier within 180 days ITC blocked u/s 17(5)

16. Tax payable on unreconciled difference in ITC 47

Thank You 66 PRATIK SUDHIR SHAH CHARTERED ACCOUNTANT 9819122318 Email: pratiksh2704@gmail.com