Arjun (Fictional Character): Krishna, as the festival of Dussehra, is coming soon which is celebrated everywhere, what 10 points should the suppliers and recipients keep in mind while filing GST Returns for the month of September 2021?
Krishna (Fictional Character): Arjuna, the returns of September month are the most significant ones. Taxpayers should keep in mind the following things while filing GST Returns for the month of September.
- Reconciliation of outward supplies disclosed in books and return: Supplier needs to reconcile the differences between the outward supplies disclosed in the return filed for the FY 2020-21 and the books. If any differences exist, then taxpayers need to rectify the same, by making adjustments in GSTR- 1 and GSTR -3B for the month of September 2021. In case the sales are under-reported in returns, report the same by adding the respective invoice in GSTR-1, and increase the taxable value & taxes in GSTR-3B and Vice versa.
- Issuance of credit note: As per the time limit given in Section 34 supplier will not be able to raise credit notes in a case where the tax amount charged or the taxable value reflecting in the tax invoice issued by a supplier for a supply made in FY 2020-21 is detected to exceed the value of such supply made or where the supply made is to be returned, after the due date of the return for the month of September 2021. Therefore, if the supplier desires to adjust the output tax liability owing to the reasons mentioned above, such credit note should be issued within the stipulated time period to prevent the loss of GST paid on such invoice.
- Amendment to GSTR 1: Amendment of the wrong entry of invoice from B2B to B2C or from B2C to B2B in GSTR 1 for the invoice related to the FY 2020-21 if required to be done, same should be made in the return for the month of September 2021.
- Claim of ITC for FY 2020-21: The recipient will not be able to claim any unclaimed ITC on invoices belonging to FY 2020-21 after the due date of return filled for the month of September 2021. So, taxpayers should search for any misplaced or unrecorded invoices on which ITC is not claimed and claim the same in the return for the month of September 2021 to comply with the time for availing ITC as per section 16(4).
- Reversal of ITC as per Rule 42 & 43: Recipients are required to recalculate the reversal of ITC annually as per rules 42, 43 of the CGST rules (on capital goods, inputs & input services) which was used for the making both taxable and exempt supplies or used for both business and non-business purpose and any Short/Excess reversal earlier shall be reversed/claimed in the return for the month of September 2021.
- Payment to supplier within 180 days: As per Rule 37 if after availing of ITC relating to the inward supply of goods or services if the recipient fails to pay for the value of supply (fully/ partly) within 180 days from the date of invoice. Then, full/ proportionate credit is required to be reversed. Accordingly, while filing the return for the month of September 2021, partial or full reversal of ITC is to be done in case of non-payment of any invoice amount vis-à-vis completion of 180 days.
- Reconciliation of taxes paid under RCM: Recipient shall cross-check whether the GST under RCM for all the applicable transactions at the appropriate rate has been paid and claimed the ITC for the same in the Financial Year 2020-21. If not paid so GST under RCM is required to be paid in the return for the month of September 2021.
- Reconciliation with GSTR 2A/2B: To comply with rule 36(4) of the CGST Rules, taxpayers need to prepare reconciliation of GSTR-2A /2B with that of ITC availed in the purchase register for the FY: 2020-21 party-wise, invoice wise, and amount wise (taxable value and tax) reconciliation.
- Reconciliation of TDS and TCS: As per the provisions of sections 51 and 52 which are related to TDS and TCS under GST, reconciliation should be made for the amount of TDS deducted and TCS collected in books and deposited with a government with the provision made in books of accounts. If there is any omission or mistake, follow-up should be taken with the concerned partly for timely deposit/ deduction and disclosure in the return for the month of September.
- Other Misc. Points: In the case of Multi locational entities taxpayers shall ensure whether GST has been paid on all the interstate branch transfers, invoices for the cross charge have been issued, interstate branch transfers are reconciled by matching GSTR 1 with GSTR 2A, and reconciliation of ITC claimed on import with ICEGATE data.
Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?
Krishna (Fictional Character): Arjuna, as of now, there is no option for revising a return in the GST Law. But, the GST department has given the taxpayers, sufficient time to rectify their errors & mistakes, of which September is the deadline. Once the return of September 2021 is filed, no changes or rectifications can be made further. So, taxpayers must reconcile their books and returns & make the final adjustments, if any within the time frame to save interest, penalty, and save themselves from many other compliances.
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