Valid For taxpayers whose annual aggregate turnover is above 5 Crores For FY 2020-21, 2019-20 & 2018-19 and for FY 2017-18 it was more than 2 Crores only. GSTR 9C is now a Self-Certified form From FY 2020-21 onwards before that it was an audit form for taxpayers. Now Taxpayer may self certify his/her annual account and furnish all the relevant documents with a reconciliation of gross turnover under form GSTR 9C ( Previously they have to get their annual account audited by the CA and furnish all the relevant documents with a reconciliation of gross turnover under GSTR 9C Audit form)
All the information mentioned in FORM 9C is validated under point 5
Understanding Part II of GSTR 9C, the auditor must report taxes a taxpayer is entitled to pay or any suspected knowledge that he finds during an audit.
Step to File Reconciliation of Gross Turnover (Clause 5A to 5O) of Form GSTR 9C
Clause 5A – Aggregate Annual Turnover of the Taxpayer shall be declared
The annual turnover of the taxpayer has to be acknowledged by the concerned auditor under clause 5A. While mentioning the turnover, the auditor must also furnish the details of indirect income in the form of dividends, interest (from banks or any other source), profit or sale of assets, forex, fluctuation, etc.
A taxpayer must acquire:
- Audited financial statements to confirm the total annual turnover and
- Filed GST returns to match the turnover stated in the returns with the turnover in the audited financial statements.
Clause 5B – Unbilled revenues or accrued revenue in the starting of FY shall be declared
The clause is for the auditor to mention all the unbilled revenue or accrued revenue for the beginning of the year. Unbilled revenue is noted in the accounts but is not billed. Also, the unbilled revenue recorded on the basis of the accrual system in the previous financial year for which the invoice is generated under GST Laws should also be reported here. Such revenues should be mentioned because GST on them is payable in the current FY.
Applicable to services only, the revenue will come under “UNADJUSTED ADVANCES”.
Clause 5C – Advances Received from the customer shall be declared
The clause is for the ‘Advances Received‘ from the customer. Advances are the payments received before the supply of goods or services. As per GST laws, the tax will be charged on the invoices for such advances.
| Include | Reason |
|---|---|
| Advance received for services as on 31st March 2018 | Revenue not recognized in books, but offered to tax for GST |
| Advance received for Goods before 15th Nov 2017 and the supply of goods not complete as on 31st March 2018 | Revenue not recognized in books, but offered to tax for GST |
Clause 5C is valid for advances on which GST is paid but is not mentioned as revenue or sale in audited Account Financial Statements. Such advances shall be declared here. Even if it is not mentioned in GSTR 1 and GSTR 9, it can be mentioned as turnover here.
Clause 5D – Deemed or assumed supplies shall be declared here
The clause is to record the businesses that are not reported in account financial statements but are reported while filing income tax returns. Such are considered as deemed or assumed supplies under GST laws. Any deemed supply which is already mentioned in the audited financial statements shall not be re-written in the clause.
Below is the list of Deemed Supplies (Assumed Supplies):
- Assets donated, assets redeemed while shutting down the entire plant, deterioration of any asset, assets with a proprietor after its effective span is over (only if ITC is claimed on above assets).
- Supply of goods or services between two individuals. Gifts below Rs. 50,000 from an employer to his employee will not come under the premises of goods and service supplies.
- Services obtained by a taxpayer from any of his establishments outside India for further business in the country.
Clause 5E – Details of ‘Credit Note’ shall be declared here
The clause is for the credit notes (the notes of the returned supplies by the customer) issued after 01-04-2018 (new FY) – reported in FY 2018-19 but mentioned in GSTR 9 (GST Annual Return) of FY 2017-18 The credited amount will be added to the turnover to reconcile it with the GSTR-9. The credit note is for the supplies accounted for in FY 2018-19.
Clause 5F – Discounts on trade shall be mentioned here
The clause is for the discounts on trade that were mentioned in the audited financial statements of the taxpayers but which are not legitimate as per the VALUATION RULES under GST (GST was supposed to be imposed).
Discounts permissible under GST are:
- Discounts visible on the invoice will automatically be deducted from the amount of supply.
- If the discount is mutually agreed upon between the customer and the seller but is not mentioned in the invoice.
- ITC attributable to the discount will be reversed by the Recipient.
Discounts can be availed in many ways like in lieu of the long term business relations or the bonus discount on the purchases beyond the particular target.
Clause 5G – Quarterly Turnover shall be declared here
The clause is for the quarterly turnover from (April 2017 to June 2017) mentioned in the audited financial statement.
Clause 5H – Unbilled Revenues for the end of the Year shall be declared here
Unbilled Revenues were reported in the current FY but GST is not applicable in the same financial year. For instance: Unbilled revenues recorded in the account statements of Financial Year 2017-18 ( based on accrual system) will also be mentioned in GSTR 9C of Financial Year 2018-19, for such unbilled revenue GST has to be paid in FY 2018-19.
