GST Insight compliance before 31 march 2023 (CA Keshav Maloo & Associated)

Post credit to CA Keshav Maloo & Associated

I. Compliances before 31st March 2023

A. File LUT for zero-rated supplies for F.Y .2023-24

Taxpayers are required to submit a Letter of Undertaking for undertaking zero-rated supplies i.e., export of goods or services or supply to SEZ Units/Developers without payment of IGST every Financial Year. For F.Y. 2023-24, LUT is due to be filed by 31st March 2023 if you are engaged in zero-rated supplies or planning to do it:

Note: ARN generated vide LUT filed should be mentioned in the Tax Invoice raised for Export/SEZ Supplies

B. Opt-in for GST Composition Scheme for F.Y. 2023-24

If you wish to opt for Composition Scheme subject to the fulfilment of criteria and conditions for F.Y. 2023-24, the last date to file CMP-02 is 31st March 2023.
Note: In case of switch from Normal to Composition Scheme, ITC claimed on inputs lying in form of Inputs, WIP, finished goods stock as on 31.03.2023 and capital goods (on reduced percentage basis) is required to be reversed by filing ITC-03 by 30th May 2023.

C. Opt-in or out of QRMP for F.Y. 2023-24

Quarterly Return Monthly Payment or QRMP scheme under GST is a scheme introduced by the Government in its initiative to simplify compliance for
taxpayers. In this scheme, registered persons having aggregate turnover up
to Rs 5 Cr. are allowed to furnish their GST returns on a quarterly basis along with monthly payment of tax under the QRMP Scheme. The last date to opt in or opt-out from the QRMP Scheme is 30th April 2022 for the financial year 2022-23.

D. Declarations to be taken from Goods Transport Agency (GTA) for opting to pay GST under Forward Charge

For FY 23-24, declarations filed by the Goods Transport Agency (GTA) for opting to pay GST under Forward Charge should be obtained and kept in record to justify the reason for non-payment of GST under RCM.

E. Reset Invoice Number Series

As per the GST advisory released in 2019, with the start of the new financial year, GST taxpayers should start a new invoice series, unique for the financial year.

A similar provision is there in Rule 49 of the CGST Rules 2017, in respect of the issue of Bill of Supply by registered taxpayers availing of Composition Scheme or supplying exempted goods or services or both.
If the provisions of Rule 46 or Rule 49 are not adhered to, apart from being a compliance issue, taxpayers may face problems while generating E-Way Bill on the E-way bill system or furnishing their Form GSTR 1 or applying for a refund, etc.

F. Re-calculation of Aggregate Turnover of F.Y. 2022-23 for various compliances related to F.Y. 2023-24

Various decision-making and compliances in GST are dependent upon threshold as per Aggregate Turnover like GST registration, Composition Scheme, QRMP Scheme, E-Invoicing, Rule 86B etc. For F.Y. 2023-24, please make sure that recalculation is done for each of relevant compliances as per aggregate turnover in F.Y. 2022-23 wherever applicable.

G. Year-end reconciliation of Outward Supplies and Inward Supplies

Following reconciliation at the year-end are must:

i. Turnover as per books of accounts vs turnover as per GST returns.
ii. physical stock vs stock as per books of accounts – to identify shortages/ excess stock, if any.
iii. closing balance of ITC as per books of accounts vs closing balance as per GST portal.
iv. Pending ITC not matched with GSTR-2B to be reconciled and then to be transferred in a separate ledger.
In case of any hits and misses, such adjustments in output liability or ITC should be reported in the GST return of March 2023.

Note: In the case of RCM liability, it is suggested to also look for entries appearing in GSTR-2B ticked as ‘RCM’ by Suppliers and ensure that RCM liability has been paid. Further, please report exempted supplies like interest income in GST returns as well.

H. Yearly calculation of reversal of ITC as per Rule 42

In case of any reversal of common Input Tax Credit on account of exempted supplies as per Rule 42, after having undertaken monthly reversal, the annual calculation is required to be done and any excess reversal or short reversal should be duly accounted for in GST returns for March 2023. In case of delay in reporting of additional reversal, if any, Interest would apply from 1st April 2023 onward for common ITC reversals to be done in F.Y. 2022-23

Note: The value of exempted supplies for the purpose of reversal includes the value of the sale of immovable property, a transaction in securities, outward supplies subject to RCM, Restaurant services/outdoor catering services taxable @5%, etc.

II. Other Compliance Points

A. Availment of correct Input Tax Credit for the FY 2022-23

•  Reconciliation of  E-Credit Ledger with books of accounts for FY 2022- 23.
• Check the tax has been correctly calculated and paid under RCM in case of import of services, sitting fees paid to directors, GTA, Security Services, rent a cab, Advocate fees, etc.
• In the compiled data of GSTR 2A/2B, check the status of the date of filing of GSTR-1 and GSTR-3B of the suppliers to know whether your suppliers have filed GSTR-3B to avoid any query from the Department.B. Reporting of correct outward supplies for the FY 2022-23
• Reconciliation of turnover/tax as reported in GSTR 1/ GSTR 3B with books of accounts for FY 2022-23.
• Review the correct HSN/ SAC code and GST rate has been opted.
• Reconciliation of E-way bills generated during the FY 2022-23 with tax invoices reported in GSTR 1.
• Reconciliation of e-Invoices with IRN viz. e-way bills generated viz. reported in GSTR 1.
• Check whether the GST paid on advances received in FY 2022-23 towards the supply of services made or agreed to be made has been properly adjusted in GSTR 1 and GSTR 3B.
• Check whether the goods sent on an approval basis have been either returned within 6 months or sold on issuance of tax invoices.
• In case of material sent for job work, check whether the same has been returned within the time limit prescribed (Inputs – 1 year and Capital goods – 3 years) and the same has been duly reported in ITC 04.

The due date for filing ITC-04 shall be as below:

(1) Those with an annual aggregate turnover of more than Rs.5 crore – October 22 – March 23 due on 25th April 2023

(2) Those with an annual aggregate turnover of up to Rs.5 crore – For FY 2022-23 due on 25th April 2023.

C. Real Estate Sector

To assess the value of all input and input services received from both the registered and unregistered suppliers and if the value of procurements received from registered suppliers is not exceeding 80% of total inward supplies, then the Developer of the project is required to pay GST @18% under RCM for such shortfall (28% in case of cement to be paid on monthly basis). Expenses on which GST is payable under
RCM would be considered as procurements made from the registered persons.

The last date to submit such details for FY 2022-23 is 30th June 2023.