8 Points – GST compliances before the end of September 2022

1. Reconcile the input tax credit register for the FY 2021-22 with GSTR 2B:

a) To comply with Rule 36(4): The taxpayer must reconcile the GSTR 2B with input tax credit availed during the period April 2021 to March 2022 to comply with the provisions of Rule 36(4). As per the Rule 36(4), a registered person can avail the input tax credit only if the invoice is appearing in GSTR 2B report.

b) Avoid financial loss on account of input tax credit: As per Section 16(4), the input tax credit related to a financial year shall not be allowed to be claimed after September month of the following year to which invoice pertains. Therefore, you are advised to reconcile the GSTR 2B with input tax credit for the financial year 2021-22 and any ITC not claimed till now should be re-looked and claimed in GSTR 3B, if claimable. Any invoice which is not appearing in GSTR 2B but claimed in the books of account/GSTR 3B shall be liable to be reversed or you may get the corrections done by your supplier in September month only. No amendment shall be allowed subsequently at the part of Supplier.

2. Benefit of GST reversal on Credit notes pertaining to financial year 2021-22:

This is pertinent to note that the registered person shall not be allowed to claim the benefit of reduction of tax liability on account of credit note raised against invoices issued during the FY 2020-21, after September 2021. Therefore, you are suggested to review receivables related to FY 2021-22 outstanding as on date and take the actions to raise credit notes before September 2022.

3. Reconciliation of GSTR 1 and GSTR 3B:

Any rectification of misreporting in returns for the FY 2021-22 shall be allowed till September 2022. Therefore, the reconciliation of GSTR 1 and GSTR 3B is necessary to ascertain any such misreporting and take the impact in September 2022 month’s return. Resultant, if any invoice found which are still pending to be reported in GSTR-1, should be reported in GSTR-1 of September 2022.

Further, as a result of reconciliation between GSTR-1 and GSTR-3B, if any amendment to be done against any of the outward invoices which have been already reported in GSTR-1 of FY 2021-22, such amendment can be done in GSTR-1 of September 2022. In this regard, we suggest sending a separate e-mail to the clients for requesting them to inform any amendment on or before 30 September 2022 else the entity shall not be responsible for any loss to the client.

4. Reversal of input tax credit as per Rule 42 and 43:

A registered person, supplying goods or services which are exempt under GST law, shall be required to reverse the input tax credit as per Rule 42 and 43 for the FY 2021-22 and any short or excess reversal of input tax credit shall be reported in GSTR 3B for the month of September 2022. Any short reversal can now be adjusted in September 2022 month along with applicable interest.

5. Comply with RCM liability for the FY 2021-22 and claim the ITC:

This is important to note that the RCM liability for the FY 2021-22 should be considered and reported in GSTR 3B for the month of September 2022 else the RCM liability related to FY 2021-22 paid after September 2022 may be disputed by the authorities for claiming of input tax credit due to period of limitation of Section 16(4). In this regard, we suggest sending a separate e-mail to the vendors/suppliers for amendment, if any and with a indemnification that incase the Entity suffer loss due to non-availability of ITC in GSTR 2B, then the same shall be recovered from the vendor/supplier.

6. Non-payment of consideration by recipient within 180 days from the date of invoice:

According to proviso of Section 16(2), the recipient of goods or services is required to make payment to supplier within 180 days from the date of issue of invoice. If any ITC is unclaimed due to non-payment of consideration to the supplier, then such ITC may only be claimed in the month of September 2022 on payment to the supplier. If the payment of consideration is not made in the month of September 2022 and ITC not claimed, then such ITC shall be lapsed. It is suggest to claim and reverse the ITC in case the payment of consideration is still pending.

7. Revenue Reconciliation:

Revenue as per audited/provisional financial statement should be reconciled with the turnover reported in GST returns for FY 2021-22.

8. E-invoicing is applicable on Taxpayers having Aggregate Turnover more than INR 10 Crores in any of the previous financial year (after 01 July 2017) w.e.f 01 October 2022.