1 / 48

Part B -Certification

This article explains the provisions, requirements, and process for GST audit and reconciliation statement certification under Section 35(5) and Section 44(2) of the CGST Act. It also addresses the lack of clarity on certain matters and provides an illustration of aggregate turnover. The article includes an overview of Form GSTR-9C and the certification process.

paulkim
Download Presentation

Part B -Certification

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Part A - Reconciliation Part B -Certification

  2. Relevant Provisions- Section35(5) Every registered person whose turnoverduring 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 sub-section(2) of section 44 and such other documents in such form and manner as may be prescribed. 2

  3. Relevant Provisions- Section 44(2): Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (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. 2

  4. Relevant Provisions- Rule 80(3) Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub- section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner. 2

  5. Sec. 2(6) of the CGST Act: Aggregate Turnover

  6. Sec. 2(112) of the CGST Act: Turnover in State

  7. Lack of clarity on certain matters 2

  8. Lack of clarity on certain matters 2

  9. Aggregate Turnover - Illustration • A company has 3 branches in different states, each having separate GST number and with a turnover of: • Rs. 1.50 crore(exempt supply); • Rs. 25 lakh(taxable supply); and • Rs. 50 lakh(taxable supply),  respectively. • Whether liable for audit? Such company will be liable for GST audit since its aggregate turnover exceeds Rs. 2 crore.

  10. GSTR 9C – OVER VIEW OF STRUCTURE

  11. Form GSTR 9C PART – B- CERTIFICATION I. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by the person who had conducted the audit: I/we have examined the— (a) balance sheet as on ……… (b) the profit and loss account/income and expenditure account for the period beginning from ………..…to ending on ……., and (c) the cash flow statement for the period beginning from ……..…to ending on ………, attached herewith, of M/s …………… (Name), …………………….………… (Address), ..…………………(GSTIN). 2. Based on our audit I/we report that the said registered person— has maintained the books of accounts, records and documents as required by the IGST/CGST/GST Act, 2017 and the rules/notifications made/issued thereunder . Compliance with Sec 35 is mandatorily asked for Cash flow statement is mentioned. In case of non corporate persons, exception will have to be given

  12. has not maintained the following accounts/records/documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3. 3. (a) I/we report the following observations/ comments / discrepancies / inconsistencies; if any: ……………………………………. ……………………………………. 3. (b) I/we further report that, - (A) I/we have obtained all the information and explanations which, to the best of my/our knowledge and belief, were necessary for the purpose of the audit/ information and explanations which, to the best of my/our knowledge and belief, were necessary for the purpose of the audit were not provided/partially provided to us.

  13. (B) In my/our opinion, proper books of account have/have not been kept by the registered person so far as appears from my/ our examination of the books. (C) I/we certify that the balance sheet, the profit and loss/income and expenditure account and the cash flow Statement are in agreement/not in agreement with the books of account maintained at the Principal place of business at ……………………and ……………………additional place of business within the State. 4. The documents required to be furnished under section 35 (5) of the CGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act is annexed herewith in Form No. GSTR-9C. 5. In my/our opinion and to the best of my/our information and according to explanations given to me/us, the particulars given in the said Form No.GSTR-9C are

  14. are true and correct subject to following observations/qualifications, if any: (a) …………………………………………………………………………………… (b) …………………………………………………………………………………… (c) …………………………………………………………………………………… ……………………………………… ……………………………………… **(Signature and stamp/Seal of the Auditor) Place: …………… Name of the signatory ………………… Membership No……………… Date: …………… Full address ……………………

  15. Form GSTR 9C PART – B- CERTIFICATION II. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by a person other than the person who had conducted the audit of the accounts: I/we report that the audit of the books of accounts and the financial statements of M/s. ………...........…………………. (Name and address of the assessee with GSTIN) was conducted by M/s. …………………………………………..………. (full name and address of auditor along with status), bearing membership number in pursuance of the provisions of the …………………………….Act, and I/we annex hereto a copy of their audit report dated ……………………………. along with a copy of each of :- (a) balance sheet as on ……… (b) the profit and loss account/income and expenditure account for the period beginning from ………..…to ending on …….,

  16. (c) the cash flow statement for the period beginning from ……..…to ending on ………, and (d) documents declared by the said Act to be part of, or annexed to, the profit and loss account/income and expenditure account and balance sheet. 2. I/we report that the said registered person— has maintained the books of accounts, records and documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder has not maintained the following accounts/records/documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3.

  17. 3. The documents required to be furnished under section 35 (5) of the CGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act is annexed herewith in Form No.GSTR-9C. 4. In my/our opinion and to the best of my/our information and according to examination of books of account including other relevant documents and explanations given to me/us, the particulars given in the said Form No.9C are true and correct subject to the following observations/qualifications, if any (a) …………………………….…………………………….……………………… (b) …………………………….…………………………….……………………… (c) …………………………….…………………………….……………………… (Signature and stamp/Seal of the Auditor) Place: …………… Name of the signatory ………………… Membership No……………… Date: …………… Full address …………………… • True and fair view is not the objective • Reconciliation is to be certified. • Start point and end point are not certified. No determination of turnover as in the case of VAT reports

  18. FORM GSTR-9C See rule 80(3) PART – A - Reconciliation Statement The details for the period between July 2017 to March 2018 are to be provided in this statement for the financial year 2017-18. The reconciliation statement is to be filed for every GSTIN separately.

