Year End Closing FY 2023-24: Action Points for GST, Companies Act & Labor Laws

Year End Closing – F.Y. 2023-24 – Important Action Points – Volume 2

Dear friends and my professional colleagues, in this second volume, I continue my discussion on the financial year 2023-24 account closing process. Here, I will cover key considerations related to the year-end exercise for GST Law, Company Law, and Labor Law. I have already addressed Accounts and Income Tax provisions in my first volume, which you can access through the provided link – Important Action Points for Year Ending Closing 2023-2024 (taxguru.in)

Year End Closing – F.Y. 2023-24 – Important Action Points – Volume 2

A. COMPLIANCE OF GST LAW, 2017

While the GST Law does not currently specify any definitive actions to be taken before March 31, 2024, it is prudent for professionals and accountants to take certain steps to ensure compliance and avoid potential revenue loss. Failure to complete these tasks within the specified time frame may result in non-compliance or financial penalties.

All ITC claims in books:

• Account for all suppliers’ bills along with entry of “input tax credit” (ITC) – there may you have paid advance but bill not received or work has been completed but bill may be pending -so to avail in books take all bills and book.
• For ITC on capital goods – you may have put whole ITC booked as one time while you can avail ITC quarterly by 60 months from the date of put to use or in 20 quarters. So, correct the entries.
• Check from all GSTR 2A & 2B – eligible and non eligible ITC accordingly correct ITC claims and correct in March 24 GSTR 3B. Actually match 2A & 2B for whole year.
• Complete your ITC avail register in all respect.
• Ensure you have paid to supplier to the bills received/services or goods received up to Sep 2023 and if you have not paid so far then reverse the ITC in GSTR3B and avail only when you pay to the vendor otherwise you have to pay interest on un-authorised utilization of ITC.
• Ensure before utilizing ITC – all conditions have been fulfilled as defined in section 16 of the GST Act, 2017 & Chapter – V of “Input tax Credit”- Rule 36 to 45 of CGST Rules- 2017.
• Check had you claimed total TDS on GST deducted by PSU/Govt etc. clients by checking GSTR VII.
• Check your auditors or authorities or you yourself suo moto basis revert the ITC in last years or in earlier periods of the f.y. 2023-24, so the month March is high time to check their eligibility of re-claim in GSTR 3B of March 24 on or before 20^th April, 2024.

Moreover, Govt officials lensed all ITC claimed by dealers therefore be careful in taking ITC and do not leave any ITC to claim correctly as per the law.

If you are a “Goods Transport Agency (GTA)”

As per the Notification No. 03/2022-Central Tax (Rate), dated 13th July, 2022, an option is being provided on the portal to all the existing taxpayers providing “Goods Transport Agencies Services”, desirous of opting to pay tax under the forward charge mechanism to exercise their option.

You can go at portal after login – Services > User Services > Opting Forward Charge Payment by GTA (Annexure V), after login, Annexure V has been made available on the portal for GTA’s to exercise their option for the Financial Year 2024-25, which would be available till 15th March, 2024.

If you are Exporter or supplying services to SEZs/NEPZ etc -LUT – Exports / Supply to SEZ

As per the rule 96A of CGST Rule-2017 notified by GST Notification No. 16/2017 dated 07-07-2017, any registered person availing the option to supply goods or services for export without payment of IGST needs to furnish, a bond or a LUT (Letter of Undertaking) in Form GST RFD-11.

It is crucial to note that LUT application is required to be completed before March 31, 2024, or before supply for Exports and SEZ.

If you 0pt-in or out of GST Composition/QRMP Schemes:

A) Composition Scheme under GST:If you areopting for the “Composition Scheme for the financial year 2024-25, the last date to opt-in or opt-out from the Composition Scheme is 31st March 2024. Form CMP-02 must be used to opt into the composition scheme (supplier of goods and service provider).

B) QRMP Scheme under GST: If you have aggregate turnover up to Rs 5 Cr. Then you are allowed to furnish your GST returns on a quarterly basis along with monthly payment of tax under Quarterly Return Monthly Payment or QRMP scheme under GST, with effect from January 01, 2021, i.e. from the last quarter of FY 2020-21.

Last date to opt-in or opt-out from the QRMP Scheme is 30th April 2024 for the financial year 2024-25.

GST Refund

You may have last date to apply for GST refund 31-03-24 in some cases. The refund is possible in the following cases:

(a) export of goods or services;

(b) supplies to SEZs units and developers;

(c) supply of goods regarded as Deemed Exports;

(d) refund of taxes on purchase made by UN or embassies etc. under Section 55 of CGST Act, 2017;

(e) refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court;

(f) refund of accumulated Input Tax Credit on account of inverted rate structure;

(g) finalisation of provisional assessment;

(h) refund of pre-deposit;

(i) tax paid in excess/by mistake;

(j) Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India (not notified yet);

(k) refund of tax paid in wrong head under Section 77 of CGST Act, 2017 & Section 19 of IGST Act, 2017 (treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa);

(l) refund on account of any other reasons. Thus, practically every situation is covered.

