Under GST at the beginning of every year there are certain steps every registered person has to take before making any supply. These steps are summarised as under;
1. Submission of LUT for FY 2020-2021.
2. Shall Start new series of the tax invoice, debit note, credit note, delivery challan, receipt voucher with unique serial numbers.
3. Following reconciliations to be done for FY 2019-20:
- Outward supplies as per books of account and GST returns (Books vs GSTR-1 vs GSTR-3B)
- ITC claimed in GSTR-3B vs ITC appearing in GSTR-2A
- o Reconciliation of balance of credit and cash as per the GST portal with balance appearing in books.
4. Check the requirement for any ITC reversal or ITC to be reclaimed;
- Rule 37 – Any ITC reversal required on account of non-payment within 180 days or reclaim of any ITC in respect of supplies for which payment has been made.
- Rule 42 or 43 – Impact of annualized ITC reversal in case of exempted as well as taxable supplies to be considered.
- Check if any reversal required against purchased goods rejected and returned. (Ensure the impact of the same has been considered in GST returns)
5. Few additional pointers for GSTR-2A reconciliation
- Identification of default vendors for the purpose of recovery of tax paid along with interest
- The reconciliation of 20%/10% being maintained month-wise to be incorporated to an annual level, in addition to an invoice level reconciliation.
- Follow up for any required amendments in invoices.
6. Update the masters (vendor details, GSTINs, product descriptions, tax rates etc.).
7. Cross charge to distinct person and related parties for supply of common services.
8. Validation of RCM liability –
- Ensure if the liability is being paid in respect of all input supplies notified for reverse charge and all the amendments have been taken care of.
- Check if the tax paid under RCM matches with ITC under RCM. RCM liability should be more than or equal to ITC under RCM.
- Ensure timely payment of RCM liability, interest liability needs to be discharged in respect of any delay in tax payment.
9. Bird-eye view of compliance status or a walk back to ensure no lapse in compliances. Any interest short paid, late fee not paid etc. Check if any amendments required to be made in GST returns.
10. Issuance of GST Debit note/ Credit note –
- The taxpayer may issue credit note for excess value and/or tax charged, short supply or goods returns. Issue credit note and account in the books of account.
- Issue debit note where lesser value and/or tax was charged and pay the tax along with interest.
11. Ensure tax liability against receipt of advances and adjustment thereof to derive at unadjusted advances at the year-end. If no supply has been made against the advance, claim a refund.
12. Track status of goods sent on job work or goods sent on approval whether all the goods have been received back within the due time period.
13. Reconciliation of E-way Bill issued during the year viz a viz tax invoices/delivery challans generated.
14. In case of reconciliation of books inventory with physical inventory, assess if ITC reversal to be required.
15. In case of continuous supply of services, ensure whether invoice is raised on milestone.
16. If some of the registrations are required to be closed on account of no business activities, file surrender application for the same.
17. Invoicing for goods sent on approval.
18. Amendment to registration certificate – Products, additional places etc.
19. In case any amount paid/reversed under protest, ensure receivable are accounted and reported in the asset side of BS.
20. Verify year-end accrual/provision entries for transactions with related parties and ensure compliance in March 2020 returns. For example, with respect to inventory write off entries, ITC restriction under section 17(5) of CGST Act needs to be examined.
21. Based on the turnover for FY 2019-20, check whether there is any change in the requirement of no of digits in HSN? Taxpayers whose turnover is below Rs. 1.5 crore are not required to mention HSN Code in their invoices. Taxpayers whose turnover is above Rs. 1.5 crore but below Rs. 5 crore shall use 2-digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4-digit code.
22. If the assessee wishes to opt for Composition Scheme for FY 2020-21, the due date for opting for Composition Scheme (CMP-02) is 30.06.2020 and for GST ITC-03 is 31.07.2020. Those who are already in composition Scheme need not to any intimation.
23. If the aggregate turnover for FY 2019-20 is above Rs. 1.5 Crore then the taxpayers have to file monthly return. If the aggregate turnover is below Rs. 1.5 Crore then the taxpayers have an option to file the quarterly GST returns. Taxpayer can choose any of the option.
24. If ISD registration is there, ISD Returns to be filed by 30th June, 2020.
25. While calculating depreciation for the financial year, ensure that ITC availed is not added to the cost of asset.
26. Check the status of GST refund. For the export of goods done in FY 2017-18, the time period for claiming refund application would be two years from the end of the financial year in which such refund clam arise i.e. 31st March, 2020 which is subsequently extended to 30th June, 2020 due to COVID-19 pandemic lockout.
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