GST Auditors! Don't Miss These Checkpoints While Filing GSTR 9C

GSTR 9C is an annual reconciliation statement to be filed by every registered person whose aggregate turnover for a financial year exceeds Rupees 2 crores (Section 35(5) read with Rule 80).

The due date for GSTR 9C for FY 2017-18 is 30th November, 2019 which has been constantly revised due to the complexities of the form.

In this article, let us understand certain GSTR 9C check points in detail with examples that will assist in simplifying GSTR 9C. However, one must understand that GSTR 9C is only a reconciliation statement of amounts and figures disclosed in the books of accounts.

1. Applicability of GSTR 9C - 

As mentioned above, GSTR 9C is applicable to those registered persons whose aggregate annual turnover exceeds INR 2 crores. Aggregate turnover is the aggregate value of all taxable values, exempt supplies, export of goods or services or both, inter-state supplies of the person having the same PAN (on all India basis), but excludes inward supplies liable to reverse charge, central tax, State tax, Union territory tax, integrated tax and cess.

It is critical to determine applicability of GSTR 9C. Any error may result in non-compliance of the same.

Note - For FY17-18, to determine aggregate turnover, period to be considered is July 2017 to March 2018.

Example 1 - 

ABC Ltd is having the following mentioned turnover in FY 2017-18.

Unit details	Taxable Turnover	Exempt Turnover	GST Audit Required?
Unit 1 of ABC Ltd - Maharashtra	Rs. 1.5 crores	Rs. 0.75 crores	Yes
Unit 2 of ABC Ltd - Gujarat	Rs. 10 lakhs	Rs. 80 Lakhs	Yes
Unit 3 of ABC Ltd - Karnataka	Rs. 0	Rs. 0	Yes

Example 2 - 

XYZ Ltd is having the following turnover for FY 17-18.

Particulars	Taxable Value	GST Audit Required?
Sale of Alcoholic Liquor for Human Consumption	Rs 1.90 crore	Yes
Rent from Commercial Property	Rs. 25 Lakhs

2. Classification of turnover in Table 5 - 

Table 5 requires reconciliation of turnover as per audited financial statements with that declared as per GSTR 9. There are certain incomes that form part of financial statements but are not reported in GST. One must be careful while classifying and reconciling income under various heads as required under GSTR 9C.

Example 3 - 

Mr. A is providing Custom House Agent Services. Let us see how his services will appear in GSTR 9C -

(in Rs)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Sales as per Audited Financial Statement	1.25 crores	9 lakhs	9 lakhs
2	Amount Recovered as Pure Agent	20 lakhs	-	-
3	Amount Recovered as Pure Agent, (but it doesn’t qualify criteria of Pure Agent Related Provisions)	5 lakhs	-	-
4	Turnover as declared in GSTR 9	1 crore	9 lakhs	9 lakhs

Sr. No 1 - Sales may be declared in Table 5A
Sr. No 2 - Amount recovered as pure agent may be declared in Table 5M
Sr. No 3 - This will not be reflected under Table 5 but will be shown under Table 6 as reconciled item.

Example 4 - 

A Ltd is a SEZ registered unit. Disclosure of turnover will be shown as follows -

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Export of Goods to USA under LUT	1 crores	-	-
2	Goods Supplied domestically, where DTA unit filed BOE	20 lakhs	-	-

Sr. No 1 - It will be part of Table 5A. Also it will be disclosed in Table 7C
Sr. No 2 - It will be part of Table 5A. Also It will be disclosed in Table 5K

Example 5 - 

X Ltd has made the following transactions during the year -

(in Rs.)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Profit on Sale of Fixed Asset	1 lakh	-	-
2	Sale value of Fixed Asset	10 lakhs	0.9 lakhs	0.9 lakhs

Sr. No 1& 2 - It will be disclosed as adjustment in Table 5O

Example 6 - 

Mr. A imports goods. In case of imports, he makes the following transactions -

(in Rs.)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Goods Supplied on High Seas Sales Basis	20 lakhs	-	-
2	Sale of imported Goods	1 crore	9 lakhs	9 lakhs
3	Total Sale as per Audited Financial Statement	1.2 crore	9 lakhs	9 lakhs

