With the increase in departmental audits, growth of the start-up industry and funding, business takeovers, etc., in addition to various aspects, it is extremely important to be tax compliant to avoid any speed breakers on the road to reaching greater heights. We have tried to list down a few important aspects of being ensured under GST as the year 2022-23 has ended which would help either in confirming the fact that you have been compliant or in ensuring that gaps are identified and rectified to become compliant.

 Reconcile your GSTR-1 and GSTR-3B:

The details filled in GSTR-1 and GSTR-3B from April to March should be reconciled. The differences and mistakes should be rectified in the returns before the 30^th The differences could be with regard to differences in taxable value, taxes, disclosure, etc.

 Reconcile your GSTR-1 and books:

The details filled in GSTR-1 from April to March should be reconciled with books. The differences and mistakes should be rectified in returns before the 30^th The differences could be regarding differences in values declared vis-à-vis books, missed invoices, etc.

 Reconcile your GSTR-3B and books:

The details filled in GSTR-3B from April to March should be reconciled with books. The differences and mistakes should be rectified in returns before the 30^th The differences could be with regard to differences in values declared vis-à-vis books and there could also be missed invoices.

4. ITC reversal:

   1. Where a registered person is required to reverse ITC under Rule 42 of the CGST Rules, the annual re-computation should be carried out and the effect should be given in GSTR-3B of April to avoid interest. Monthly reversal could have resulted in an excess reversal or excess availment. The difference credit should be availed or reversed respectively in GSTR-3B of April to avoid interest costs.
   2. Check whether ITC has been reversed in other cases such as write-off of assets, loss or theft of assets, destruction of assets, etc.

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5. Reconciliation of GSTR-3B, GSTR-2B and books:

Ensure that all eligible credits of FY 2022-23 are availed ASAP before 30^th November of 2023 (October 2023 GSTR-3B)

6. Related party transactions:

   Check if the tax on supplies between related parties has been paid even though no consideration was involved between the parties. Certain examples could be as follows:

   1. Services procured from the foreign parent company (liability under reverse charge).
   2. Support services and other services provided to branches/group companies.

7. RCM liability:

   1. Whether RCM liability has been discharged on all the inward supplies liable to GST under reverse charge such as director fee, GTA, sponsorship, security fees, renting of motor vehicle, legal fees, etc.
   2. In the case of a foreign associate enterprise, liability to pay GST under RCM arises on the date of entry in books.
   3. Whether tax paid under RCM has been availed as a credit (provided eligible). If engaged in both taxable and exempted supplies, check if only proportionate credit is availed.

8. Balances:

   Whether balances on the GST portal i.e., electronic cash ledger, electronic liability ledger, and electronic credit ledger are matching with the balances in the books of accounts.

9. Inventory:

   Whether the inventory appearing in books of accounts is the same as physical inventory. The difference could have the following impact:

   1. ITC reversal in case of loss of stock
   2. Gap in accounting
   3. Possibility of identification of any missed credits

10. E-invoice:

    Check if IRN is generated for all the applicable tax invoices. Reconcile the list of IRN generated with the sales register. This is important as an invoice without IRN is not a valid invoice. If aggregate turnover in any FY from July 17 to March 18 to FY 2022-23 exceeds Rs.10 Cr, then e-invoicing provisions are applicable from 1^st April 2023.

11. Other incomes:

    Check the GST implication on other incomes such as compensation, insurance claims, interest on FD, discount, incentive, etc. Ensure GST is paid on such incomes wherever applicable.

12. Disclosure:

    Whether the disclosures in GSTR-1 and GSTR-3B are made properly. For example, export invoices have to be shown in Table 3.1(b) of GSTR-3B and not in Table 3.1(a).

13. Discount/incentive:

    If any credit note has to be issued to the customer against any supplies made in a particular financial year, then ensure that the credit note is issued on or before 31.10 of the following year and disclosed in return not later than October GSTR-3B.

14. LUT:

    Application for/renewal of LUT should be furnished for FY 2023-24 before making any exports/supplies to SEZ without payment of IGST.

15. Export benefits:

    Whether benefits related to exports done in FY 2022-23 have been claimed. The benefits could be exports under GST, RoDTEP, duty drawback, etc.

Compliance under GST has become very important considering the heavy penal consequences which exist under the law. Alongside monthly compliance, an overall review of the compliance annually would ensure lesser non-compliance which in turn would lead to lower demands.

In case of any queries/clarifications, you can reach us at +91 973 969 2999