Guide to GST Compliance Review

Name: Guide to GST Compliance Review
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by Madhukar Hiregange

Preface	iii
About the Author	v
Table of Cases	vi
Chapter 1: Introduction to GST - Compliance Review
1.1 Introduction to Compliance Reviews	1
1.2 Legislative Background of Audit in India	2
1.3 Meaning of Audit in GST	3
1.4 Importance of Compliance Review	3
1.5 Advantages of Compliance Reviews	4
1.5.1 To industry/client	4
1.5.2 To the government	5
1.5.3 To consumers	6
Chapter 2: Basic Concepts of GST Law
2.1 Background	8
2.2 Scheme of GST	10
2.2.1 Levy	10
2.2.1.1 Supply	11
2.2.1.2 Activities not amounting to supply of services or goods	11
2.2.1.3 Supply with consideration	12
2.2.1.4 Supply without consideration	12
2.2.1.5 Activities/transactions deemed to be goods or services	12
2.2.2 Reverse charge mechanism	14
2.2.3 Small supplier exemption	14
2.2.4 Composition	15
2.2.5 Special small supplier scheme	16
2.2.6 Inter and intra-State supply	16
2.2.7 Valuation	17
2.2.8 Normal method to arrive – adjusted transaction value (Rule 27)	18
2.2.9 Pure agent supply (Rule 33)	18
2.2.10 Valuation of supply to distinct person (branches/division) or related person (Rule 28)	19
2.2.11 Valuation in case of corporate guarantee	19
2.2.12 Valuation of supply through an agent (Rule 29)	20
2.2.13 Specific valuation methods (Rule 32- optional)	20
2.2.14 Input Tax Credit (ITC) 21
2.2.14.1 Eligibility	22
2.2.14.2 Blocked ITC	23
2.2.14.3 Apportionment	24
2.2.14.4 Is ITC a right or concession?	25
2.2.15 Classification	26
2.2.15.1 Classification principles.	26
2.2.15.2 How to classify under appropriate rate?	28
2.2.16 Exemption	30
2.2.17 Place of supply	31
2.2.18 Time of Supply (TOS)	32
2.2.19 Job work/repair	32
2.2.20 Tax collection at source: E-Commerce Operator (ECO)	33
2.2.21 Tax deduction at source: specified recipients	34
2.2.22 Demand, interest and penalties	34
2.2.23 Personal hearing	35
2.2.24 Appeals and revision	36
2.2.25 Any alternative to litigation?	37
2.3 State-Wise Threshold Limits for Obtaining Registration for Different Category of Suppliers Making Supply in Such States	37
Chapter 3: Professional Opportunities in GST
3.1 Background	39
3.2 Professional's Advantage	41
3.3 Professional's Role	42
3.4 Types of Services	46
3.4.1 Review/Audit/Certification	46
3.4.2 Consultancy/Advisory Services	47
3.4.3 Assistance/Compliance Services	48
3.4.4 Outsourcing Service	49
3.4.5 Dispute Resolution	49
3.4.6 Teaching/Training	50
3.4.7 Due Diligence	51
3.4.8 Drafting	51
3.4.9 Project And Transaction Structuring	52
3.4.10 Support In Automation	53
3.4.11 Others	54
3.5 Conclusion	54
Chapter 4: Relationship between Periodical Returns, Annual Returns and GST Reconciliation Statement
4.1 Introduction	55
4.2 Relationship Between Periodical Returns (GSTR-9 & 9B) And Reconciliation Statement (GSTR-9C)	55
4.2.1 Form GSTR-1 - Statement of Outward Supplies	56
4.2.2 Form GSTR-3B – Summary of Outward Supplies, Input Tax Credit & Payment of Taxes	56
4.2.3 Importance of Form GSTR-1 and GSTR-3B	57
4.2.4 Form GSTR-9 - Annual Return Providing Details Submitted in GSTR-1 and GSTR-3B and Books	58
4.2.5 GSTR-9C - Reconciliation Statement Reconciling Differences Between Books of Accounts and Annual Return	59
Chapter 5: Types of Audit and Reviews under GST
5.1 Introduction	61
5.2 Audit By Department - Section 65 of the CGST/SGST Act	62
5.3 Key Features of GST Audit by Department	63
5.4 Special Audit - Section 66 of the CGST/SGST Act	64
5.5 Procedure of Ordering Special Audit and Submission of Special Audit Report	66
5.6 Preventive Management Reviews	66