  19. Reconciliation of gross turnover in AFS with GSTR 9 (Amount in ₹ in all tables) • Certificate from auditor • Management representation • What if totals do not add up

  20. Reconciliation of gross turnover in AFS with GSTR 9 (Amount in ₹ in all tables) • Rental income • Landline charges • Services to be invoiced in next month • Transfer of assets, where ITC is taken • Supply between related/distinct persons- agents, employees, stock transfers • Service import from a related person

  21. Reconciliation of gross turnover in AFS with GSTR 9 • Credit notes issued after financial year but included in table 9B of GSTR 1, relating to invoices issues during the financial year • Transactional Entry wrongly posted in the Books, return filed and mistake noted in the next year • Book is correct, return is wrong and this error is noticed next year • Books and return are correct. Additional knowledge calling for adjustment

  22. Reconciliation of gross turnover in AFS with GSTR 9 (Amount in ₹ in all tables)

  23. Reconciliation of gross turnover in AFS with GSTR 9 • Construction contracts where materials are supplied by awarder, though contractor is responsible • Incidental charges like transportation not accounted as income • Valuation rules adjustments

  24. Reconciliation of gross turnover in AFS with GSTR 9 2 types; one at the time of supply; other at the time of realisation of proceeds The turnover arrived at Sl.No.5P shall comprise of the following: (a) taxable turnover of outward supply of goods and / or services; (b) Exempt turnover of outward supply of goods and / or services; (c) Non-GST outward supplies turnover; (d) Exports of goods and / or services turnover; (e) Outward supplies liable to GST under reverse charge mechanism.

  25. Reconciliation of gross turnover in AFS with GSTR 9 Amounts shown in financials, but (a) Sales omitted in return; (b) Fixed asset sales not shown in return; (c) Turnover excess reported in return (d) Duplication in turnover reported in return

  26. Reconciliation of taxable turnover [The table provides for reconciliation of taxable turnover from the audited annual turnover after adjustments with the taxable turnover declared in annual return GSTR-9] • Milk, water, educational and health services • Non taxable supplies such as petrol, alcohol for human consumption • No supplies like sale of land, betting and gambling • If supplied by paying tax, such transaction not to be included

  27. Reconciliation of taxable turnover

  28. Reconciliation of taxable turnover Amounts shown in financials, but (a) Sales omitted in return; (b) Fixed asset sales not shown in return; (c) Turnover excess reported in return (d) Duplication in turnover reported in return (e) RCM inward supplies

  29. Part III - Reconciliation of tax paid

  30. Reconciliation of tax paid

  31. Reconciliation of tax paid

  32. Reconciliation of tax paid Amounts shown in financials, but (a) Sales omitted in return; (b) Fixed asset sales not shown in return; (c) Turnover excess reported in return (d) Duplication in turnover reported in return (e) Exempt supply wrongly reported as taxable supply (f) 12% supply wrongly reported as 18% supply

  33. Additional amount payable

  34. Additional amount payable

  35. Flow of difference through different tables 7A START 5 P 5 R Omissions/Errors Legally required adjustments 5P adjustment Taxable, zero rated,exempt Omissions/Errors 7E 9R 9P Taxable TO Taxable TO Paid Zero rated, exempt TO Rate diff. Not Paid RCM diff. END

  36. Reconciliation of Input Tax Credit • Transitional credit of already taken credits will not come here but will come under 12A

  37. Reconciliation of Input Tax Credit

  38. Reconciliation of Input Tax Credit • ITC claimed in next year • Rule 42, 43 reversals not correctly given in GSTR 9 • ITC lapsed • ITC on another GSTIN claimed in GSTR 9

  39. Reconciliation of Input Tax Credit

  40. Reconciliation of Input Tax Credit

  41. Reconciliation of Input Tax Credit • Only eligible amounts to be include here • The total of this clause in column 4 should be equal to 12A

  42. Reconciliation of Input Tax Credit • Ineligible ITC availed • ITC in books availed in the next year

  43. Reconciliation of Input Tax Credit

  44. Recommendation on additional liability

  45. Recommendation on additional liability

  46. Recommendation on additional liability • Schedule I supplies not disclosed in GSTR 9 • Advances received not disclosed in GSTR 9 • All supplies which are not part of turnover and are missed out in GSTR 9

  47. Verification I hereby solemnly affirm and declare that the information given herein above is true and correct to the best of my knowledge and belief and nothing has been concealed there from. **(Signature and stamp/Seal of the Auditor)

  48. Thank You For any Clarification, Please Contact Email: raj@rajandmat.in; Mob. 9847032937 CA. Rajasekharan V FCA.

More Related