Chapter I

Certificate under Section 18(1)(a) of the CGST Act

Suggested Format of Certificate

Independent Practitioner’s Certificate under the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) and State Goods and Services Tax Act, 2017/Union Territory Goods and Services Tax Act, 2017 (in short “SGST/UTGST Act”) in terms of Section 18(1)(a) of the CGST and SGST/UTGST Acts and Rule 40(1)(d) of the rules issued under CGST and SGST/UTGST Acts.

Name and Address of the Applicant

1. This Certificate is issued in accordance with the terms of our agreement dated ………….

2. M/s. …………………….. (hereinafter referred to as the “Applicant’) is a registered person vide GSTIN ……………………….. and is having its principal place of business at …………………………………………….. in the State of ……………………. The Applicant has the following additional places of business:

(a) _______________________________________________

(b) _______________________________________________

3. In terms of Section 18(1)(a) of the CGST Act and SGST/UTGST Acts, a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take input tax credit in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the CGST and SGST / UTGST Acts by declaring the same, electronically, on the Common Portal in Form GST ITC-01 (hereinafter referred to as the Statement). The details furnished in the above statement shall be duly certified by a practicing Chartered Accountant or a Cost Accountant where the aggregate claim exceeds Rs. 2 Lakhs.

Management’s Responsibility for the Statement

4. The preparation of the Statement and declarations in relation to the stock required in terms of the CGST and SGST/UTGST Acts and Rules issued under the said Acts, is the responsibility of the Management of................................... [Name of the Applicant] including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Statement and declaration and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.

Management is also responsible for ensuring that the Applicant complies with the requirements of CGST and SGST/UTGST Acts and CGST and SGST/UTGST Rules.

5. Management of the Applicant is responsible to conduct physical verification of inputs held in stock, semi- finished goods and finished goods held in stock on the day immediately preceding _________, the date on which Management becomes liable to pay tax under the provisions of the CGST Act and SGST/UTGST Acts.

6. Management of the Applicant is responsible to ensure that books, records documents and information made available for purposes of verification are truthful and reliable, extracted from contemporaneous records for the purposes of establishing reliability of assertions made by them.

Practitioner’s Responsibility

7. Pursuant to the requirements of Section 18(1)(a) of the CGST and SGST / UTGST Acts read with Rule 40(1)(d) of the CGST and SGST / UTGST Rules, 2017, it is our responsibility to examine the books of accounts and other relevant documents / records of the Applicant and to provide a reasonable assurance that the details furnished in the declaration in Form GST ITC-01 have been accurately drawn from the books of accounts and other relevant documents / records of the Applicant.

We conducted our examination of the Statement in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.

We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Opinion

8. Based on our examination as above and the information and explanations given to us, in our opinion, the particulars declared by the Management of the Applicant as annexed herewith in Annexure - A are fairly presented in all material respects and in conformity with the books of accounts and other relevant documents/ records maintained under the CGST Act and the SGST/UTGST Acts.

9. The quantity and value of inputs, inputs contained in semi-finished or finished goods held in stock is based on the calculations and confirmation done by the Management and verified by us along with the corresponding tax invoices and books of accounts and other relevant records and documents maintained by the Applicant.

Restriction on Use

10. This certificate is addressed and provided to the ……..[Name of the Applicant] solely for the purpose of submission to (Name of the Authority) pursuant to the requirements of Section 18(1)(a) of the CGST and SGST/UTGST Acts read with Rule 40(1)(d) of the CGST and SGST/UTGST Rules, 2017 and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this certificate is shown or into whose hands it may come without our prior consent in writing.

Place of Signature: _______
Date: _________________

ANNEXURE - A

Date from which liability to pay tax arises under Section 9, except under Section 9(3) and Section 9(4) - ____________

* In case it is not feasible to identify invoice, the principle of first-in-first out may be followed

Place of Signature: _____________
Date: ______________

Check points for the Chartered Accountants –

(i) Verify registration particulars with the Registration Certificate.

(ii) Do not take responsibility for filing the respective statutory form prescribed as the same is the responsibility of Management. Practitioner’s responsibility is to certify the details furnished in the declaration in Form GST ITC-01.

(iii) Check the books and records and other relevant documents and registers relating to quantity and value of inputs lying in stock and inputs contained in semi-finished or finished goods on the date immediately preceding the date from which the applicant becomes liable to pay tax under the CGST and SGST/UTGST Acts, 2017.

(iv) Check the basis of calculation of equivalent units of inputs contained in semi-finished and finished goods in stock.

(v) Statement of bills of entry / tax invoices attributed by Management to be the goods in stock that are not older than 1 year on the day on which the Applicant is liable to pay tax (Section 18(2) of the CGST and SGST/UTGST Acts, 2017) may be collected from the Management and subjected to audit verification tests. The tax invoice must be the one containing the prescribed particulars (Section 16(2) of the CGST and SGST/UTGST Acts to be read with Rule 46 of the CGST and SGST/UTGST Rules).

(vi) Ensure that the debit notes / credit notes, if any, are recorded / accounted against the vendor invoice which are forming part of the closing inventory.

(vii) This certificate is required to be issued only if the aggregate value of the claim on account of CGST, SGST / UTGST and IGST exceeds rupees two lakhs. (Rule 40 (1)(d) of the CGST and SGST/UTGST Rules, 2017)

(viii) Ensure that the certificate issued is in accordance with the Guidance Note on Reports and Certificates for special purpose issued by the ICAI.

(ix) Ensure that a letter of representation is taken from the Management of the Applicant for the details and information provided by them.

(x) No input tax credit must be availed in respect of capital goods and input services and the certificate must contain details related to inputs only.

(xi) Verify whether the registration of the principal place of business and the other places of business is in the State of _____and is applied on _______ i.e., within the stipulated time of 30 days from the date of being liable to obtain registration.