Sr. No 1 - Goods supplied on HSS, will be disclosed in Table 5A and also in Table 7B
Sr. No 2 - It will be form part of Table 5A. No separate disclosure required
Sr. No 3 - It may be declared in Table 5A

3. Advances received against Supply of Goods or Services - 

GST was payable on advance received against supply of goods or services. However, in the case of goods two exemption notifications were issued - Notification No 40/2017 dated 13th October, 2017 (for registered taxpayers having turnover below Rs. 1.5 crores) and Notification No 66/2017 dated 11th November, 2017 (for all registered taxpayers) wherein no GST is required to be paid on advance received against supply of goods.

No exemption is available if advance is received against supply of services.

Example 7 - 

GST on Advance received against supply of Goods (Case where Notification No 40/2017 CT dated 13th Oct 2017, is applicable)

(in Rs.)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Advance received on 1st Aug 2017	20 lakhs	1.8 Lakhs	1.8 Lakhs
2	Advance received on 25th Aug 2017	10 Lakhs	0.9 Lakhs	0.9 Lakhs
3	Advance received on 1st Oct 2017	10 Lakhs	-	-
4	Advance received on 25th Jan 2018	30 Lakhs	-	-
5	Invoice raised on 1st Mar 2018, with respect to 1st Advance	30 Lakhs	Balance Amount	Balance Amount
6	Invoice raised on 1st May 2018, with respect to 2nd , 3rd and 4th Advance	60 Lakhs	Balance Amount	Balance Amount

Sr. No 1 - No separate reporting, as invoice is raised during the same year.
Sr. No 2 - It will be disclosed in Table 5C
Sr. No 3 - For non payment of GST, auditor should recommend interest liability at Part V
Sr. No 4 - No reporting required as it is exempted

Example 8 - 

GST on Advance received against supply of Goods (Case where Notification No 66/2017 CT dated 11th Nov 2017, is applicable

(in Rs.)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Advance received on 1st Aug 2017	20 lakhs	1.8 Lakhs	1.8 Lakhs
2	Advance received on 25th Aug 2017	10 Lakhs	0.9 Lakhs	0.9 Lakhs
3	Advance received on 1st Oct 2017	10 Lakhs	-	-
4	Advance received on 14th Oct 2017	30 Lakhs	-	-
5	Invoice raised on 1st Mar 2018, with respect to 1st Advance	30 Lakhs	Balance Amount	Balance Amount
6	Invoice raised on 1st May 2018, with respect to 2nd , 3rd and 4th Advance	60 Lakhs	Balance Amount	Balance Amount

Sr. No 1 - No separate reporting, as invoice is raised during the same year.
Sr. No 2 - It will be disclosed in Table 5C
Sr. No 3 and 4 - For non payment of GST, auditor should recommend interest liability at Part V

Example 9 - 

GST on advance received against supply of services

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Advance received on 1st Aug 2017	20 lakhs	1.8 Lakhs	1.8 Lakhs
2	Advance received on 25th Aug 2017	10 Lakhs	0.9 Lakhs	0.9 Lakhs
3	Advance received on 1st Oct 2017	10 Lakhs	-	-
4	Advance received on 12th March 2018	30 Lakhs	-	-
5	Invoice raised on 1st Mar 2018, with respect to 1st Advance	30 Lakhs	Balance Amount	Balance Amount
6	Invoice raised on 1st May 2018, with respect to 2nd , 3rd and 4th Advance	60 Lakhs	Balance Amount	Balance Amount

Sr. No 1 - No separate reporting, as invoice is raised during the same year.
Sr. No 2 - It will be disclosed in Table 5C
Sr. No 3 and 4 - For non payment of GST, auditor should recommend interest liability at Part V

4. Unbilled Revenue - 

There are certain incomes which have been recognised as income in the books of accounts on accrual basis but not reflected in GST. Such income is known as unbilled revenue.

