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    Management Representation Letter Format for GST Audit

    A management representation letter is a form letter written by GST Auditors, which is signed by senior company management. The letter attests to the accuracy of the financial statements and other information that the company has submitted to the GST auditors for their analysis.

    However, getting the Management Representation Letter does not absolve the auditor of its responsibilities. He has to exercise professional due diligence and care in conducting the audit.

    Given below is a sample Management Representation Letter for GST Audit. It is not intended to be a standard letter and it may be modified to suit individual needs

    <On the letter head of the company>


    To Auditor,

    Sub: Management Representation Letter

    This representation letter is provided in connection with your audit of the financial statements and attest function of GSTR 9C of _________Company for the year ended March 31, 2018 as required under the provisions of section 35(5) and section 44(2) of the Goods And Service Tax Act, 2017 (In short “GST Act”) read with rule 80(3) of the Goods and Service Tax Rules (In short “GST Rules, 2017”)

    We acknowledge our responsibility for the fair presentation of the financial statements in accordance with (indicate applicable financial reporting framework).

    We confirm, to the best of our knowledge and belief, the following representations:

    1. Audited Financial Statements (in case where done by another auditor):

    a. We have enclosed a copy of the audited financial statements

    b. The accounting policies followed by the company are provided in the notes to accounts to the audited financial statements

    2. Branch wise trial balance:

    Branch wise attested trail balance is provided in Annexure I

    3. Registration:

    a. Management has duly registered every place of business within the State and are listed in the registration certificate

    b. The following are the list of various place of business within the state:

    • _________
    • _________
    • _________
    • _________

     4. Advance Ruling:

    a. During the year, three applications have been filed for Advance Ruling in the state and the following is the status of each:

    • Order Received (Annexure II)
    • Order Received and Appeal filed (Annexure III)
    • Pending before the Authority.

    b. We confirm that we have duly applied the Advance Ruling received (and not disputed) to all the transactions as envisaged in the order unless appeal is filed.

    5. Classification

    a.We confirm that we have correctly classified into goods / services as per Schedule II of the CGST Act.

    b. We have applied applicable notifications and advance rulings and identified the HSN for the various supplies made by us.

    c. A List of the various supplies along with HSN and rate of GST adopted is enclosed in Annexure IV

    6. Outward Supply:

    a. All the supplies made during the year have been properly recorded in the books of accounts.

    b. All supplies made have been valued as per Section 15 of the CGST Act and Rules made there under.

    c. We have proper mechanism in place to comply with the provisions of time of supply as provided in Section 12 and Section 13 of the CGST Act.

    d. All the supplies made by us have been properly classified in to interstate and intra state; B2B and B2C and properly recorded.

    e. GST has been paid on sale of assets if any.

    f. We understand the implications of Schedule III of the CGST Act (supply without consideration). We have adequate mechanisms in place to identity and value such deemed supplies as per the Act and Rules made there under.

    g. In respect of export of goods, export of services, deemed exports, SEZ supplies we have satisfied the conditions specified in the Act and Notifications.

    h. All the supplies have been declared in the returns and taxes are duly collected and paid.

    7. Inward Supply:

    a. All inward supplies have been properly classified into intra-State, inter-State inward supplies or imports.

    b. All inward supplies have been properly classified into Capital goods, Inputs and Input Services.

    c. We have declared all the inward supplies in our books of account and duly filed in the GST returns.

    d. We have paid GST under reverse charge mechanism as provided on all unregistered inward supplies until 12th October 2017

    e. We have paid GST under reverse charge mechanism as provided in Section 5(3) of the IGST Act and Section 9(3) of the CGST Act and notifications made there under.

    f. The HSN details as recorded in the books of accounts are true and correct to our knowledge.

    8. Input Tax Credit (ITC):

    a. We have satisfied all the conditions of Section 16 of the CGST Act in respect of ITC, i.e.All goods/services are used in the course / furtherance of business.

