GST Audit Compliance Check List for FY 17-18-for Action to be taken by Taxpayer.
As the industry approaches towards freezing books of accounts for the financial year 2017-2018 and GST law being 9 months old, it is important for the taxpayers to evaluate the transactions parked in the books as per the GST law. This will ensure hassle free transition of businesses to the new financial year 2018-2019 as far as GST compliance is concerned.
For financial year 2017-2018, the GST taxpayer has to be answerable for the compliance in audit i.e. internal audit, statutory audit, tax audit , Audit by Chartered Accountant or Cost Accountant – Rule 80 and Section 35(5), Audit by Tax Authorities – Section 65, Special Audit – Section 66 of CGST Act 2017.
I have prepared the all working actions required for the financial year 17-18 that must be complied by the taxpayers and as auditors need to be scrutinized and verified.
Taxpayers should review the transitional credit carried forward to the GST regime from the existing regime using Form GST TRAN-1 in accordance with the provision laid down in Sec. 141 – 143 of CGST Act 2017.
HSN code would be required to be mentioned in the Tax Invoices to be issued in the new financial year 2018-2019 in the manner stated below – Refer notification no. 12/2017-CT dated 28.06.2017
Maintaining invoicing series unique for the financial year becomes essential for taxpayers registered under GST regime – Rule 46(b) of CGST Rules 2017 narrates such provision related to the issuance of Tax Invoice under GST law
If particulars were wrongly mentioned in any of the documents (Tax Invoice, Credit Note & Debit Note) in any of the previous months should be amended in the return to be filed for March’2018.
Taxpayers should ensure that Tax Invoice and other documents are issued as per the provisions mentioned in Sec. 31 of CGST Act 2017
|Below mentioned is the chart on the due date for filing of returns under GST regime pertaining to the FY 17-18:|
|i) Form GSTR 3B for March’18 – Last date for filing the return is 20th April 2018|
|ii) Form GSTR 1 for Feb’18 – Last date for submitting the details is 10th April 2018|
|iii) Form GSTR 1 for Mar’18 – Last date for submitting the details is 10th May 2018|
|iv) Form GSTR 6 (July’17 – Mar’18) – Last date for filing the return is 31st May 2018|
|v) Form GSTR 4 (Jan’18-Mar’18) – Last date for filing the return is 18th April 2018|
Taxpayers should check with the aggregate turnover for the FY 2017-2018 and the projected aggregate turnover for the FY 2018-2019 in order to determine the return filing cycle for the FY 2018-2019:
Taxpayer can choose any of the option, but once selected the option cannot be changed for the financial year.
The taxpayers who have filed Form GST TRAN 1 and have disclosed the closing stock held as on the appointed day in table 7(a) (7B) and in table 7(d) of Form GST TRAN-1 for which the taxpayer is not in possession of an invoice or any document evidencing payment of duty are required to file the details of outward supplies for six months (July’17-Dec’17) in Form GST TRAN 2 before 30th June 2018 for availing ITC in the manner prescribed in Rule 117(4) of CGST Rules 2017 – Refer Order No. 01/2018-CT dated 28.03.2018
While doing the valuation of closing stock as on 31st March 2018, the input tax credit taken on raw material, consumables, semi-finished goods is to be calculated
While calculating depreciation on the capital goods (other than building), if the ITC has been claimed, then the tax amount should to be ignored.
|i) In case the registered recipient has failed to make payment (full or part) to the registered supplier within a period of 180 days from the date of invoice, proportionate input tax credit to the extent of such non-payment has to be reversed by the registered recipient – Sec. 16(2) of CGST Act read with Rule 37(1) of CGST Rules 2017|
|ii) Where the inputs / input services / capital goods were used partly for effecting exempt supplies and partly for taxable supplies or where such inputs / input services / capital goods were used partly for business purpose and partly for non-business purpose, the attributable amount of ITC used for exempt supplies + non-business purpose shall be reversed by the recipient in the manner laid down in Rule 42(1) & 43(1) of CGST Rules 2017 – Sec. 17(2) of CGST Act 2017 read with Rule 42(2) & 43(2) of CGST Rules 2017|
|iii) Identify the inward supply transactions falling within the ambit of blocked input tax credit – Sec. 17(5) of CGST Act 2017|
Transaction wise reconciliation of outward and inward supply data pushed in the GST Returns with the actual financials should be done. The activity will help in identifying the variance (if any) and to incorporate necessary amendments in the returns to be filed for March’2018
Month wise reconciliation of ITC availed in the Books vs. GSTR 3B should be done.
(Timing difference and value difference) should be identified and appropriate action to be taken
Month wise reconciliation of ITC (B2B) availed in GSTR 3B Vs. ITC auto-populated in Form GSTR 2A should be done. Any variance should be adjusted in Form GSTR 3B for March’2018
An analysis of the gross profit booked for the FY 2016-2017 with that of the FY 2017-2018 should be done to check whether he is trapped in the Anti-profiteering or not.
Unlike the refund provision in the existing regime, a registered person making normal taxable supply cannot claim refund of unutilised ITC as on 31st March 2018. The same has to be compulsorily carried forward to the next tax period.
Further appropriate treatment in accounting records should be given
Taxpayers should ensure that the details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another in the GST regime during a quarter shall be included in FORM GST ITC-04 furnished for that period on or before the twenty-fifth day of the month succeeding the said quarter – Rule 45(3) of CGST Rules 2017
An ISD should ensure that no such invoices are accepted on which tax is to be discharged under reverse charge mechanism
(The writer can be reached at firstname.lastname@example.org)