You have to filed RFD 01 and detailed procedure and guidance link I am giving here for your convenience – https://taxguru.in/goods-and-service-tax/gst-refunds-what-you-should-know.html

New Invoice Series

As year 2023-24 is being closed so new series shall be started from April 2024-25, therefore all invoices related to 23-24 must issue on or before 31^st March 24 so that in GSTR 1 for March 24 will contain all Invoices.

Further, take care only 48 hours are available to rectify any E Invoice at the portal hence 30^th & 31 March dates are very crucial, you will not be able to rectify or cancel invoice by normal mode otherwise corrections are possible till 30^th Sep, 2024. (18month a year)

Corrections/Amendments Etc in filed returns – 2023-24:

It is advisable to rectify any errors or omissions made in GSTR-1 or GSTR 3B returns for the preceding fiscal year in the March 2024 returns. To achieve this, taxpayers should reconcile their accounting records (Ledgers) with the submitted returns. Any discrepancies (if any) should be adjusted in Form GSTR 3B. Additionally, any mistakes made in GSTR-1, such as uploading an incorrect GSTIN, submitting B2C invoices instead of B2B invoices, or omitting invoices, can be rectified now.

GST point of view Stock Taking

In preparation for GST departmental audits, it is crucial to ensure that there are no discrepancies between the physical stock and the recorded entries in the books. Additionally, it is important to review ITC reversals while conducting physical stock checks. If any discrepancies are identified, it is necessary to verify if there are any unrecorded sales in the books.

GST on RCM:

It is important to note that, in certain instances, the recipient of goods or services is responsible for paying GST instead of the supplier. This is referred to as Reverse Charge under GST. It is crucial to correctly identify these scenarios to ensure timely collection of Input Tax Credit from the government.

Please ensure that any Reverse Charge GST is paid by March 31st, 2024, to avoid any delays in receiving Input Tax Credit.

File ITC 04 – Job Work

The job work industry is a significant contributor to the Indian economy and requires specialized attention. It encompasses outsourced activities that may or may not result in manufacturing and can be defined as the processing of goods provided by the principal to a job worker. It is crucial to reconcile and file ITC-04 to ensure the appropriate collection of Input Tax Credit (ITC).

B. COMPLIANCE OF COMPANIES ACT, 2013

The followings are the CA-2013 formalities related to 2023-24 – you are requested to note them as per your status & requirement of the Act.

FORM MSME-1 (Half Yearly Form for Outstanding Payment To MSME)

The initial compliance requirement to be addressed is the submission of FORM MSME-1. This form serves as a means to report information pertaining to outstanding amounts owed to Micro, Small and Medium Enterprises (MSMEs). The filing frequency for this form is semi-annual, with specific deadlines as follows:

• October 2023, to March 2024; The deadline is April 30th, 2024.

Annual Returns for LLPs

All LLPs registered under Limited Liability Act, 2008 have to annually file two forms – Form 11 and Form 8. Annual Return: Form 11 is to be submitted within 60 days of closure of the financial year i.e 30th May of each year. (Financial year closes on 31st March.)- deadline is 31^st May, 2024.

FORM DPT-3 (Return of Deposit)

Companies are required to file FORM DPT-3 to report deposits by June 30th. This form is essential for ensuring transparency regarding received funds. Failure to meet the deadline may result in regulatory issues and fines. Therefore, it is imperative for companies to ensure timely filing of FORM DPT-3 by June 30th, 2024.

FORM PAS-6 (for Unlisted Public Company for Reconciliation of Share Capital Audit Report on Half Yearly Basis)

Unlisted public companies need to file FORM PAS-6 to reconcile their share capital on a half-yearly basis. There are two periods of filing ROC annual return for FY 2023-24 to consider.

Dead line for filing PAS VI – six monthly ended 31^st March 24 is May 30, 2024.

FLA (Annual Return to RBI)

Companies with Foreign Direct Investment (FDI) or Overseas Direct Investment (ODI) are required to submit the Foreign Liabilities and Assets (FLA) form, also known as the Annual Return to RBI. The deadline for filing this annual return is July 15, 2024. This form enables the government to monitor foreign investments in Indian companies.