For FY 2017-18, one has to be careful while reporting under this section as total unbilled revenue as on 01st April 2017 is not to be considered as an adjustment is required for invoices booked during the period April 2017 to June 2017. Thus, unbilled revenue as at 30th June 2017 is to be considered.

Example 10 - 

A Ltd has reported unbilled revenue as at 01st April 2017 - Rs 10 Lakhs

During April 2017 to Jun 2017 invoice issued against such unbilled revenue- Rs 3 Lakhs

Unbilled revenue at the beginning of the year to be reported in Table 5B - Rs 7 Lakhs (10 minus 3)

5. Deemed Supply under Schedule I - 

Under Schedule I certain supply have been treated as deemed supply even if no consideration has been on such supplies. Supplies covered under Schedule I are as follows -

a. Supplies made to related parties
b. Supply of goods via Agent
c. Permanent transfer or disposal of asset where no consideration has been received but input tax credit was availed’

Such supplies are to be reported in Table 5D and may not be added in Table 5A.

Example 11 - 

A Ltd has made the following transactions -

(in Rs.)

Sr. No	Particulars	Value	GSTR 9C Reporting
1	Sales of goods	10 Lakhs	Table 5A
2.	Asset disposed	5 Lakhs	Table 5D
3.	Branch Transfer	2 Lakhs	Table 5D

6. Other Income and Recovery - 

Let us understand how various incomes other than sales and recoveries made be treated under GSTR 9C.

Example 12 - 

(in Rs.)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	Sales	1 Crore	9 Lakhs	9 Lakhs
2	Interest Income on FD	1 Lakh	-	-
3	Dividend Received	2 Lakhs	-	-
4	Canteen Recovery from Employee - deducted from Canteen Expenses	0.5 Lakhs	-	-
5	Interest received from Customer for late payment	0.25 Lakhs	-	-
6	Penalty Amount received from Supplier, as per contract terms, for Non-performance of partivity	1 Lakh	-	-

Sr. No 1 - It will be reported in Table 5A
Sr. No 2 & 3 - It may be disclosed at Table 5O, if said amount is already included in Sr. No 5A. If it is not disclosed in Table 5A, the same may not be reported in Table 5O
Sr. No 4,5 and 6 - It may be disclosed at Table 5O by adding the values, then it will reconciliation item on which there will be additional liability at Table 6.

Else auditor can disclose additional liability on the same in Part V

7. Input tax credit - 

It is important to verify tax availed as per books of accounts, GSTR 2A and GSTR 3B is in line with each other. Auditor may come across such instances where excess credit has been in GSTR 3B but the same has not been booked in books of accounts, ineligible credit has been availed or reversals required have not been made as per Rules. In such cases, the auditor may show this amount as additional liability payable.

However, any input tax credit not availed till the specified time limit shall lapse i.e. for FY17-18, input tax credit could have been claimed upto filing of March 2019 return.

Example13 - 

Input tax credit - Wrongly availed.

(in Rs)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	ITC availed in F.Y. 17-18. Later, taxpayer has identified some wrong ITC of 17-18 and reversal done in May 18 Return		0.5 Lakhs	0.5 Lakhs
2	ITC availed in F.Y. 17-18. During GST Audit, auditor observed wrong ITC is claimed in Nov 18. Disclosure is not made for the same, in any return upto Nov 18		1 Lakh	1 Lakh

Sr. No 1 - No separate reporting is required as the taxpayer has already made the reversal. However auditor should recommend Interest liability at Part V
Sr. No 2 - Auditor should disclose additional liability of wrong ITC in Part V

Example 14 - 

Input tax credit - Payment to creditor within 180 days

(in Rs)

Sr No	Particulars	Value	CGST Paid	SGST Paid
1	ITC availed in July 2017	10 lakhs	0.5 Lakhs	0.5 Lakhs
2	Out of the above payment made to supplier upto Mar 18	8 lakhs
3	Balance amount paid in Nov 18	2 Lakhs

Sr. No 3 - Auditor should disclose additional liability / Interest in Part V

Example 15 -

ITC - Auditor observed below Credit availed by taxpayer in Books as well as GSTR Return upto Mar 18. What to do

