Year End Activities to be done in GST for Financial Year 2020-21 –
We are in the penultimate week of Financial year 2020-21. It calls for some activities to be carried out under GST and laws for smooth transition to Financial Year (FY) 2021-22. We have listed down certain important activities for the said transition/ closure of Financial Year 2020-21 –
1. Accounting Software – As per MCA Notification – every Company shall use Accounting Software having feature to record audit trail of each transaction, creating the edit log of changes made and ensuring that the audit trail cannot be disabled (wef 1st Apr 21).
2. E-Invoicing – It will be applicable if aggregate turnover exceeds Rs 50 crores (In any Financial Year 2017-18 to 2020-21)
3. Letter of Undertaking (LUT) – Apply/Renew for Letter of Undertaking (LUT) for 2021-22 on GSTN Portal (required for Exports and SEZ Supplies without payment of GST)
4. Selection of frequency of Return Filing (Only for taxpayers having Turnover below Rs 5 Crores) – Time limit for opting OUT of the QRMP Scheme for Quarter 1 ending June 2021 by 30th April, 2021 (if opted IN for Jan – Mar 2021)
5. HSN Codes on Tax Invoice – If Turnover < Rs 5 Crs – 4 Digits HSN Code; and if > Rs 5 Crs – 6 Digits HSN code
6. Availing ITC in GST – Avail missing ITC for FY 2020-21 before filing GST Return for September 2021
7. Credit Notes – Time limit for issuance of Credit Notes for FY 2020-21 for adjustment of output GST is September 2021.
1. Reconcile ITC as per Books of Accounts and avail any ITC not claimed earlier in GSTR 3B (Specially when ITC is being availed on the basis of GSTR 2A or GSTR 2B)
2. Check the missed ITC to be claimed is populated in GSTR 2A or 2B
3. Follow up with suppliers to report transactions in their GTSR 1 so that same may get populated in your GSTR 2A/2B
4. Any missing ITC for FY 2020-21 to be claimed on or before filing of GSTR 3B for September 2021
5. Review if any ineligible ITC (Blocked credit/ ITC on exempt supplies) is not availed. If such ITC is availed, reverse such ITC along with interest.
6. Review payment to suppliers are not pending beyond 180 days from the supplier invoice. If such ITC is availed and same is not paid within 180 days from date of invoice, then reverse the ITC along with interest. Recredit of such ITC can be availed on subsequent payment to supplier (even post-filing of Return for September 2021). Even proportionate amount is pending to be paid on supplier invoice, proportionate reversal of ITC is to be made on unpaid portion.
7. Check if any supplier is registered under Composition scheme and collected GST. Reverse such ITC along with interest.
8. In case registration of supplier is cancelled for non-payment of taxes or non-filing of returns, send communication to such supplier to that effect
9. Avail any missing ITC on RCM paid (Reconcile RCM paid and ITC availed on such payment)
1. Reconcile turnover (Taxable, Exempt and Non GST supply) with books and Accounts, GSTR 1 and GSTR 3B filed.
2. Reconcile Taxes paid with books and Accounts, GSTR 1 and GSTR 3B filed.
3. Verify the invoices and e-way bill compliance (cases where e-way is required but not generated)
4. Check if IRN is generated for all B2B, Export Invoices and Debit/Credit Notes where E-Invoice provisions are applicable
5. Reconcile Invoices issued to customer with GSTR 1 filed. Remember post filing of GSTR 1 for September 2021, no amendment can be made (Amendment to GSTIN, Invoice Number, Invoice Date, Taxable Value, taxes, etc can be made till filing of GSTR 1 for September 2021)
6. Identify and report any Credit or Debit notes to be reported
7. Pay tax if not paid or short paid along with applicable interest
8. Adjust GST paid on advance with subsequent liability and report same in GSTR 1 and 3B (Applicable on Services)
9. Check if GST is paid on other Income and sale of motor car, assets, etc
10. Reconcile and pay RCM liability
11. Check and reconcile materials sent for Job work (Time limit for return – Inputs – 1 year and Capital goods – 3 years)
12. Remember to file Quarterly ITC 04 returns for Job Work
13. Ensure to prepare Self Invoice for payment made for RCM
1. Check if place of business is correctly reported in GST Registration Certificate
2. Review disclosures on Invoice, Delivery Challan, Receipt Voucher, other documents, etc are as per GST Rules, 2017
3. Reclaim any ITC reversal for suppliers on their subsequent payment
4. Check if Accounts and Records are maintained as per GST Laws
5. Ensure to calculate and pay GST under RCM on import of Services, sitting fees paid to directors, GTA, Security Services, Rent a Cab, Advocate fees.
You may reach out to us and we shall be glad to discuss any of your queries. Emails may be sent to [email protected]
Disclaimer: The content of this document is for general information purpose only. TaxMarvel shall not accept any liability for any decision taken based on the advice. You should carefully study the situation before taking any decision.