Article on “GST – Year End Checklist” by CA Abhishek Malpani, Advisor, Bizsolindia Services Pvt. Ltd. (March 2022)

As CBIC chairman has statement that now government is going to focus on department audit to ensure there is no GST revenue leakage, it is important for all companies to ensure that correct returns are submitted and figures are properly reconciled with books of account. Also there are lot of changes in GST which are made applicable from 1^st Jan 2022 which makes it quite difficult for any companies to ensure 100% statutory compliances.

We are in the penultimate week of Financial year 2021-22. It calls for some activities to be carried out under GST and laws  for smooth transition to Financial Year (FY) 2022-23. We have listed down certain important activities for the said transition/ closure of Financial Year 2021-22–

Following Works needs to be done before finalization of Books on 31.03.2022:

 

1. Input Tax Credit:

 

1. Reconciliation of books credit against GSTR3B credit:

As registered person can take ITC in GSTR3B only when invoices are reflected in GSTR2A, there is going to be difference between books & GSTR3B ITC amount. It is strongly recommend to reconcile this difference and have list of invoices for which credit is not availed.

 

1. Availment of 2021-22 invoice credit:

After doing GSTR2B reconciliation there will be invoices for which credit is not availed by company. Company need to check whether booking for such invoices are pending or not and avail ITC accordingly. In case credit is not availed till March 22 for FY 2021-22 invoices, company can avail ITC for those invoices till 30^th Sept 22.

1. Ensure reversal of ITC for invoices for which payment is not made within 180 days

2017. Ensure reversal of common credit under Rule 42 & 43 of CGST Rules, 2017.

1. Ensure reversal of ITC for stock write off.

2. Sales:

1. Sales reconciliation with books: Ensure sales for the year are reconciled with sales reported in GSTR-1 & GSTR3B 

1. Review year end miscellaneous income entries for GST liability

1. Ensure all credit notes are received for all types of discount received by the company for which income is booked under sales

1. Reconcile taxes paid in GSTR3B against liability in books

1. Ensure IRN is generated for B2B, Export, Credit Note & Debit note. In case, any IRN generation is pending, generate IRN.
2. Adjust GST paid on advance with subsequent liability and report same in GSTR 1 and 3B (Applicable on Services)
3. Check correct GST is paid on fixed asset deletion / disposal / car sale.

3. Letter of Undertaking: All the exporters who supply exports without paying tax should apply for LUT for FY 22-23.

4. Reverse Charge: Review all RCM transactions & ensure RCM tax is paid for import of Services, sitting fees paid to directors, GTA, Security Services, Rent a Cab, Advocate fees and credit is availed.
5. Ensure reconciliation of Electronic Cash & Credit ledger with books of accounts.

6. Preparation of documentation: Ensure that Bill of Supply (For Exempt Supplies), Revised Tax Invoice, Debit Note, Credit Notes, Receipt Voucher, Refund Voucher & Payment Vouchers are issued.

7. GST Return Reconciliation: Prepare proper reconciliation of GSTR-3B Figures Vs. GSTR-1 figures. In case of any difference, take necessary impact in March 22 GST return.

8. Export Refund: Reconciliation of pending export refund as per GST refund application & books of account. Ensure correct pending refund amount is reflected in books as refund receivable.

9. Supply of services free of cost to branches located to other States– Any support given by head office to its branches / factory is to be treated as “outward supply” and accordingly, IGST will be applicable. In such a case, tax invoice is required to be prepared and IGST liability needs to be paid.

10. Written off stock:As per Section 17(5)(h) of the CGST Act, 2017, if any company writes off any value of goods (whether raw material or WIP or finished goods), in such a case, respective ITC needs to be reversed.

11. E-invoice: From 1^st April 2022, E-invoice is made applicable for companies whose turnover is more than Rs. 20 Cr. So companies should be ready for implementation with necessary software change. 

12. Job Work:

1. Ensure all inputs are received back from Job worker within 365 days from the date of sending of goods to job worker. In case of non-receipt, company need to ensure reversal of ITC for those goods.
2. Submission of ITC-04 return for the period Oct 21 to March 22 by 25^th April 22. In case any goods 

13. Selection of frequency of Return Filing (Only for taxpayers having Turnover below Rs 5 Crores): – Time limit for opting OUT of the QRMP Scheme for Quarter 1 ending June 2022 by 30th April, 2022. 

To avoid any surprise GST penalty in department audit, we recommend everyone should ensure timely compliances of GST in their year end closure activities and Bizsol will be always there to support you

 

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