5.7 Area-Specific Reviews	68
5.7.1 Due Diligence Reviews	68
5.7.2 Systems and Processes Reviews	68
5.7.3 IT/ERP Systems Review Including Data Security	69
5.7.3.1 Importance of Data Security	69
5.7.4 Follow Up Review	71
5.7.5 Investigative Review	71
Chapter 6: Review Process, Methodology and Approach in GSTR-9C Support
6.1 Introduction	72
6.2 Methodology and Process for Conduct of Health Check Review	72
6.3 Stage 1: Preliminary Discussion with Management	72
6.3.1 Techniques for Gathering Information	73
6.4 Stage 2: Obtaining Information from the Client	75
6.4.1 Utilization of Knowledge of the Entity	76
6.5 Stage 3: Desk Review	77
6.5.1 Benefits of Desk Review Under GST	77
6.5.2 Important Information to be Obtained	78
6.6 Stage 4: Assessment of Risks	79
6.6.1 Procedures to be Followed in Risk Assessment	79
6.6.2 Various Type of Risks	79
6.6.2.1 Inherent Risks	80
6.6.2.2 Control Risks	81
6.6.2.3 Detection Risks	82
6.6.3 Response to the Assessed Risks	83
6.6.3.1 Completeness Tests	83
6.6.3.2 Duplication Tests	83
6.6.3.3 Classification Tests	83
6.6.3.4 Valuation Tests	83
6.6.3.5 Data Analytics	84
6.7 Stage 5: Review Plan and Review Program	84
6.7.1 Review Plan	84
6.7.2 Contents of the Review Plan	85
6.7.3 Review Program	85
6.7.4 Preparation of Review Program	85
6.8 Stage 6: Work at the Office of Client	86
6.8.1 Venue	87
6.8.2 Examination of the Records	87
6.8.3 Planning of Time to be Spent.	88
6.8.4 Reviewer's Responsibilities on the Visit	88
6.8.5 Client's Responsibility on the Visit of Reviewer	89
6.9 Stage 7: Tools and Techniques for Conducting a Review	89
6.9.1 Review Tools	89
6.9.2 Internal Control Questionnaire (ICQ)	89
6.9.3 Review Program	90
6.9.4 Review Checklist	90
6.9.5 Computerised Tools	90
6.9.6 Reviewing Techniques	93
6.9.7 Analytical Review Procedures	93
6.9.8 Sampling Technique	95
6.9.9 Inspection of Documents and Records	95
6.9.10 Physical Verification	96
6.9.11 Inquiry and Confirmation	96
6.10 Stage 8: Review Documentation and Working Papers	96
6.10.1 Purposes of Review Documentation	97
6.10.2 Contents of Review Working Papers	97
6.10.3 Other Important Aspects to be Considered	97
6.10.4 Draft GST Review Report	98
6.11 Stage 9: Draft Report and Obtaining Management Comments	98
6.11.1 Draft GST review report	98
6.11.2 Obtaining management comments	99
6.12 Stage 10: Preparation of Final Review Report	100
Chapter 7: Internal Controls
7.1 Introduction	101
7.2 Standard on Internal Audit	101
7.3 GST Internal Control Questionnaire (ICQ)	103
7.3.1 Standard Operating Procedure (Sop)	103
7.3.2 Authorised Person	103
7.3.3 Correspondence with the Department	104
7.3.4 Tax Accounting	104
7.3.5 Vendor Management - Review of Contracts	105
7.3.6 Composite Supply or Mixed Supply and Classification	106
7.3.7 Rate of Tax	106
7.3.8 Place of Supply	106
7.3.9 Value of Supply	107
7.3.10 Free Supply	107
7.3.11 Advance Money Receipts	107
7.3.12 Penalty or Interest for Late Payment by Customers	108
7.3.13 Escalation Clause in Supply Agreement	108
7.3.14 Related Person or Distinct Person Transactions	108
7.3.15 Input Tax Credit Management	109
7.3.15.1 General Issues	109
7.3.15.2 Credit of Tax Paid on Capital Good	111
7.3.16 Stores Management	111
7.3.17 Input Service Credit Distribution (ISD) in GST	112
7.3.18 GST Cash Ledger Management	113
7.3.19 Job Work Removals	113
7.3.20 Job Work Services for Others	115
7.3.21 Stock Transfer/Agent Management	115
7.3.22 Sales/Outward Supplies Including Continuous Supply and E-Commerce	116
7.3.23 Warranty Removals	117
7.3.24 Non-Receipt or Short Receipt of Consideration	118
7.3.25 Accounting of Cash Payments / Receipts	118
