What’s the Difference Between GSTR-9 and 9C?

As far as annual GST compliance is concerned, there are two return forms that make taxpayers scratch their heads hard. Case in point: GSTR-9 and GSTR-9C. Though they might sound similar, the difference between GSTR-9 and 9C is not just a letter!

One offers a full breakdown of your annual GST transactions, and the other one acts as a reconciliation statement that requires a more in-depth look at your financials. Confused? Well, fret not, you aren’t alone.

As a business owner, tax consultant, or finance enthusiast, this guide will demystify all the major differences between them, clear the jargon, and make you file with confidence. Let’s then decode the GSTR-9 and 9C puzzle, one form at a time…

What are GSTR-9 and GSTR-9C?

Understanding the basics helps to clear the confusion…

GSTR-9 is the annual return form filed by regular taxpayers. It consolidates a summary of outward supplies, inward supplies, tax paid, input tax credit (ITC) claimed, and amendments made during the financial year. It is mandatory for taxpayers whose turnover exceeds INR 2 crore in a financial year. The form gives the government a complete picture of a taxpayer’s GST activity in returns like GSTR-1, GSTR-3B, and GSTR-2A.

GSTR-9C is a reconciliation statement and audit report. It must be filed only if the taxpayer’s turnover exceeds INR 5 crore in the year. The form reconciles the data declared in GSTR-9 with the audited financial statements of the business. It requires certification from a Chartered Accountant (CA) or Cost Accountant (CMA).

What’s the Difference Between GSTR-9 and 9C?

Let’s understand the difference between GSTR-9 and 9C using the following aspects…

Purpose & Nature

GSTR-9 is an annual summary return. It is a statement of all the transactions done during the year under GST. The taxpayer declares details of sales, purchases, tax paid, and ITC in this form. It allows the tax department to cross-verify the monthly/quarterly returns and track annual compliance.

On the contrary, GSTR-9C is a reconciliation and certification form. It is an audit tool, the figures stated in which are matched with the audited financial statements. This is to maintain accuracy and avoid disparities between the GST returns and the books of the company in question.

Therefore, even though GSTR-9 and 9C are related and distinct, GSTR-9 is self-certified by the taxpayer, and GSTR-9C is certified by an auditor.

Applicability

An exceptionally significant distinction between GSTR-9 and 9C is the people they are applicable to. GSTR-9, on the one hand, applies to all regular taxpayers whose turnover is above INR 2 crore in any given financial year. This involves businesses, professionals, and traders that are registered under GST.

GSTR-9C, on the other hand, is only applicable to people and businesses with a turnover exceeding INR 5 crores. This increase in threshold implies that bigger companies with more complicated business operations are placed under stricter scrutiny.

Complexity & Certification

Filing GSTR-9 is usually straightforward. The form gathers information already filed monthly or quarterly. Many taxpayers use GST software like TallyPrime, ClearTax GST, etc., to auto-populate most fields. It does not require any certification or auditor involvement.

Conversely, GSTR-9C involves detailed reconciliation and audit work. The company’s accountant or a professional auditor compares the data from GSTR-9 with the audited financial statements. The auditor certifies the correctness of the returns by digitally signing the form. This makes GSTR-9C filing far more complex and one that requires professional help.

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Content & Attachments

The two forms have a considerable difference in their content. GSTR-9 asks for summarized details like total turnover, tax paid, ITC claimed, amendments, and tax demands or refunds. It is largely a tabulated statement of GST activity for the year.

GSTR-9C is divided into two parts. Part A contains the reconciliation statement showing differences (if any) between financial accounts and GST returns. Part B is the auditor’s certification stating that the reconciliation is true and fair.

Also, GSTR-9C requires attachments such as audited financial statements and the reconciliation annexure. GSTR-9, contrarily, does not require any attachments.

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Due Dates & Filing Sequence

The due date of filing both GSTR-9 and GSTR-9C falls on December 31 of the year following the financial year in question. However, GSTR-9C can only be filed alongside or post-filing GSTR-9 because it is a reconciliation of the same annual return. It cannot be filed before GSTR-9 in any case.

Penalties & Consequences

Failure to file these forms on time or failure to file them at all is a punishable offense with varying penalties. In the case of GSTR-9, a late fee of INR 100 per day is levied. This is capped on the basis of turnover.

In the case of GSTR-9C, the penalty for non-filing is more stringent. It may even go up to INR 25,000, depending on the higher risk of error and compliance in bigger businesses. It is a critical point of difference between the two regarding legal and financial implications.

Why Does Knowing the Difference Between GSTR-9 and 9C Matter?

When taxpayers know the difference between GSTR-9 and 9C, they comply correctly and spare themselves of the trouble of legal issues. For failing to file these returns can attract heavy penalties and future audits, as mentioned above.

In the case of smaller taxpayers, a lot of time and money also gets spared only if prior knowledge of GSTR-9 and GSTR-9C is available. No, to forget the way this information helps in planning resources for audit, data compilation, and working with professionals.

Conclusion

To wrap it up, GSTR-9 and 9C are both crucial annual compliance documents under GST but when it comes to their workings, they serve different functions. Recognizing the difference between them thus is essential to streamline the tax process.