Dr. Sanjiv Agarwal, FCA, FCS
The first financial year of GST regime is coming to an end next week on 31.03.2018. This is also the year of transition or migration of old indirect tax regime (VAT, Service Tax, Central Excise and other taxes) into goods and services tax regime (GST).
Accordingly, the current financial year 2017-18 is crucial for transitional events as well as carry forward of balances including input tax credit and various compliances which may have ramifications and monetary impact in future for tax payers.
Here are few events which ought to be verified, documented and suitable action taken:
Apart from the aforementioned activities or checklist, it will be imperative upon the assessees to ensure that documents are complete, legally pursuable and invoices etc match with the books of accounts and work orders / contracts etc. All ledger accounts should be reconciled and adjusted, debit or credit notes, as the case may be, issued and duly accounted for. Taking transitional Cenvat Credit (Input Tax Credit in GST) requires TRAN -2 return to be filed before 31st March, 2018 for availing July, 2017 opening stock credit. Thus, filing of TRAN-1 alone would not be sufficient. The purchases should also be matched on GSTN portal before 31st March, 2018. Assessees must also ensure that they claim either depreciation or input tax credit on the tax component in case of capital goods. In case of capital goods other than buildings, depreciation can not be charged on input tax credit component and it should be taken care of. It may also be ensured that e-way bills are generated from 1st April, 2018 and all preparations for the same must be in place.
On input tax credit, it is important to undertake age analysis of payment of tax invoices as unpaid tax invoices should not be more than 180 days old. Actually, all invoices issued prior to 1st October, 2017 ought to be paid to avail input tax credit (as on 31st March, 2018). Input service distributors are required to file GSTR-6 return for July, 2017 – February, 2018 by 31 March, 2018.
In case of exports, letter of undertaking will have to be obtained for this year and next year if exports are to be made without payment of IGST.