GST update | Year end considerations

Sr. No.

Key point

Description

Way forward

Effective date/ due date

1

Document Series

As per the provisions of GST law, a consecutive document series (i.e. invoices, credit/debit note, delivery challan, receipt voucher, etc.) unique for a financial year is to be maintained. In view of this provision, a new document series would be required for FY 2021-22.

Registered person should ensure to maintain a new series for FY 2021-22.

1 April 2021

2

Letter of Undertaking (‘LUT’)

As per the provisions of GST law, LUT is required to be filed for a financial year for effecting zero rated supplies (i.e. exports and supplies to SEZ unit/ SEZ Developer) without payment of integrated tax. Accordingly, a fresh LUT would be required to be filed by 31 March 2021 for the FY 2021-

22. It is pertinent to note that LUT could be applied online on GST portal through Services>>User services>>Furnishing letter of Undertaking (LUT).

Register person could apply for LUT, functionality to obtain online LUT for the FY 2021-22 is effective on GST portal.

31 March 2021

3

Export Proceeds

As per Rule 96A of the CGST Rules, 2017, where services are exported without payment of IGST under LUT and payment for such services exported is not received in convertible foreign exchange within 1 year from date of export invoices, then the IGST along with interest shall be payable with 15 days of expiry of 1 year period.

A registered person would be required to track the payment of export proceeds within 1 year from the date of invoice to avoid any tax liability and interest.

4

Rule 42 reversal

As per Rule 42 of the CGST Rules, 2017, a supplier is required to recalculate the eligible Input Tax Credit (‘ITC’) for the financial year. The same is required to be computed and reported before furnishing return for the month of September following the end of financial year. In case, post computation of final reversal of ITC, excess ITC was availed, the same is required to be reversed with interest for the period starting from 1 April till the date of payment/reversal.

Registered person should recalculate the rule 42 reversal for the financial year and give the corresponding effect in GSTR-3B of March 2021.

GSTR-3B of March 2021

However, if the aggregate amount of ITC availed is lower than the amount eligible to be availed, supplier can claim such differential ITC.

5

GSTR-9 and GSTR-9C for FY 2019-20

The due date to furnish GSTR-9 and GSTR-9C for FY 2019- 20 has been extended till 31-03-2021 vide notification number 04/2021-central tax dated 28-02-2021.

Registered person should ensue to file the same on or before 31-03- 2021 to avoid any penal provisions.

31 March 2021

6

E-invoice

As per notification no 05/2021- Central tax dated 08-03- 2021, the aggregate turnover limit for E-invoicing has been reduced to INR 50 Crore w.e.f. 01-04-2021.

Registered person having aggregate turnover of more than 50 Crore would be required to generate IRN (invoice reference number) form E-invoice portal.

1 April 2021

7

Dynamic QR code for B2C

Vide notification number 89/2020-Central Tax dated 29-11- 2021, has waived the penalty for non-compliance of QR code provisions for the period Dec 2020 to March 2021, provided registered person complies with the same from 01- 04-2021.

Further, vide circular 146/02/2021 dated 23-02-2021, it has been clarified that registered person having aggregate turnover more than 500 crore would require to mention dynamic QR code on B2C invoices w.e.f. 1 April, 2021.

Registered person should generate and print dynamic QR code on B2C invoices raise on or after 01-04- 2021

1 April 2021

8

QRMP

scheme for Q1 FY 2021-

22

Government has recently introduced QRMP (quarterly return monthly payment) scheme, wherein taxpayers has given the option for every quarter to opt for monthly or quarterly filling of GSTR-1. The window to opt-in or opt-out of QRMP scheme for Q1 of FY 2021-22 is open till 30 April, 2021.

Eligible registered person should opt in or opt out of QRMP scheme before 30 April, 2021.

30 April 2021

9

Option for composition scheme

Eligible registered person could opt in or opt out of composition scheme at the beginning of each financial year. The functionality to opt for composition has been made available for FY 2021-22 in the dashboard of taxpayers at GST Common Portal.

The eligible taxpayers, who wish to avail the composition scheme may opt in for composition.

31 March 2021

10

HSN for B2B supplies

CBIC, vide notification no 78/2020 – Central tax dated 15-10- 2020, has made it compulsory to report HSN/SAC details on supply of goods or services on tax invoices w.e.f. 01-04-2021 in following fashion –

Registered person should ensue to mention 4/6-digit HSN/SAC on invoice and report the same in GSTR-1 w.e.f. 01-04-2021.

1 April 2021

No of digit Aggregate turnover in Supply of HSN code proceeding financial year type

4 Upto INR 5 crore B2B

6 More than INR 5 crore B2B & B2C

The above change of mentioning HSN/SAC code is also required to be captured in Table 12 of form GSTR-1.

11

Year end reconciliation

Considering that a reconciliation statement would be required to be submitted along with annual return, it is advisable that a registered person should schedule a timeline for said reconciliation to avoid any variances later at the time of filing the annual return.

Registered person could consider the following reconciliations:

Outward perspective:

GSTR 3B vs GSTR 1 vs Outward registers

GSTR 1 vs E invoicing data

Inward perspective:

GSTR 3B vs Purchase register

GSTR 6A vs Purchase register

Year end closure activity