Year End Activities in GST for Financial Year 2021-22

We are fast approaching the end of financial year 2021-22. It mandates for some activities to be carried out under GST laws for smooth transition to Financial Year 2022-23. We have listed down certain important activities for the said smooth transition/ closure of Financial Year 2021-22 –

A. Important Activities to be undertaken for FY 2022-23 (April 2022)

1. Letter of Undertaking (LUT) – Apply/Renew for Letter of Undertaking (LUT) for 2022-23 on GSTN Portal (required for Exports and SEZ Supplies without payment of GST)

2. 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 2022 by 30th April, 2022 (if opted IN for Jan – Mar 2022)

3. Availing ITC in GST – Avail missing ITC for FY 2021-22 before the time stipulated in GST Laws (earlier of filing return for September 2022 or furnishing of Annual Return for FY 2021-22).*

4. Credit Notes – Issue credit notes pertaining to FY 2020-21 before the time stipulated in GST Laws (earlier of filing return for September 2022 or furnishing of Annual Return for FY 2021-22).*

*Note – It has been proposed to extend the time limit for availing ITC and issuance of Credit Notes to 30th November of the subsequent FY.

B. GST Input Tax Credit for FY 2021-22

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 Form GSTR 2A or Form 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 Form GTSR 1 so that same may get populated in your GSTR 2A/2B

4. Any missing ITC for FY 2021-22 to be claimed on or before filing of GSTR 3B for September 2022 – It has been proposed to extend the time limit for availing ITC and issuance of Credit Notes to 30th November of the subsequent FY

5. Review if any ineligible ITC (Blocked Input Tax 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 date of supplier invoice. If such ITC is availed without payment within 180 days from date of invoice, then said ITC is to be reversed along with 18% interest. Re-credit of such ITC can be done on subsequent payment to supplier (even post-filing of Return for September 2022).

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)

C. Outward Supplies for FY 2021-22

1. Reconcile turnover (Taxable, Exempt and Non-GST supply) with books of 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, if E-Invoice provisions are applicable

5. Reconcile Invoices issued to customer with GSTR 1 filed. Remember post filing of GSTR 1 for September 2022, 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 2022). – It has been proposed to extend the time limit for amendment to 30th November of the subsequent FY

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, sale of 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 (half-yearly from Dec 21 quarter)

13. Ensure to prepare Self Invoice for payment made for RCM

D. Other Important Aspects – FY 2021-22

1. Check if place of business is correctly reported in GST Registration Certificate

2. Review disclosures on Invoice, Delivery Challan, Self-Invoice, 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.

Also Read : Year End Activities in GST for Financial Year 2020-21