Sr. No	Particulars	CGST	SGST
1	Food	5,000	5,000
2	Works Contract	25,000	25,000
3	Purchase of Car	90,000	90,000
4	Factory Insurance	30,000	30,000
5	Employee Insurance (not specified by law)	225,000	225,000

Sr. No 1, 2, 3 and 5 - It is blocked credit as per Sec 17(5). It is to be reported as additional liability by Auditor in Part V of GSTR 9C

Conclusion -

These are certain points one should take care while reconciling values under GSTR 9C. Situations under GSTR 9C are such that may vary business to business - what may be applicable to one business, may be ineligible to other. Thus, careful interpretation of terms according to business should be done.

There are multiple software available in the market which provides multiple tools to ease GSTR 9C preparation and filing. GST Hero is one such software, it is a government of India appointed GST Suvidha Provider and is also a cloud-based multi-user software with a smoother GST Filingmechanism. GSTHero provides a Free Tally TCP Tool that enables easy preparation of GSTR 9C. Get this connector to make your GSTR 9C Filing Simpler and easier with GSTHero.

End Note - 

GSTHero is a government of India appointed GST Suvidha Provider and is also a cloud-based multi-user software with a smooth mechanism to work together with an advanced ITC reconciliation feature that will provide you and your clients an automated tool to handle ITC reconciliation and also open up a list of new service avenues for your tax practice.

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It is harmful not only for the interest of stakeholders connected with the company but also to the economy as a whole.

PROVISIONS OF NEW RULES

Having been discussed about reasons behind appointment of ineligible person as independent directors now we shall discuss the Provisions of new rules:

The New rules introduces amendments to Companies (Appointment and Qualification of Directors) Rules,2014,Companies(Accounts)Rules, 2014 and introduction of Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019.

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Amendment to Companies (Appointment and Qualification of Directors) Rules, 2014

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---

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Steps to generate e-invoice under GST

Background: GST Council in its 37^thCouncil meeting held on 20 September 2019 approved the standard of E-Invoice and it has been publish on GST portal along with scheme.

What is E-Invoice?

E-Invoicing is a process in which all the B2B invoices created by accounting software will be authenticated electronically by GSTN for further use (like return preparation, E-way bill creation).

There are lot of myth or misconception about e-invoice. E-Invoice does not mean generation/creation of invoices from central portal or tax department because practically it is not possible it will create unnecessary restrictions on trade and industry and different industry have different business requirement, which cannot be met out by one software.

E-Invoice is a submission of already generated Invoices from accounting softwares to GST Portal and we all are aware that there are hundreds of accounting & billing softwares, which generate invoices, but they all use their own formats to store information electronically and data in such different-different formats cannot understand by the GST System, hence it was not possible to submit the data from accounting softwares (Like ERP/Tally/SAP) to GST System.

So, need was felt to issue a standard format (Schema) in which data will be shared with other systems, although from user prospective it's same as earlier, there would not any change in print or electronically creation of invoice.

Only standard schema needs to be implemented by all the accounting and billing software so that it can generate JSON of each invoice in such format which can be uploaded on GST Portal for further authentication and approval.

In short, E-Invoice is mechanism only specify invoice schema and standard for each data exchange among all accounting/billing software and all businesses.

E-invoice format issued by GSTN have some mandatory fields and some non-mandatory fields

Benefits on E-Invoicing System

1. One time reporting of B2B invoices and further authentication from GST Portal will auto prepare ANX-1, ANX-2 in new return format and GSTR-1 in current format up to B2B Supplies.
2. E-way Bill will also be created through E-Invoicing data only vehicles details needs to be updated.
3. Here once invoice which will be uploaded by supplier on GST system for authentication will be further shared with corresponding buyer on his mail id mentioned on e-invoice, hence buyer can do reconciliation with his purchase order and accept/reject on real time under New Return.
4. System level matching will be done for input credit and output tax.
5. E-Invoice will be created for Invoices, Debit Note, Credit Note and other document required by law.