7.3.26 Receipts in Convertible Currency	118
7.3.27 Supplies to and from SEZ	119
7.3.28 Refund	119
7.3.29 Employee Supplies and Expenses Recovery	120
7.3.30 Reverse Charge Mechanism	120
7.3.31 Records Management	120
7.3.32 Investments Made	121
7.3.33 Assessment of GST	121
7.3.34 The Issue of Invoice, Bill of Supply etc	121
7.3.35 ERP and Audit Trail in ERP Application	122
7.3.36 Compliance in Return Filing	123
7.3.37 Audit reports of GST department and special audit under section 66	123
7.3.38 Previous Report Compliance where the Entity Gets Periodical GST Reviews done	123
7.4 Customs Related Internal Control Questionnaire	124
7.4.1 Customs Broker	124
7.4.2 Assessment	124
7.4.3 Valuation of Goods	124
7.4.4 Warehousing of Good	125
7.4.5 Export of Goods	125
7.4.6 Disputes with Customs	126
Chapter 8: Accounts, Records and Documents to be Maintained
8.1 Introduction	127
8.2 Verification of Accounts and Records in Audit	127
8.2.1 Examination of the Various Records/Documents Maintained	128
8.3 Various Accounts, Records and Documents to be Maintained	129
8.3.1 Records to be Maintained	129
8.3.2 Documents to be Maintained	131
8.3.3 Accounts, Records, Documents in Electronic form	132
8.3.4 Places where Records to be Maintained	133
8.3.5 Period of Retention of the Accounts & Records	134
8.4 Contravention of the above Requirement to Maintain Accounts, Records and Documents	134
8.5 Checklist of Various Accounts, Records and Documents to be Verified while Compliance Review	135
8.6 Key Checkpoints for Auditor in Various Accounts and Records Maintained	136
8.6.1 Outward Supplies	136
8.6.2 Inward Supplies	137
8.6.3 Reverse Charge	139
8.6.4 Other Correspondences	139
8.7 Recommended Formats of Sales Register, ITC Register and RCM Register	140
Chapter 9: Outward Supply
9.1 Introduction	142
9.2 Verification of Financial Statements	142
9.2.1 Ratios	142
9.2.2 Levy of GST	143
9.2.2.1 Determination of Nature of Supply and Taxability	143
9.2.2.2 Inter-Branch Transactions	144
9.2.3 Classification	144
9.2.4 Rate of Tax, Claims for Exemption and Tax Paid	145
9.2.5 Invoice/Bill of Supply	146
9.2.6 Time of Supply (TOS) of Goods	146
9.2.7 Time of Supply of Services	147
9.2.8 Valuation: Invoice Verification	147
9.2.9 Valuation: Other than Invoice Verification	148
9.2.10 Place of Supply	150
9.2.11 Zero Rate Supplies and Deemed Exports	153
9.2.12 Credit Note	155
9.2.13 Debit Note	156
9.2.14 Royalties	157
9.2.15 Sale of Waste/Scrap	157
9.2.16 Supply of Capital Goods	158
9.2.17 Employee Recoveries	159
9.2.18 Electronic Commerce	160
9.2.19 Receipts in Convertible Currency	161
9.2.20 Financial Transactions	161
9.2.21 Mergers/Acquisitions/Amalgamations	162
9.2.22 Bank Statement/Reconciliation	163
9.2.23 Barter	164
Chapter 10: Inward Supply - ITC
10.1 Eligibility and Conditions for Availing Input Tax Credit	165
10.1.1 Eligibility for claiming input tax credit	165
10.1.2 Conditions for claiming input tax credit	166
10.1.3 Other conditions relating to claim of input tax credit	167
10.1.3.1 Input tax credit for goods received in lots/ instalments	167
10.1.3.2 No input tax credit if depreciation is claimed	167
10.1.3.3 Payment of amount within 180 day	167
10.1.4 Tax paid in pursuance of order invoking longer period-not allowed as credit	168
10.1.5 Time limit for taking input tax credit [Section 16(4)]	168
10.2 Manner of Utilizing Input Tax Credit	169
10.3 Apportionment and Reversal of Input Tax Credit [Section 17 Read with Rules 42 & 43]	169
10.3.1 Restriction on credit for non-business purpose [Section 17(1)]	169
10.3.2 Restriction on credit for exempt supplies [Section 17(2)]	170
