Finally, after facing every step of hurdle during past one year of journey of GST, passing through more than 400 changes in form of Notifications, Circulars, Press Releases and Orders, the final goal of every taxpayer is to assess their business records and analyse the mistakes done during the past financial year through the mode of GST Audit (GSTR – 9C) and Annual Return (GSTR – 9) for FY 2017-18.
Undoubtedly, the compliances under the GST law for the month of September 2018 is very critical for all registered persons under GST as many provisions of GST law pertaining to Input Tax credit (“ITC”) availment, issuing debit/credit notes, etc., prescribe last date of corresponding action as earliest of due date of furnishing return for the month of September following the end of FY or furnishing of the relevant annual return (Due date for filing – December 31, 2018).
In this regard, we are summarising herewith key areas that needs due attention before filing of monthly return in Form GSTR-3B for the September month:
1. Identifying ITC availed or not availed or irregularly availed for FY 2017-18:
As per Section 16(4) of the CGST Act 2017 (“CGST Act”), the ITC on any inward supply of goods or services for the FY 2017-18 shall not be available in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under Section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
Considering that the due date of filing Form GSTR-3B for the month of September is October 20, 2018, it is highly important for every business to check and figure out all such transaction(s) on which ITC has not been availed till date.
Key action points:
1. Work out proper reconciliation of ITC as shown under Table 4 of Form GSTR-3B viz-a-viz ITC as per books of accounts and viz-a-viz ITC as per GSTR-2A:
- Identify the credits which have not been claimed or which have been claimed but not shown by the vendor in their return (GSTR-1) – chase the vendor for needful correction required;
2. Review all expenses and capital assets ledgers to identify if any eligible credit has been missed to be availed;
3. Prepare details of eligible & ineligible credit pertaining to Inputs, Input Services and Capital goods for filing annual return in Form GSTR -9;
4. Recheck ITC register maintained by the company to ensure that no ineligible credits have inadvertently been taken in monthly return Form GSTR-3B.
5. Recheck if GST paid under reverse charge in terms of Section 9(3) of the CGST Act and Section 9(4) of the CGST Act [till October 13, 2017] in FY 2017-18 has been availed as ITC to the extent eligible;
6. Ensure that the invoices of vendors which are not paid within 180 days from date of invoice of supplier, have been duly paid and the amount of credit which was reversed due to such non-payment, are again re-claimed upon payment made to the vendor;
7. Avail the amount of eligible ITC missed to be availed in Form GSTR-3B filed for FY 2017-18 in Form GSTR-3B to be filed for September 2018.
2. Final reversal of common credit used for taxable as well as exempted supply of goods or services for FY 2017-18:
In terms of Rule 42(2) of the CGST Rules, 2017, amount of reversal of common ITC on inputs and input services used for making both taxable and exempted supplies, shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year to which such credit relates.
Key action points:
8. Every registered person engaged in making taxable as well as exempted supply of goods or services are required to work out the reversal of common ITC for the FY 2017-18 based on annual turnover, on or before the end of due date of filing of Return for the month of September 2018:
- Any amount of credit extra reversed can be claimed as ITC in the return to be filed for the September month.
- In case of short reversal made, the differential amount of ITC can be reversed now with interest @ 18% per annum for the period staring from April 1, 2018 till the date of payment.
To access full list of key action, please click: http://www.a2ztaxcorp.com/wp-content/uploads/2018/10/Key-15-Action-Points-for-filing-GSTR-3B-for-September-2018_15102018.pdf