GST Amendments for FY 2023-24: Corrections Before Oct 2024

Dear all,

According to the GST Act, there is no provision for filing revised returns. Consequently, once GSTR-1 and GSTR-3B are filed, they cannot be revised. Any necessary corrections, additions, or reductions in outward supplies, Input Tax Credit (ITC) claims, and other fields such as the customer’s GSTIN or the type of tax (IGST, CGST, or SGST) must be made through subsequent returns.

These amendments can be made even after the close of the financial year, but they must adhere to specified deadlines. For the financial year 2023-24, the government permits such corrections in subsequent regular returns until the last date for filing returns for October 2024.

During the filing of GSTR-1 and GSTR-3B for the year 2023-24, it is crucial to address any errors such as incorrect supply of goods or services, inaccurate purchase invoices, wrong amounts, or changes in invoice or tax amounts. Additionally, finalizing the balance sheet for 2023-24 may reveal necessary adjustments such as debit notes, credit notes, or turnover changes. We urge you to inform us immediately of any discrepancies so they can be corrected before the return filing deadline of October 2024.

We request that you promptly review and correct any errors or omissions as detailed below, before the October 2024 filing deadline. Failure to rectify these issues may result in increased interest and penalties.

Therefore, please cross-check your books of accounts and the details submitted during returns filing. Notify us of any corrections needed before the due date. A prompt response will be highly appreciated and will help avoid a last-minute rush.

Thus, any correction in sales, purchases, credit notes, Debit Notes, ITC etc. can be done before October 2024 under provisions of GST Act.

Elaborating below various corrections and omissions for the year 2023-24 to be taken care of:

1. Sales/Services (Outward Supply) [Section 37(3) of CGST Act,2017]

Additions /Amendment in Sales/Services for the period April 2023 to March 2024 can be done latest in the return for the month October 2024.

1. If you have not given details of any sales invoice or credit /debit note in the returns filed or

2. Have erroneously given such details, i.e. Invoice no/GSTN

3. Short payment/ non-payment of taxes,

4. Taxes have not been paid on advances received against services ,

5. Supply made to the registered party (B-2-B) but wrongly shown as unregistered party (B-2-C).

6. Also kindly check if the e-invoices have been duly prepared in all cases as it was applicable

• • w. e.f.1^st Oct, 2020 if the turnover exceed 500 crores,
  • w. e.f.1^st Jan. 2021 if the turnover exceeds 100 crores,
  • w. e.f 1^st April 2021 if the turnover exceeds 50 Crores,
  • w. e.f 1^st April 2022 if the turnover exceeds 20 Crores
  • w. e.f 1^st October 2022 if the turnover exceeds 10 Crores
  • w. e.f 1^st Aug 2023 if the turnover exceeds 5 Crores

2. Reverse Charge Mechanism (RCM) and availment of ITC:

In case of the important supplies of goods / services on which recipient is liable to pay tax under RCM, but same have not been discharged during the F.Y. 2023-24, indicative list of RCM  supplies is as below,

1. Goods Transport

2. Import of Services with consideration or without consideration.

3. Royalty to

4. Security Services by Body corporate.

5. Legal Fees paid to advocates.

6. Rent-a-cab/ Hiring of motor

7. Payment to directors other than salary where TDS is deducted u/s 194J of Income Tax Act,

8. Renting of residential property.

Kindly refer N T 04/2017 of CGST (Rate) for RCM list of Goods, N T 13/2017 of CGST (Rate) for RCM list of Service, N T 10/2017 of IGST (Rate) for RCM list of Service, N T 04/2017 of IGST (Rate) for RCM list of Goods, as updated from time to time for latest list of Goods / services under RCM.

The Input tax credit on such RCM paid can be availed latest till the October 2024 only, post which such ITC may lapse. Kindly make sure you pay the RCM and avail the ITC latest by October 2024.

3. Re-classification of Place of Supply: –

It may happen that, at the time of original invoicing supply has been classified as intrastate and local tax levied thereon, whereas later on it turnout to be interstate and liable for IGST or vice a versa, so as per the provision of the act in such cases,

1. IGST is required to be paid and

2. Also we have to claim the refund of CGST / SGST which was wrongly

However, there will not be any interest implication on the both activities.