10.3.3 Value of exempt supply [Section 17(3)]	170
10.3.4 Manner of determination of input tax credit in respect of inputs or input services and reversal thereof [Rule 42]	171
10.3.5 Manner of determination of input tax credit in respect of capital goods and reversal thereof [Rule 43]	171
10.4 Blocked Credits	171
10.5 Availability of Credit in Special Circumstances [Section 18]	176
10.5.1 Claim of input tax credit in case of new compliant registrants	176
10.5.2 Claim of input tax credit in case of voluntary registration.	176
10.5.3 Input tax credit in case of composition taxpayer converting into regular taxpayer	176
10.5.4 Input tax credit in case of exempt supply converting into taxable supply	176
10.6 Transfer of Credit on Obtaining Separate Registration for Multiple Places of Business [Section 25(2) Read with Rule 41A]	177
10.7 Manner of Claiming Credit [Rule 40].	177
10.7.1 Reduction of input tax credit on capital goods by 5% points per quarter	177
10.7.2 Filing of declaration in Form GST ITC-01	177
10.7.3 Declaration to contain specified details	177
10.7.4 Certification of declaration	178
10.7.5 Verification of input tax credit claimed	178
10.8 Transfer of Input Tax Credit in Case of Change in Constitution of Business [Section 18(3) R/W Rule 41].	178
10.8.1 Furnishing Form GST ITC-02	178
10.8.2 Apportionment in the ratio of value of assets in case of demerger.	178
10.8.3 Certification of transfer of liabilities	179
10.8.4 Acceptance of details by transferee	179
10.9 Payment of Input Tax Credit in Case Regular Taxpayer Switching to Composition Scheme or Supplies Become wholly Exempt [Section 18(4) R/W Rule 44]	179
10.9.1 Manner of reversal of credit where regular taxpayer opts for composition scheme or supplies become wholly exempt (Rule 44)	179
10.10 Payment of Input Tax Credit on Supply of Capital Goods [Section 18(6)]	180
10.10.1 Tax on transaction value on supply of capital goods as scrap	180
10.10.2 Manner of claiming credit in special circumstances [Rule 40]	180
10.10.3 Manner of reversal of credit under special circumstances [Rule 44]	181
10.11 Input Tax Credit in Respect of Inputs and Capital Goods Sent for Job-Work [Section 19 Read with Section 143 and Rule 45]	181
10.11.1 Conditions and restriction in respect of inputs and capital goods sent to the job worker [Rule 45]	182
10.12 Credit by Input Service Distributor	182
10.12.1 Manner of distribution of credit by input service distributor [Section 20 r/w Rule 36]	182
10.12.2 Conditions	183
10.12.3 Procedure for distribution of input tax credit by input service distributor	183
10.12.4 Manner of recovery of credit distributed in excess [Section 21]	185
10.13 Reversal of ITC on Non-Payment by Supplier [Rule 37A].	185
10.14 Electronic Credit Reversal and Reclaimed Statement (ECRRS).	186
10.15 RCM Liability/ITC Statement	186
10.16 Invoice Management System (IMS)	186
10.17 Manner of Dealing with Doubtful ITC	187
10.18 ITC Review Checkpoints	188
10.19 ITC-Inputs/Input Services	188
10.20 ITC - Capital Goods	191
10.21 Input Service Distribution	192
10.22 Imports of Goods / Services	193
10.23 Employee Expenses	194
10.24 Bank Statement	195
10.25 Reconciliation	195
10.26 Ratios and Management Information System (Mis)	196
Chapter 11: Reverse Charge
11.1 Introduction	197
11.2 Forward Charge vs Reverse Charge	197
11.3 Levy vs Liability	198
11.4 Statutory Provisions	198
11.5 Reverse Charge on Supply of Goods	199
11.6 Reverse Charge on Supply of Services	199
11.6.1 Import of Services	202
11.6.2 Services by Goods Transport Agency	202
11.6.3 Legal Services	203
11.6.4 Sponsorship Services	203