Process of creation of E-Invoicing:
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Accountants holding Certificate of Practice (CoP) are not allowed to list themselves and their services with Online Service Provider Aggregators: ICAI

The Institute of Chartered Accountants of India ( ICAI ) has banned its member holding Certificate of practice (CoP) to list themselves and their services with Online Service Provider Aggregators. In an announcement by ICAI said that, It has come to the notice of the Institute that members in practice are listing with certain online Application based service provider Aggregators, wherein other businessmen, technicians, maintenance

Govt to introduce online proficiency assessment test for independent directors

*MCA UPDATE*
1. *The Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019*:
MCA has issued the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 for amending Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by providing *Compliances required by a person eligible and willing to be appointed as an Independent Director* vide its Notification dated October 22, 2019.
Link of Notification:

You can save tax on up to Rs 17,000 savings account interest: Here's how

Chartered Accountant Naveen Wadhwa, DGM, Taxmann.com says, "Section 10(15)(i) of the Income-tax Act, 1961, provides exemption in respect of interest, premium on redemption or other payment on certain deposits notified by the central government in this behalf. The government through notification number SO 1296(E), dated 3-6-2011, has prescribed that interest on post office saving account is exempt to the extent of Rs 3,500 in case of an individual account and Rs 7,000 in case of a joint account. Sections 80TTA and 80TTB

IRCTC to pay around Rs 1.62 lakh as compensation for late running of Tejas Express

Since it began commercial operations from October 6 for six days a week, the train has maintained a tight schedule. Under IRCTC's policy, an amount of Rs 100 will be paid in case the delay is for over an hour & Rs 250 for delay of over 2 hours.

A delay of more than three hours in the running of Delhi-Lucknow Tejas Express on October 19 has cost IRCTC around Rs 1.62 lakh which the railway subsidiary will pay through its insurance companies as compensationto around 950 passengers, a first in the history of Indian Railways, officials said on Monday.

The train started from Lucknow at around 9.55 am instead of its scheduled departure at 6.10 am and reached New Delhi at around 3.40 pm instead of 12.25 pm. It departed from New

A forensic audit of Dewan Housing Finance Corporation (DHFL) has found diversion of funds worth Rs 20,000 crore

A forensic audit of Dewan Housing Finance Corporation (DHFL) has found diversion of funds worth Rs 20,000 crore to private entities of the promoters, reports Moneylife.

The audit, carried out by KPMG, reveals that the funds were

This is how PMC Bank fraud is linked with DHFL, HDIL, PRAFUL PATEL AND IQBAL MIRCHI

➡PMC Bank gives loans to HDIL
➡HDIL is promoted by DHFL
➡DHFL Director's brother is director of Sunblink

MCA amends rules to allow Companies to comply with KYC norms

The Ministry of Corporate Affairs (MCA) has amended what is called the Rule 25A, to allow companies to make a filing about their directors and become compliant. The decision came in as a relief for companies that were marked ACTIVE non-compliant.

Oct 22, 2019, 10.08 AM IST

New Delhi: In a relief to companies that had been rendered inactive after they failed to comply with the know-your-customer rules, the government has given

Law Offices of Howard G. Smith Announces Investigation on Behalf of Infosys Limited Investors

Law Offices of Howard G. Smith announces an investigation on behalf of Infosys Limited (“Infosys” or the “Company”) (NYSE: INFY) investors concerning the Company and its officers’ possible violations of federal securities laws.

On October 21, 2019, Infosys disclosed that it had received whistleblower complaints alleging “unethical practices” by the Company’s management to inappropriately boost short-term revenue and profit. Moreover, the complaints alleged that the Company’s Chief Executive Officer, Salil Parekh, bypassed reviews and approvals of large contracts to avoid accounting scrutiny.On this news, the Company’s stock fell as much as $1.29, or over 12%, during intraday trading on October 21, 2019, thereby injuring investors.

If you purchased Infosys securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or

Whistleblower accuses Infosys of ‘unethical’ practices to boost numbers

An anonymous group calling itself “ethical employees” has complained to the board of Infosys and the US Securities and Exchange Commission (SEC) alleging that the company is taking ‘unethical’ steps to boost short-term revenue and