Stay compliant with GST regulations. Check out this comprehensive checklist for year-end GST compliances for FY 2022-23 and FY 2023-24.
In this article, the paper writer has summarized the various provisions to be followed under GST law since many changes and amendments are being made in the GST law every day, there are compliances to be followed on a monthly, quarterly, half-yearly & yearly basis. The author has mainly focused on compliances in the form of a checklist for the financial year end 2022-23 and for the financial year beginning 2023-24 as it has a higher chance of missing out.
The areas are divided into the following categories for easy perusal
A. GST COMPLIANCES AT THE START OF THE YEAR
B. REVENUE
C. PURCHASE – INPUT TAX CREDIT
D. ACTION POINTS FOR FY 2022-23
E. RCM
| A. GST COMPLIANCES AT THE START OF THE YEAR | |
| E-Invoice | > E-Invoicing is applicable to the taxpayer having aggregate turnover more than 10 Crores.
> Every person would be required to e-invoice w.e.f. 01-04-2023 where aggregate turnover has exceeded 10 Crores in any of the FY beginning from FY 2017-18 onwards. > E-Invoice to be raised only for supplies made to GST registered person or Exports. > Note: If turnover crossed 10 Crores for the first time in FY 2023-24 then E-Invoicing would be applicable from 01.04.2024 |
| LUT for Exports / supply to SEZs | > Taxpayer has to furnish the LUT every year on the GST portal before effecting the export goods/services or supply to SEZ supply without payment of IGST. > Filing of LUT for 2023-24 is enabled on GST portal, LUT executed for FY 2022-23 will expire on 31-03-2023. > It is suggested to execute on or before 31.03.2023 for FY 23-24 and it will be valid for 1 year. |
| Opting for Composition Scheme | > Regular taxpayers can opt for Composition Scheme for Financial Year 2023-24 on or before 31.03.2023.
> The registered person shall be eligible to opt, if he is not a manufacturer of such goods as notified by the Government. |
| Composition Scheme – Annual Return | > GSTR-4 return for FY 2023-24 for composition scheme to be filed on or before 30.04.2023. |
| GTA to opt for FCM/RCM | > The option by GTA to pay GST under forward charge (5% w/o ITC or 12% with ITC) on the services supplied by it can be exercised by filing Annexure V on or before 15.03.2023 for FY 2023-24.
> The Option once filed cannot be withdrawn during the year and will be applicable for entire FY. > GSTN has issued advisory in this regard and same can be accessed from Advisory on opting for GST payment under forward charge mechanism by GTA |
| New Invoice Series for FY 2023-24 | > Rule 46(b) provides that with the start of new financial year 2023-24 (w.e.f. 01/04/2023), a new series, unique for the financial year is to be started by the GST taxpayers.
> New series to be followed for all documents below a. Tax Invoice b. Credit notes c. Debit notes d. Bill of supply e. Receipt Voucher f. Refund Voucher g. Payment Voucher and h. ISD Invoice > Note: Delivery Challan – Series of FY 2022-23 could be continued however it is suggested to have new series, unique for FY 2023-24 |
| HSN Code | > Taxpayer is required to mandatorily mention 4 or 6 digits HSN code Where turnover in previous FY is
a. Up to 5 Crores – 4 digits b. Above 5 Crores – 6 digits > Where turnover in FY 22-23 has crossed 5 Crores then from 01.04.2023 is required to mention 6 digits HSN code. |
| QRMP Scheme | >Quarterly Returns with Monthly Payment (QRMP) Scheme is for eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on quarterly basis, while paying their tax dues on monthly basis. > Last day to opt in/out of QRMP scheme is 30.04.2023 for Q1 (Apr-June 23). |
| ITC-04 | >Ø To be filed by principal (registered person sending goods for Job work)
Where turnover in previous FY is a. Up to 5 Crores – yearly basis on 25.04.2023 for FY 2022-23 b. Above 5 Crores – half yearly on 25.04.2023 for period 01.10.2022 to 31.03.2023. > Taxpayer is required file above form as it is intimation to Govt, It has to be noted that there is no late fee for the same; a general penalty may be levied where not filed. |
| B. REVENUE | |
| Reconciliation of Revenue | > Revenue reconciliation as per Books vs GSTR-1 vs GSTR-3B filed, treatment of differences etc. to be taken care of on or before 30.11.2023 |
| Missed liability of FY 2022-23 | > The last date to pay or adjust the taxes in relation to the supplies made and invoices issued in FY 2022-23 would be 30.11.2023 or date of filing of GSTR-9 of FY 22-23 whichever is earlier.
