Sales:
1. While filing GSTR-1, we may also have wrongly quoted some of our customers GSTIN. Correct it before September, 2018 Return by Submitting online Debit note.
2. Matching All returns with GST3B Summary with GST1 Sales.
3. Tax on sale of Used Motor Vehicles : Three types of taxes during the year. For vehicles during 01.07.18 to 12.10.2017, at full GST applicable on new vehicle (Example 43% depending on vehicle). For sale from 13.10.17 to 24.01.18, 65% of 43%. For Sales from 25.01.18, 18% on the excess sale value over Income Tax WDV. If the sale value is not above IT WDV, then no GST payable.
*** Assets sold within 5 years from the date of purchase : Any asset purchased on which GST input was taken, if sold within 5 years from the date of purchase, the GST should be reversed/ paid will be higher of tax on the actual sale value or 1/20 th of ITC taken on purchase, for each remaining period in the 5 years. Eg. If an asset was purchase for Rs. 100000. GST ITC taken Rs. 18000. If Sold after completion of 2 years. The remaining period in 5 years is 3 years (12 quarters). If sold for Rs. 30000. The GST reverse/payable on sale will be Maximum of, 18% on 30000 = Rs. 5400 or 18000/20*12 = 10800. Here Rs. 10,800 is the GST Payable.
4. Other points to be considered
- Check serial number of Sales Bill from previous month. To check whether any additional bill is made last month after filing the GSTR1/3B of last month. Any omissions in between. Cancellations, omissions in books has to be noted and handled accordingly.
- Documents issued. Documents Cancelled.
- Check correct rate of tax is applied. Based on customer GSTN whether correct tax IGST (for other state GSTN) /CGST & SGST is charged.
- Break up for registered and unregistered customers.
- HSN Code of the product.
- Quantity of the goods sold.
- Any Exempted Sales, whether it is exempted.
- Sales Tallied with P&L.
Purchase:
1. Reconcile GST Input Tax Credit Claimed with GSTR-2A. If the credit claimed does not match with credit available online.
- Excess : There may be some purchases and expenses which you have not accounted or ITC Claimed. Account and claim ITC.
- Shortage : vendor may not have paid GST and not filed GST Return, inform to vendor pay and file the Return. Even if vendor filed return, he may not have correctly quoted GST No. Ask him to correct it in the subsequent months return Before September, 2018 return , by way of Debit Note in your name by referring the old invoice Number .What happens if not done : IF online credit is not available, then you have to pay the ITC as tax along with 24% interest p.a.
2. Any mistake if rectified before September, 2018 Return that will attract only 18% Interest . You can take ITC also. Any mistake if made after September, 2018 Return will attract 24% interest. No ITC Available.
3. Supplier Payment not made with 180 days : If payment to supplier is not made within 180 days from the date of bill, then ITC availed on it should be reversed in the monthly return when the 180 days expires (for July bill it is January return). With 18 % interest for 6 months. ITC can be again taken when payment to supplier is made later.
4. Stock Held with Job worker As on 30.06.2017 : As per the GST Act, stock held with Job worker as on 30.06.2017 should have been declared in TRAN-1 Form. If Not declared, the subsequent receipt of goods from the Job worker will be treated as purchase from unregistered person and GST RCM has to be paid (up to 12.10.17). Now prepared a list of Goods and machinery held with Job worker as on 30.06.2017 (Details of Job worker and details of goods), with a covering letter submit to the Jurisdictional Assessing Officer (CTO) (by post). Goods held with Job worker as on 30.06.2017 should be received within 1 year from 01.07.17. Machinery held with Job worker as on 30.06.2017 should be received within 2 years from 01.07.2017. If received lately, that will be treated as purchase.
*** Quarterly Return for Job work details is Compulsorily required to be filed : The Form is ITC-04.
If this form is not filed, then the goods sent will be treated as ‘supply’ and GST has to be paid. If the goods from 01.07.17 is not received within 6 months, then that will be treated as ‘deemed supply’ and GST has to be paid. Similarly for Machinery sent. The time limit is 3 years.
5. Self Made Invoice for Reverse Charge Expenses. Every month consolidated self made invoice is required to prepared in the format for Reverse Charge Paid Expenses.
6. As per Notification No.10/2017(IGST) 5% RCM is payable on Ocean Freight Paid on CIF purchase, for Import. 10% of CIF value is value of Ocean Freight. If we pay voluntarily before September, 2018 Return, then ITC available.
7. Bank Charges : ITC on bank charges is available Only with Credit available Online and Bill Issued by Banker. If no bill issued by Banker then ITC cannot be taken.
8. ITC is not available on purchase of passenger vehicle and Building construction.
9. Whenever stock is lost, destroyed (fire accident), ITC availed on the purchase has to be reversed to that value. Insure stock Cost + Tax value so that insurance can be claimed for full value.
Author Bio
Nice article touching upon basic requirements of GST
audit.