    • We confirm that we have availed ITC based on all tax invoices / any other eligible document.
    • ITC is availed only on receipt of goods / services
    • We have aid all the vendors within 180 days except those provided in Annexure V
    • In respect of payment of tax by supplier, we do not have sufficient control over it. GSTR 2A also does not provide sufficient assurance as to payment of taxes as it is not linked to GSTR 3B. However we have enclosed the GSTR 2A Reconciliation in Annexure VI prepared as on XX.XX.XX
    • If ITC is claimed on purchase of capital asset, no depreciation is claimed on the same.

    b. We have properly classified the ITC into CGST / SGST and IGST. Wherever wrongly classified we have made the corrections.

    c. We have done reversals as provided in Section 17 of the CGST Act for the following:

    • In respect of ITC claimed but goods lost or destroyed or disposed of by way of gift, free samples, etc
    • In respect of ITC blocked U/s. 17(5) of the CGST Act.
    • In respect of goods or services commonly used for making both (taxable and zero rated) and exempted supplies as per Rule 37, 42, 43 every month. WE have also verified the reversal at the end of the year.

    d. In respect of Transitional Credits availed by us, we provide the below:

    • We have satisfied all the conditions of transitional credits as provided in Section 140, 141, 142 of the CGST Act.
    • We have complied with all the procedural requirements as provided in the rules and properly filed Tran-1 / Trans-2 forms.
    • In respect of benefits arising due to additional credits, we have complied with the provisions of Anti-profiteering.

    9. Refund:

    a. A list of the refund applications made and their status is provided in Annexure VII

    b. We confirm that we have filed refund application only for claims that are eligible and upon satisfaction of the conditions of Chapter XI of the CGST Act.

    10. Job Work:

     a. In respect of job work we have satisfied all the conditions of Section 19, Section 143 of the Act.

    b. We have filed form ITC 04.

    c. As at the year end the stock lying with job worker and their status as on date are provided in Annexure VIII

    d. If goods are not received within time specified in the Act, GST has been paid.

    11. Filing of GST Returns:

    a. We have filed all the returns (GSTR 1, GSTR 3B, GSTR 9, ITC 04, ITC 01……….) as applicable to us within due date except the delays as reported in Annexure IX

    b. On filing of returns after due dates, we have paid the applicable interest as provided in Annexure X

    c. We are aware of the decision by the Telangana High Court and relevant Apex Court Judgements that interest is to be remitted on gross tax liability before adjustment of ITC, however we have paid interest on ­­­­­­­­­­­____________tax liability (Gross / net).

    12. Accounts and Records:

    a. We have issued the Tax Invoices / Bill of Supply / E-way bill /Delivery note as per the provisions of the GST Act.

    b. We have raised self invoice in case of payment of tax under reverse charge mechanism.

    c. We have maintained proper accounts and records as provided in Chapter VIII of the Act , viz., records of

    • production or manufacture of goods;
    • inward and outward supply of goods or services or both;
    • stock of goods;
    • input tax credit availed;
    • output tax payable and paid;
    • Records required to be maintained by job worker
    • Records required to be maintained by owner of warehouse

    d. We have maintained the records in hard copy / soft copy at every place of business.

    13. Reconciliation Statement in Form 9C

    a. We have adequate procedures for reconciliation of GST returns with books of accounts periodically.

    b. We have enclosed the reconciliation statement in form 9C for your reference.

    For ……..

    Partner / Proprietor / Director / Authorized Signatory

    *Strike out whichever is not applicable
    **The suggested format of the management representation is only illustrative. There could be several issues that may not have been covered in the same which may warrant suitable inclusions or exclusions or may even warrant the issue of a separate management representation/ certificate. The reader may make suitable modifications/corrections in respect of the format suggested above based on the facts and surrounding circumstances of each case under audit.

    The Auditor is required to obtain suitable Management Representation Letter from the management before the GST Audit Report in Form 9C is signed.

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