> Post that, assessee shall not pay any missed liability of FY 2022-23 through GSTR-3B but is to be paid through the FORM DRC-03. > Note: ITC availment time for customers would lapse post 30.11.2023. |
| Declaring missed invoices of FY 2022-23 in GSTR-1 | > The due date to declare or amend the invoices issued in FY 2022-23 for the supplies made in FY 2022-23 or credit notes pertaining to FY 2022-23 issued till 30.11.2023 in relation to the above invoices is 30.11.2023.
> Post that, it cannot declare such documents in GSTR-1. |
| Debit Note | > Debit note under GST can be issued where the taxable and/ or the tax value in the tax invoice is lesser than the actual value/tax on the supply.
> Taxpayer is required to check for FY 22-23 if any taxes has been short charged to customers then he could raise a debit note now |
| Credit Note | > The last date to issue credit notes (with GST) in relation to the invoices issued in FY 2022-23 is 30th November 2023
> Check whether credit notes is issued for pre-agreed discount as per terms > Note: There is no limit for raising credit notes without GST |
| C. PURCHASE – INPUT TAX CREDIT | |
| Conditions for availment of ITC to be satisfied | > All below conditions to be satisfied for be eligible for ITC
a. Recipient should have a valid Tax invoice (where e-invoice is applicable to supplier then recipient should have invoice with IRN embedded in QR code) b. The details of Tax invoice is appearing in GSTR-2B c. Recipient should have received the goods or services d. The details of ITC is not restricted in FORM GSTR-2B. e. The taxes have been remitted by the supplier to the Government. f. Recipient should have filed return u/s 39 (i.e., GSTR-3B). |
| Purchases Reconciliation | > ITC reconciliation as per books and GSTR-3B to be done at earliest.
> Where any doubtful ITC consultant with experts then take decisions, if any missed same to be availed in GSTR-3B. > Where any ineligible ITC availed but not utilised, then such ITC shall be reversed without any interest. > Where ineligible ITC availed & utilised, then such ITC shall be reversed with interest, Interest from date of utilisation till date of reversal. > Perform invoice level reconciliation Purchase vs GSTR2B vs GSTR3B. > Check for vendors who has not uploaded the purchase invoice and make a follow up with him to include the same in next GSTR-1 (last date for the same is 30.11.2023) > Ensure ITC relating to all invoices is availed based on GSTR-2B only. > Ensure ITC relating to Imports of goods, Import of services, ISD, RCM procurement from unregistered person is availed as per Books even in cases where the same is not available in GSTR-2B. |
| Availment of missed Input Tax Credit for the FY 2022-23
|
> As per section 16(4) of the CGST Act, the ITC on any inward supply for the financial year 2022-23 can be taken on or 30.11.2023 .
> There is an urgent need for every business to evaluate if any credits have been missed out till date. If yes, the same has to be availed before 30.11.2023 so that there is no loss of credit to the company. |
| Reversal of Ineligible ITC | > Taxpayer is required to check whether any ineligible ITC is availed in GSTR-3B, if availed then same needs to be reversed within 30.11.2023 for the invoices/credit notes relating to FY 22-23.