Also, such unbilled revenue will not be included in the turnover of FY 2018-19 because it is not mentioned in GSTR 9 filed by the taxpayer.
Clause 5I – Advances on which GST is not been paid shall be declared here
The clause is for the advances paid by the customer on which GST is not been paid by the seller in the same financial year and the value is mentioned as the revenue in the audited annual financial account.
Clause 5J – Credit Notes accounted in financial statements but are Non-GST shall be declared here
The clause is for the credit notes accounted in the audited financial statements but are not permissible under Section 34 of the CGST Act. These Non-GST Credit Notes which will reduce the turnover value shall be declared under Clause 5J. In Short, these Non-GST credit notes will reduce the turnover but is also not filed in the GST returns.
Clause 5K – Supply of value from SEZ to DTA shall be declared here
The clause is for the supply of values from SEZ (Special Economic Zones) to DTA (Department of Treasury and Accounts). DTA units are responsible to file a bill of entry for all such goods received from SEZ which will also be declared under clause 5K. Such supplies will not be mentioned in the GST returns of SEZ (as the imports are already mentioned by DTA). Such transactions will be recorded as ‘sale’ in the audited Financial Statements of SEZ but as they are not included in GST returns, they need to be deducted from the turnovers mentioned in the financial statements.
Clause 5L – Turnovers of the taxpayers under the composition scheme shall be declared here
There are instances when taxpayers are registered under GST as ‘composition taxpayers’ during the current financial year. The turnover revealed in the audited annual financial statements should be recognized under both composition schemes as well as normal turnover. In this case, GST paid under the composition scheme will be declared under clause 5L.
Clause 5M – Any adjustments in turnover as per Section 15, shall be declared here
The clause is for the turnover reported in the audited financial statements and is mismatched to the turnover reported in GSTR 9 because of the difference in the value of supply.
The transaction value will be considered as Value of Supply only if the customer and seller are not related to each other and the sole basis of the transaction is price.
If the supply value is considered to be the transaction value, there are other requirements for the purpose of calculating ‘Value’ on which GST needs to be paid. Such examples are Duties, taxes, fees, cesses, imposed under any other law apart from this Act. Incidental expenses, including commission and packing and freight (charges on bulk sale) charged by the seller to the recipient.
Clause 5N – Turnovers from Foreign Exchange Transactions shall be declared here
The clause is valid for Forex Transactions (Foreign Exchange transactions) i.e. adjustments in turnover due to foreign exchange fluctuations. Forex Transactions mentioned in the books of accounts are based on the RBI reference rate. But CGST filing requires a reference rate decided by CBIC notifications and circulars. The difference between the RBI reference rate and the CBIC reference rate is mentioned under this clause. In case if the amount mentioned in the audited financial statement does not match the actual amount received, the difference in the amount will be considered as Forex Gain/loss.
Clause 5O – Additional clause for reporting turnover adjustment due to reasons not mentioned above shall be declared here.
The additional clause is for reporting the difference between the turnover due to possibilities other than one which is mentioned in the list above.
Turnover which comes in supply as per GST but is not the income as per the annual audited financial statements presented by the auditor can be listed under clause 5O. The turnover which is supply as per the audits but is not considered in account statements or GSTR 9 can also be mentioned here.
| S. No. | Particular | Action |
|---|---|---|
| 1 | Sample of medicine given by the pharmaceutical company to a physician for free | (+) |
| 2 | Notice pay recovered from employees | (+) |
| 3 | Gifts are given to customers/vendors/distributors on purchase of some other commodity from the store. | (+) |
| 4 | Stocks issued to discharge CSR obligation | (+) |
| 5 | Sales promotion/advertisement reimbursement received and considered as supply | (+) |
| 6 | Out of pocket expenses considered in the value of supply | (+) |
| 7 | Value of Capital Goods on which GST is paid on the sale | (+) |
| 8 | Profit on sale of Capital goods disclosed in audited Annual Financial Statements | (-) |
| 9 | Loss on sale of Capital goods disclosed in audited Annual Financial Statements | (+) |
| 10 | Income in Profit and Loss account recognized based on special circumstances | (-) |
| 11 | Value on which GST is liable to be paid in respect of transactions where income is recognized based on special circumstances | (+) |
| 12 | Discounts which are not to be excluded from the value of supply as per Section 15 | (+) |
| 13 | Sale reversals in financials as risk & rewards not transferred. | (+) |
| 14 | Provision for doubtful debts written back | (+) |
| 15 | Interest income from banks or other entities. | (-) |
| 16 | Miscellaneous income or any other amount | (-) |