11.6.5 Services Supplied by the Central Government, State Government, Union Territory or Local Authority to a Business Entity Except Specified Services	204
11.6.6 Services Supplied by a Director to Body Corporate	205
11.6.7 Ocean Freight (FOB and CIF)	205
11.6.8 Security Services	206
11.6.9 Renting of Motor Vehicle	206
11.6.10 Residential Dwelling Services	206
11.7 Documents to be Issued	207
11.7.1 Self-Invoice/Invoice Received from Unregistered Persons	207
11.7.2 Payment Voucher	207
11.8 Disclosure in the Returns	207
11.9 Delayed Payment of Reverse Charge Liability and ITC Eligibility	208
11.10 Relevant Judicial Pronouncements	208
11.10.1 Service Provider's Defence	208
11.10.2 Freight Charges	209
11.10.3 Levy of Service Tax is on Rendering to Taxable Service and not on Person	209
11.10.4 Service Tax Paid on GTA Services by Service Provider	209
11.10.5 Wrongly Paid Tax on non-Taxable Services on Reverse Charge Basis	209
11.10.6 Liability on GTA is on the Person who is Liable to Pay the Freight	209
11.10.7 Consignment Note was not Issued	210
11.10.8 Sponsorship is an Input Service	210
11.10.9 Services of Whole Time Director not Liable Under Reverse Charge	210
11.10.10 Providing Cash Van Along with Security Guards is not Security Service	210
11.11 Verification of Reverse Charge Mechanism	210
Chapter 12: Refunds
12.1 Introduction	212
12.2 Types of Refund	212
12.2.1 Refund of Unutilised ITC in Case of Zero Rate Supplies	212
12.2.2 Refund in Case of Inverted Tax Structure	212
12.2.3 Refund to Supplier/Recipient under Deemed Exports	213
12.2.4 Refund of IGST to International Tourist	213
12.3 Verification of Refund During Review	213
Chapter 13: Procedural Aspects
13.1 Registration Under GST	216
13.1.1 Introduction	216
13.1.2 Compliance Checkpoints	216
13.2 Returns Under GST	218
13.2.1 Introduction	218
13.2.2 Returns for Regular Taxpayers other than Casual Taxable Person	221
13.2.3 Returns for Composite Tax Payers	223
13.2.4 GSTR-9A (Annual Return-Composition Scheme) was Applicable only for FY 2017-18 & 2018-19. FY 2019-20 Onwards GSTR 4 itself was Converted into an Annual Statement. Returns for non-Resident Taxpayers	223
13.2.5 Returns for Online Information and Database Access and Retrieval Services	224
13.2.6 Returns for Input Service Distributor	224
13.2.7 Returns for Tax Deductor	224
13.2.8 Returns for E-Commerce	224
13.2.9 Final Return	225
13.2.10 Returns for Government Departments and United Nation Bodies	225
13.2.11 Additional Measures and Late Fee	225
13.3 Records Under GST	226
13.3.1 Introduction	226
13.3.2 Proforma for Different Types of Records	229
13.3.2.1 Inward Supply (Purchase Register)	229
13.3.2.2 Outward Supply	230
13.3.2.3 Statement of Advances Received and Adjusted (Refer - GSTR-9C Reconciliation Statement - Part A - Pt. - 4 –F)	231
13.4 Documentation Under GST	231
13.4.1 Introduction	231
13.4.2 Checkpoints	232
13.4.3 Contents of the Invoices	236
13.4.3 Documentation For ITC	237
13.5 Payment Under GST	239
13.5.1 Introduction	239
13.6 Payment Under Protest in GST Regime	240
Chapter 14: Reconciliations
14.1 Introduction	243
14.2 Reconciliation of Supply (after Considering the Returns) on which Output Tax is Payable	244
14.2.1 Reconciliation of Outward Taxes Accounted in Books vs Outward Taxes in Returns	246
14.2.2 Reconciliation of Rate Wise Break up of Taxes on Outward Supplies	247
14.2.3 Reconciliation of Taxable Values as per Books and Returns	247
14.3 Reconciliation between GSTR-1 to GSTR-3B	247
14.4 Identification of Disclosure Errors between GSTR-3B and GSTR -1 for Normal Registered Person (other than Person Registered as SEZ)	250