DIR-3 KYC (KYC of Directors/Designated Partner)

To ensure the accuracy and currency of company official records, Directors and Designated Partners of companies and LLPs are required to complete their Know Your Customer (KYC) process by filing DIR-3 KYC. For individuals holding a Director Identification Number (DIN) or Designated Partner Identification Number (DPIN) as of March 31, 2024, the deadline for KYC compliance is September 30, 2024. This measure aims to maintain up-to-date and reliable information on company officials.

Company Minutes – Board/Shareholders/EGM etc

The company secretaries are very prompt to draft minutes and get is signed by meeting chairman in next meeting -but you are requested to check:

a. Number of board meetings as per the statute have been taken place and adequately recorded.

b. Never try to make minutes of back dated – always ensure the quorum of meeting was complete or main participants were not at the place of meeting – they may be travelled and caught by dates of visa or airline tickets or hotel bookings.

c. In act every situation has been defined so do not try to make wrong recorsd.

d. Complete all attendance sheets of quorum of any meeting.

e. Please remember – HR/Accounts many departments give certified copy of “Extract of Board Meeting” to many outsiders for their finance facilities or labour cases – so ensure all have been accounted for in minutes or not.

f. Complete statutory registers and review by the events of f.y. 2023-24 as under:

i. Share certificates – are kept properly and their counter foils have been maintained (if not demat the shares)

ii. Share allotment register

iii. Members details

iv. Share transfer details

v. Directors’ shareholding

vi. Charge registers

vii. Register of contracts

viii. Loan guarantee register

ix. Investments

x. Dividends

xi. MSME dealing

xii. If any other register applicable to your nature of company

C. COMPLIANCE OF LABOR LAWS – PF/ESI/LWF/PT/MWA/Bonus/Gratuity etc

The compliance requirements and their associated dates, periodicity, and applicability vary from state to state. I will endeavour to provide you with an overview of the pan-India compliances, but for specific dates and applicability to your state, you will need to conduct further research. The following is a summary of the key labour laws and their requirements:

Professional Tax

This act is not applicable to every state. But one thing is very interesting, this act has been inculcated in GST portal – pan-India. At the time of taking registration in GST it asks whether you are registered in PT or not, please fill the details but mostly ignored it.

You have to pay employees’ monthly/quarterly/half yearly contribution, six monthly/ annual returns and in addition company annual charges also to be paid.

Please check in your state what is due on or before 31-03-2024.

PF ACT

a. Check on 15^th March, 24 & 15^th April 2024 deposit all contribution – including any left old one to avoid further interest and penalty.

b. Returns of employees – qualifying/leaving & monthly remittance statement – Form 1, 2, 10, 21 & 22 – 25^th April, 2024

c. Annual Return – CT Department – Form III – 29-04-24

d. Check your filing of Form 5A is up to date

e. DSC has been registered or not

f. Exit of employees – who left in 2023-24 at portal

g. Annual Return – Form 3A, 6A. – 30^th April 2024

ESI Act –

a. Please take if not taken, as per the applicability to your organisation “Online Registration through http://www.shramsuvidha.gov.in/home.

b. Monthly payment of contribution and filing of return through online- 15^th March & 15^th April 24 – if left any in early months please cover here.

c. Muster Roll, wages record and books of Account maintained under other laws.

d. Maintain Register of Accident Register in Form-11 & Inspection Book.

e. Accident report in Form-12, report immediately in fatal/death and in 48 hours in ordinary cases and immediately in death or serious injury cases.

f. Please check at ESI portal any out standing demands lied in 18 or 19 series or 45A 04 85B recoveries are there then take immediate action and deposit amount.

g. There is limit of cancellation of challans if wrongly made and for damages there are certain time for asking condonation so check at your portal and take immediate action.

Bonus/Gratuity

For Bonus has to maintain-

• Form A, which contains the whole computation of the allocable surplus
• Form B, which displays set-offs and adjustments
• Form C, which contains information about the bonus due, the deductions to be made, the amount distributed, and other data

For Gratuity there are two compliances under Legal Compliance & Accounting Compliance

For closing point of view, you have to check whether gratuity paid during the year have been debited to “Gratuity Provision A/c” and last year opening balance must have to be matched with additional current year provision less amount already paid. Check employees covering or tending to 5 years service completion those have to be included in calculation in small organization who do not follow actuarial valuation method.

Your year end exercise is must for correct budgeting expenses and provisions to be put in books as on 31-3-2024.

You have to follow provisions of AS 15, GAAP & IndAS 19 as per the applicability in your organization.

Dear friends & professional colleagues, I hope that by reading both volumes of my articles on this subject, you will have a comprehensive checklist of the accounting and legal tasks that must be completed by March 31, 2024, to ensure an accurate closing of the books.

If you have any questions or require further clarification, please do not hesitate to write them in the comment section. If there are specific topics that you feel require more elaboration, please let me know, and I will do my best to provide additional explanations.