Every registered entity whose aggregate turnover during a financial year exceeds Rs. 2.00 crore has to get its accounts audited as the provisions of GST Act. Such person has to furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C.

Earlier, under the Central excise and service tax laws, there was no requirement for audit of accounts and furnishing reconciliation statement by a Chartered Accountant and/or Cost accountant. However, many State VAT laws had stipulated audit of records by a Chartered Accountant and filing of VAT audit reports. Threshold limits were prescribed for such audits. Reconciliations between the tax records and audited statement of accounts was generally sought for at the time of assessment, audit or investigation by the revenue authorities. There was no statutory requirement to furnish such reconciliation statements under the erstwhile laws.

Followings areas are required to be certified by the auditor

  • The total turnover of outward supplies declared in the returns including all the outward supplies taxable under GST Act effected during the year.
  • The total turnover of inward supplies declared in the returns including all the inward supplies taxable under GST Act made during the year.
  • The deductions from the total turnover including deduction on account of sales /supply returns claimed in the returns which are to be in conformity with the provisions of the law.
  • The adjustment to turnover of outward supplies and inward supplies has to be based on the entries made in the books of account maintained for the year.
  • The classification of outward goods/services supplied and inward supplies, rate of tax applicable and computation of output tax and input tax and net tax payable as shown in the return has to be certified as correct.
  • The computation of classification of goods supplied, the amount of input tax paid and deductions of input tax credit claimed and reversed in the return has to be certified as correct and in conformity with the provisions of law

Hence, Every registered person who is required to get his accounts audited shall furnish, electronically, the annual return 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.