14.4.1 Reconciliation of Outward Supplies as per GSTR-1 and GSTR-3B (Taxable Values)	250
14.4.2 Reconciliation of Taxes on Outward Supplies as per GSTR-1 and GSTR-3B (Tax amount)	251
14.5 ITC Review - GST	251
14.5.1 Steps in ITC Review	253
14.5.2 Common Errors in ITC	256
14.6 Reconciliation of Expenses on which ITC is Available	259
14.7 Reconciliation of ITC	261
14.7.1 Reconciliation of ITC Accounted in Books vs ITC Availed in Returns	264
14.7.2 Reconciliation of ITC Availed vs ITC Utilized	264
14.7.3 Reconciliation of ITC In Books vs ITC in Electronic Credit Ledger	265
14.8 Reconciliation Between GSTR-2B and Books of Account	265
14.9 Identification and Reverse Charge Reconciliation	267
14.9.1 Reconciliation of RCM Accounted in Books vs RCM in Returns	271
14.9.2 Reconciliation of RCM Payment vs RCM Credit Availed.	271
14.9.3 Reconciliation of RCM on Transport Expenses	272
14.9.4 Reconciliation of Rate Wise Break up of Taxes Under RCM	272
14.9.5 Reconciliation of RCM Liability Accounted in Books vs RCM Liability Reflected in GSTR-2B	273
14.9.6 Reconciliation of RCM Liability Accounted in Books vis-a-vis its Reflection in GSTR-2B	273
14.10 Job Work Reconciliation	274
14.11 E-Way Bill Reconciliation	275
14.12 E-Invoicing Reconciliation	277
14.13 Exports Reconciliation	278
14.13.1 Reconciliation with Table 6A of GSTR-1	278
14.13.2 Reconciliation with Shipping Bill	278
14.13.3 Reconciliation of Export Invoices and BRCS/FIRCS	278
14.13.4 Reconciliation with Export General Manifest (EGM) Data at ICE Gate	279
14.13.5 Reconciliation with the E-Way Bills Generated	279
14.14 Reconciliation with Scrip's Obtained under Foreign Trade Policy	279.
14.15 Refunds Reconciliation	279
14.16 Reconciliation with Electronic Credit/ Liability Ledger	280
14.17 Reconciliation with the Shipping Bill Data	280
14.18 Other Reconciliations	281
Chapter 15: Common Errors to be Avoided in GST
15.1 Introduction	283
15.2 Conceptual Errors	283
15.3 System Errors	290
15.4 Compliance Errors	294
15.5 Errors in GST Annual Return	295
Chapter 16: Important Year End Action Points in GST
16.1 Introduction	298
16.2 Cross Charge to Related/Distinct Persons & ISD	298
16.3 Review of ITC Ledger and Vendor Invoices	299
16.4 E-Way Bill Compliance and Reconciliation	300
16.5 ITC Reversal and Year-End Adjustments	301
16.6 Reconciliation	302
16.7 GST Payment Under Reverse Charge	302
16.8 Issue of Debit/Credit Note	302
16.9 Return Filing for the Month of October	303
16.10 Track of Goods Sent for Job Work	305
16.11 GST Payment by Builders/Promoters under Reverse Charge Mechanism for Shortfall from 80%	305
16.12 Other Aspects	305
Chapter 17: Sample Review Report
17.1 Introduction	308
17.2 Different Heads of Report	308
17.2.1 Executive Summary	308
17.2.3 Review of Previous Report Compliance	308
17.2.4 Conceptual Report	308
17.2.5 Systems Report	308
17.2.6 Transaction Report	308
17.2.7 Annexures to the Report	309
17.2.8 Limitation	309
17.3 Sample GST Compliance Review Report Template	309
Chapter 18: Customs Audit
18.1 Introduction	316