4. Credit Notes [Section 34(2) of CGST Act,2017 

Already issued Credit notes-

Credit Notes which have been issued from April 2023 to March 2024 and have not yet been declared in the returns filed can be declared latest in the return for the month of October 2024.

Issuance of Credit notes relating to supply made in F Y 2023-24-

 The credit note relating to the invoices for FY 2023-24 can be latest issued up till October 2024 and reported by 30 Nov 2024 i. In case credit note has been issued for such invoices after October 2024, the credit by way of reversal in tax liability shall not     be available.

5. ITC on Inward Supply [Proviso to Section 38(5) of CGST Act,2017]

 To claim the ITC, it is also important equally important that supplier have paid taxes thereon, and if liability is not discharged, then it may not only result into additional demand of tax but also interest and penalty at the time of assessment.

Therefore, as per recent amendment w e f 01.01.2022 ITC can be claimed only when same is reflected in the GSTR 2B, Further recently CBIC issued advisory for claiming the ITC from GSTR 2B only.

In this connection reconciliation between GSTR -2B (ITC declared by vendor) & GSTR-3B (ITC Claimed by us) for the relevant period has to be done so as to find out the

• Suppliers who has not reported the GST invoices in his / It’s returns. Or
• Supplier reported in the Transaction in GSTR 2B but corresponding invoices are not booked for the year.
• Credit notes issued, resulting in reduction in ITC, but same are either not related to our company or not accounted for by our company.

In all such above circumstances it will have impact on ITC of the company and has to be claimed / reversed in the books of account:

The Input Tax Credit of Purchase/ Expenses / Capital Goods for F.Y.2023-24 can be claimed latest in the return for the month of October 2024.

If any ITC has not been claimed in the return already filed, or wrongly excess ITC has been claimed, now is the last chance to correct the mistake and claim the balance ITC.

6. Obtaining the E-Invoice copies for inward Supply, whenever applicable

In addition, also check if e-invoice has been duly obtained in case the vendors are liable to generate the same. In case if any vendor having prescribed limit of turnover (above Rs.500/100 crores/50 Crores/20Crores/10Crores/5Crores) and not issued e-invoice during the year 2023-24, then claim of ITC is not allowed on non-e-invoice.

7. ITC Reversal-

Input tax credit has to be reversed in the following cases:

A. ITC Reversal as per Rule 42 and Rule 43 of CGST Rules, 2017:

 In case of Input tax credit taken against exempt outward supply (sales), then ITC will be reversed in the proportion of exempt supplies (sales) to total outward supplies (sales).

For Example: If total outward supplies (sales) are Rs.100 and exempt supplies (Sales) are Rs.40 i.e.40% of the total sales is exempt. In this case, 40% of the common ITC will be reversed. (Rule 42 & Rule 43 of CGST Rules, 2017).

This calculation has to be done on month on month basis and reversal of ITC is to be effected in the regular GSTR 3B. further on annual basis same is need to recomputed on the basis of annual ratios, and

• In case of additional reversal of ITC is required on the basis of annual ratios, same has to be done by the 20 Oct 2024.
• In case of Excess ITC was reversed during the year, re-credit of ITC can be done by the 20 Oct 2024.

B. ITC Reversal as per Rule 37 due to non-payment within 180 days to creditors.

If payment to supplier/ creditors is not made within 180 days from the date of issuance of the tax invoice, the ITC on the unpaid amount has to be reversed, with interest @18%.

In order to do this, careful scrutiny of the creditors has to be carried out and the same has to be reported latest till the October 2024 return.

It is also important to note that, though ITC is reversed due to not payment within 180 days, ITC can be reclaimed in future at any time once the payment is done to the supplier. And there is no time limit applicable for the same.

C. Nonpayment of Tax by Supplier on the invoices issued by supplier Rule 37(A)

In case of Invoices issued by the supplier and reported in the GSTR 1, so that invoices are reflecting in our GSTR 2B, but corresponding tax on the same is not paid by 30 Sep 2024. ITC is need to be reversed along with Interest @ 18%  by 30 Nov 2024.

It is important to note that, once the tax is paid by the supplier, re-credit of the previously reversed ITC Can be claimed back.

