GST compliances with change in FY
Based on provisions and rules under the GST regime, there are certain to-dos that need every taxpayer’s attention before the beginning of the new financial year.
Renewal of LUT
Letter of Undertaking is a pre-requisite for exports without the payment of IGST.
The validity period of a LUT is only for a financial year. Hence a fresh application in Form GST RFD-11 needs to be made every year. (Read in detail about LUT)
New Unique series for Invoices
Rule 46 and Rule 49 of GST – Taxpayers are required to start a new unique series for generating invoices/bills of supply for every financial year.
Note: Serial number of invoices should be consecutive and it should not exceed 16 characters. A serial number can contain alphabets, numerals, special characters, etc but it is advisable to keep it unique consecutive, and simple so it is easy to reconcile from JSON files too.
Applicability of e-invoicing
With effect from 1st April 2022, provisions of e-invoicing will be applicable for taxpayers whose aggregate turnover exceeds Rs 20 crores in any financial year after the rollout of GST.
Taxpayers need to verify whether the provisions of e-invoicing are applicable to them from the e-invoicing portal (verify here). If applicable then the registration and onboarding process for the generation of e-invoicing needs to be done before the start of the financial year. (Read in detail about E-Invoicing under GST)
Applicability of HSN/SAC
If AATO is up to Rs 5 crores then it will be mandatory to quote 4 digit HSN for B2B invoices (optional for B2C invoices).
If AATO is above Rs 5 crores then it will be mandatory to quote 6 digit HSN for B2B as well as B2C invoices. (Read in detail about HSN/SAC codes)
QRMP Scheme / Composition Scheme
Verify whether you are still eligible to continue availing of the QRMP scheme or composition scheme based on your AATO of the preceding year.
Reconciliation of GST returns
Reconciliation of GSTR 1 with GSTR 3B, books of accounts, and e waybill data. Reconciliation of GSTR 2A/2B with books of accounts.
- If any invoice/debit note/credit note was not recorded the same should be recorded.
- If any invoice/debit note/credit note was incorrectly recorded the same should be amended. Make amendments if any transaction was incorrectly recorded as B2C supplies instead of B2B supplies and vice-versa.
- Reversal of ITC if incorrectly claimed in excess of what was eligible.
- Reversal of ITC if payment is not made within 180 days to the supplier of goods or services.
- Verify and avail ITC if an eligible ITC was not recorded due to human/system error.
- Verify and avail the ITC on charges levied by bank if not availed during the year.
- Verify whether ITC relating to all your inward supplies and inward services reflects in GSTR 2A/2B, if not confirm the correct filing status with the supplier.
- Verify whether the impact of GST for inter-company transactions/ inter-organization transactions has been correctly given.
- Verify whether ITC available is correctly distributed by the Input Service Distributor.
- Verify whether no ITC is availed from the suppliers whose registration has been canceled(post the date of cancelation).
Reverse Charge Mechanism
Verify whether wherever tax is required to be paid on a reverse charge basis is paid or not.
Verify whether the ITC claimed for tax paid on a reverse charge basis relates to the same financial year as there have been instances where the Government has disallowed earlier period’s ITC as it was time-barred.
Verify whether the interest which was not getting auto calculated is paid or not. If not it is advisable to pay now and not delay it any further.