> Interest at 18% needs to be paid from the date of utilization as a debit entry in electronic credit ledger in portal till date of reversal. > No need to pay interest where same was only availed and not utilized. > Examples of ineligible ITC a. Expenses relating to motor vehicle (including insurance, repair & maintenance) having capacity less than 14 persons. b. Food & beverages, health services etc when not obligatory for employer to provide to employees. c. Expenses relating to construction of immovable property. (capitalized) d. Expenses relating to personal consumption, gifts, free samples, stock written off by way of disposal etc. |
| ITC year end Re-calculation in case of Taxable and Exempt Supplies | Computation of annual reversal required under Rule 42
Manner of ITC availment in case of taxable and exempt supplies > The registered person engaged in making taxable, as well as exempted supplies, is required to work out the reversal of ITC requirement as per formula to be applied as a whole for the FY 2022-23 on the aggregate turnover and compare it with the actual reversal made in GSTR-3B. > ITC is short reversed in GSTR-3B a. Reverse the differential ITC in GSTR-3B. b. Interest at 18% needs to be paid from 01.04.2023 or the date of utilization as debit entry in electronic credit ledger in portal (whichever is later) till date of reversal. c. No need to pay interest where same was only availed and not utilized. > ITC is excessively reversed in GSTR-3B a. Avail the same now within time limit 30.11.2023. |
| Payment to vendors within 180 days of invoice | > Where payment is not made to vendor within 180 days from date of invoice then same needs to be reversed.
> Once the payment is made ITC can be reclaimed without any time limit |
| D. ACTION POINTS FOR FY 2022-23 | |
| Birds-eye view | > Reconciliation with GSTR-2B with the ITC availed in the GSTR-3B; > Reconciliation of GSTR-2B with the ITC as per books of accounts; > Review and validation of all expenses and capital assets ledgers to ensure that all eligible credits have been availed; > Review the input tax credit register maintained by the company with the credits figures reported in the periodical GSTR-3B; > Review of all credits which have not been availed by the company considering in the nature of ineligible credits to re-examine if any of those are eligible and hence could be availed; > Review of ITC register to ensure that no ineligible ITC have been taken; > In case of doubtful credits, evaluate the option of availment of credits and its subsequent reversal under protest so that the ITC does not become time bar due to delay in availment [for example, construction services capitalized to immovable property in BoA]; > Review of transactions of the FY 2022-23 liable under RCM {both under section 9 (3) and 9 (4) of the Act} and availment of credits thereon; > Review of final computation of ITC under Rule 42 based on annual turnover so that the differential credits, if any, can be availed before 30.11.2023; > Review of final computation of ITC under Rule 42 based on annual turnover so that the differential credits, if any, can be reversed before within time > Ensure availment of ITC of all imports even if they are not available in GSTR-2B > Availment of eligible credit related to taxable/exported supply > Reversal of credit related to exempted supplies of goods/services [where such supplies done locally in India] every month and also final calculation for reversal at the end of the year; > Input tax credit for the year ended 2022-23 to be availed by earliest of the following 30.11.2023 or filing of annual return of 2022-23; > Reconciliation of the GSTR 3B must also be performed with that of GSTR 1 and books, any discrepancies need to be rectified; > Reconcile the value of input tax credit availed with the books of accounts and Form GSTR-2B. This would also help to identify credits which have not been availed in GSTR-3B and avail the same; |
| E. RCM | |
| RCM | > Check or verify whether all expenses which are liable under RCM has been reported and paid in GSTR 3B of FY 22-23; if not then pay such dues on or before 30.11.2023.
> Identify cases of import of services liable under RCM which are not yet been accounted for and paid. If yes, make pay under RCM and claim ITC in subsequent months return. (Check form 15CA and 15CB) > Check if the tax paid under RCM matches with ITC under RCM. (RCM liability should be more than or equal to ITC under RCM) > Documentation a. Whether self-invoice is issued for procurements of RCM from unregistered vendors – Where not done ITC could be questioned, if availed. b. Check whether payment voucher is issued for all the payments made to RCM vendors (registered/unregistered) |
For any further clarifications reach at Mail – harish.p.devda@gmail.com or harish@kraghu.com
Taxguru – https://taxguru.in/author/harish-p-devdagmail-com/
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