Arjuna (Fictional Character): Krishna, When is GST Audit applicable?
Krishna(Fictional Character): Arjuna, GST Audit for FY 2017-18 is applicable to every registered person whose aggregate turnover during a financial year exceeds Rs. 2 Crores. The copy of audited annual accounts and a reconciliation statement is to be furnished while filing GSTR-9C.
Arjuna: Krishna, What is aggregate turnover?
Krishna: Arjuna, As per section 2(6) of CGST Act, 2017 'aggregate turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
For ex- Mr. X sells cereals of Rs. 1.9 Crore during the year which is exempt from GST. However, Mr. X also supplies jute bags along with cereals and charges GST on it separately. His turnover from the sale of jute bags is Rs. 12 Lakhs which is taxable under GST. Thus his taxable turnover is only Rs. 12 Lakhs. But his aggregate turnover amounts to Rs. 2.02 Crores and thus GST Audit is applicable to Mr. X as aggregate turnover includes exempt sales also.
Arjuna: Krishna, What is the due date for filing GSTR-9C?
Krishna: Arjuna, the due date for filing GSTR-9C is 30 June, 2019.
Arjuna: Krishna, Will the taxpayer be allowed to file GSTR-9C if taxpayer have not filed annual return?
Krishna: Arjuna, No, GSTR-9C can be filed only after filing the annual return ie GSTR-9.
Arjuna: Krishna, What details are to be given in GSTR-9C?
Krishna: Arjuna, on the basis of details to be provided GSTR-9C can be divided in two parts ie Part A and Part B. In Part A reconciliation of outward supplies and ITC as per audited Annual Financial Statement with details of Annual Return is to be given. Part B deals with certification of GST Audit Report.
Arjuna: Krishna, What details relating to outward supplies are to be given in GSTR-9C?
Krishna: Arjuna, reconciliation of turn-over declared in Annual Financial Statements with turn-over declared in Annual Return is to be given in GSTR-9C. The details of reconciliations to be provided are as follows:
- In Table 5, the reconciliation of gross turn-over is to be given and also reasons in case of unreconciled gross turn-over is to be given in Table 6.
- In Table 7, the reconciliation of taxable turn-over is to be given and also reasons in case of unreconciled gross turn-over is to be given in Table 8.
- The reconciliation of rate-wise tax liability is to be provided in Table 9.
Arjuna: Krishna, What details relating to ITC are to be given in GSTR-9C?
Krishna: Arjuna, reconciliation of ITC declared in Annual Return with ITC availed in Annual Financial Statements is to be provided. In GSTR-9C, expense head-wise details of ITC availed is to be provided.
Arjuna: Krishna, What is responsibility of auditor while furnishing Part B of GSTR-9C?
Krishna: Arjuna, GST Auditor has responsibility to report about the observations or inconsistencies; if any. The auditor is not only responsible for observations and comments but also in respect of discrepancies and inconsistences regarding claim of exemption, classification, valuation, ITC etc.
Arjuna: Krishna, What one should learn from this?
Krishna: Arjuna, This audit report shall be the first audit report since the implementation of GST. There has been many errors and omission while filing the returns. So, the taxpayer should correctly report the amendments made in the subsequent financial year. Auditor has crucial role to play being the first GST Audit. Taxpayer would have to face and resolve technical as well as legal problems. Also the Government should consider giving relaxation in the GST Audit form as well as it’s due date.
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