The Central Goods and Services Tax Act, 2017 came into force on the 1st of July, 2017. The journey since then has been similar to a rollercoaster ride. There have been various updates to the structure and processes of the GST Law. Filing of GST Returns has gone through its own share of challenges and the annual return and the GST Audit is the last milestone, in completion of this journey of filing returns for FY 17-18.
Since this is the first year of filing the GST Audit, the due date was initially extended to June 30th, 2019.
The latest update has allowed businesses registered under GST to start filing their GST Audit reports for the fiscal year 2017-18.
Section 44 of the CGST Act, dealing with filing of GST Annual returns, requires assessees who are subjected to GST Audit, to submit the GST Audit Certificate along with annual return, due date being 30th June 2019.
The GST Audit provisions in Section 35 of the CGST Act, read with Rule 80 of CGST Rules, as per which every registered person with turnover exceeding Rs. 2 crores, shall get the GST accounts audited by a Chartered Accountant.
The format of GST Audit is prescribed in GSTR – 9C, which needs to be submitted along with the Annual Return GSTR – 9.
The main objective of a GST Audit is to prepare a reconciliation of the particulars declared in GSTR 9 – Annual return, with the audited financial statements.
Hence, as a first step, the taxpayer should be ready with their audited financial statements. The GST Audit Certificate needs to be obtained for each GSTN number of the taxpayers. Taxpayers would hence need to identify the figures appearing in the audited financial statements, at each GSTIN level. This may be a challenging task and even if such data is verified, it’s correctness needs to be verified with audited financial statements.
As a second step, the taxpayer needs to be ready with the draft annual return, which shall form the basis of the reconciliation for the GST Auditor.
Businesses with an annual turnover of over Rs 2 crore can now start filing GST audit reports for fiscal 2017-18 as GST Network (GSTN) has made its format available on its portal. The audit report for 2017-18, the first year of the goods and services tax (GST) implementation, is to be filed by June 30.
The ministry on December 31, 2018, notified the annual returns forms GSTR-9, GSTR-9A, and GSTR-9C. The GST Council in December extended the last date for filing these forms by three months to June 30.
GSTN has now made available offline utility of GSTR-9C which can be filled up by the taxpayer and uploaded on the portal. GSTR-9 is the annual return form for all taxpayers registered under GST, GSTR-9A is for composition taxpayers.
GSTR-9C is a reconciliation statement, duly verified and signed by a chartered accountant or a cost accountant, and required to be furnished along with the filing of annual return by the taxpayer whose turnover is above Rs 2 crore during a financial year.
Savage & Palmer Technical Head, Pinkesh Avlani said “This will be a great addition to the GST Network’s utility. All business owners should definitely use this to their advantage and start the GST audit process in April itself to avoid confusion at the last minute.”
A careful reading of GSTR 9 and GSTR 9C clearly indicates that the annual return and GST Audit is not a simple task of consolidation of monthly GST returns. There are new sets of information that need to be extracted by the taxpayer – the HSNwise summary, classification of input tax credit into inputs, expense head wise bifurcation of ITC availed and so on and so forth.
The timely addition of this function to the GST website allows business owners to start filing their Audit Reports for the last financial year well in advance. This will help in avoiding any kind of extensions when the deadline comes around.
Information Source: The Economic Times