D. ITC reversal on account of Excess claim of Input tax credit

ITC reversal is also to be made in case of Excess Input Tax credit taken. Interest @ 18% is applicable. E.g. ITC of one purchase bill has been taken twice by clerical error. This excess ITC has to be reversed along with interest @18%.

E. Latest list of Ineligible Input Tax Credit in case of certain Purchases/ Expenses u/s 17(5)

 Motor vehicle and other conveyance except when they are not covered u/s 17(5) used for business

Supply of goods and/or services such as –

i. food and beverages,

ii. outdoor catering,

iii. beauty treatment,

iv. health services,

v. cosmetic and plastic surgery

vi. membership of a club, health and fitness Centre

vii. rent-a-cab,

viii. Passenger vehicle with seating capacity less than 13 persons and expenses related to such vehicle like insurance, Repairs & maintenance

ix. life insurance, health insurance except where it is notified by the Government

x. travel benefits to employees on vacation i.e. leave or home travel

xi. Works contract services when supplied for construction of immovable property, other than plant and machinery, except where it is for further supply of works contract service

xii. Goods or services received by a taxable person for construction of an immovable property on his own account, other than plant and machinery, even though it is used in course or furtherance of business.

xiii. Goods or services or both on which the tax is paid under composition

xiv. Goods or services or both received by a non-resident taxable person except on goods imported by

xv. Goods or services or both used for personal consumption

xvi. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free

F. Re-claim of ITC reversed in 2017-18, 2018-19, 2019-20, 2020-21,2021-22 or 2022-23:

 If any ITC has been reversed in 2017-18, 2018-19, 2019-20,2020-21, 2021-22 or 2022-23 on account of payment not made to vendors within 180 days and this amount is now paid to the vendor during 2023-24, the ITC can be reclaimed in 2023-24 upon making the payment of invoices unpaid.

In case if the payment made to vendors but Re-claim is not made in returns during 2023-24, then, the said Reclaim can be made till October 2024.

G. Export related compliances.

1. Export of Goods with payment of Tax (Without LUT).

 If the goods are goods are exported outside India with payment of Tax option and refund of the same is received directly (after matching mechanism of ICEGATE), it need to check whether the export proceeds are realized within the time limit prescribed as per FEMA.

In case proceeds are not realized, refund received is need to return back within period of 30 days from the date of expiry of time limit of FEMA, along with interest @18% from the date of receipt of refund.

It is important to note that, refund application again can be filed once the export proceeds are realized subsequently.

2. Export of Goods or services under LUT (Without payment of IGST).

If the goods are goods are exported outside India under LUT and refund of accumulated ITC is claimed, it need to check whether the export proceeds are realized within the time limit prescribed as per FEMA.

In case proceeds are not realized, refund received is need to return back within period of 30 days from the date of expiry of time limit of FEMA, along with interest @18% from the date of receipt of refund.

It is important to note that, refund application again can be filed once the export proceeds are realized subsequently.

3. Supply to SEZ (with payment of IGST / under LUT)

As per the recent amendment made in IGST Act, benefit of ZERO Rated supply will be available for the goods supplied to SEZ, only if, the Goods / services are supplied for the authorized operation of SEZ units / SEZ Developer.

In this connection, in case goods / services are supplied to SEZ unit/ SEZ Developer during the F Y 2023-24, authorization letter (endorsement copy) is need to be taken.

Conclusion: Navigating the GST landscape requires diligence and foresight, especially during the transition into a new financial year. By adhering to compliance deadlines, claiming / reversal of ITC, RCM Related compliances, preparing for e-invoicing, Export related claims etc businesses can ensure a smooth assessment of FY 2023-24 and set a solid foundation for FY 2024-25.

Additionally, understanding and applying rules around job work, real estate sector regulations, and export-related compliances are essential for maximizing benefits and minimizing liabilities under GST. With careful planning and compliance, businesses can look forward to a successful and financially sound new fiscal year.

Disclaimer: The information in this document is for educational purposes only and nothing conveyed or provided should be considered as legal, accounting or tax advice. User is advised to apply his/her analytical skills before implementing any or all the suggestions above. The suggestions are given, keeping in mind the present legal position.