18.1.1 Audit in Customs	316
18.1.2 Consequences of the Changes.	317
18.1.3 Possible Solutions for Better Compliance under Customs Law Could be as Follows:	318
18.1.4 Importance of Periodical Internal Customs Review	319
18.1.5 Post Clearance Audit of Customs	319
18.2 Customs Review Programme	320
18.2.1 Importer/Exporter	321
18.2.2 Customs Broker	329
18.2.3 Warehouse	330
Chapter 19: Certifications under GST
19.1 Introduction	332
19.2 Authenticity and Reliability of the Certificates Issued by the Professionals	333
19.3 Certification of the ITC Claimed Under Special Circumstances	335
19.4 Certification on Transfer of Credit on Sale, Merger, Amalgamation, Lease or Transfer of a Business (Rule 41(2))	337
19.5 Certification on Reversal of Credit Under Special Circumstances (Section 18(4) read with Rule 44)	337
19.6 Application for Refund of Tax, Interest, Penalty, Fees or any other Amount (Rule 89(2))	339
19.7 Certification for Claiming of Reimbursement of Tax Paid Under 'Seva Bhoj Yojana' (C.B.I. & C. Circular No. 75/49/2018-GST, Dated 27-12-2018)	340
19.8 Certification in Case of Mismatch of ITC Between GSTR-3B and GSTR-2A	341
19.9 Certification to Claim GST Deduction Towards Credit notes Issued to Recipients	344
Chapter 20: Departmental Audit
20.1 Introduction	346
20.2 Statutory Powers and Obligations	347
20.2.1 Powers of Departmental Officers	347
20.2.2 Obligations of the Taxpayer	348
20.3 Preparations for Audit	348
20.4 Tips to Taxpayers/Professionals before, During and follow up of ahe Audit	350
Chapter 21: Important Judgements Relevant for GST
21.1 Introduction	353
21.2 General	353
21.2.1 Interpretation of Exemption Notification	353
21.2.2 Availability of Exemption	353
21.2.3 Power of DRI to Issue SCN Under Customs	354
21.3 Levy of GST	354
21.3.1 Doctrine of Mutuality	354
21.3.2 Revenue Sharing with min. Guarantee	354
21.3.3 Online Fantasy Games	354
21.3.4 Levy of GST on Liquor License	355
21.3.5 C-Forms Issued for High-Speed Diesel [HSD]	355
21.3.6 No Levy on Undivided Land Value	355
21.3.7 Levy of Market Fee - Post GST	356
21.3.8 Levy of Entertainment Tax - Post GST	356
21.3.9 Levy of IGST on Import of Oxygen Concentrators	356
21.3.10 Levy of GST Under RCM on Ocean Freight	356
21.3.11 Reciprocity of Obligations is Necessary to Make a Supply	357
21.3.12 Actionable Claim	357
21.3.13 Supply of Food to Employees	357
21.3.14 Activities Carried out by Liaison Office	358
21.3.15 Liquidation Damages - Levy of GST.	358
21.3.16 Medicines, Implants etc. used in Medical Treatment is a 'Composite Supply' of Healthcare Services	358
21.3.17 Expenses Reimbursed to Employees on Company's behalf does not Attract any GST	358
21.3.18 Levy of GST on Goods in DFS	358
21.4 Valuation	359
21.4.1 Retention of Sale of by-Products	359
21.4.2 Value of Reimbursements - not Taxable	359
21.4.3 Betting Amount in Racing	359
21.4.4 Lotto Valuation	360
21.5 Place of Supply	360
21.5.1 Decision Relating to Movement of Goods to Determine Place of Supply	360
21.5.2 Over the Counter Sale	360
21.6 Input Tax Credit	361
21.6.1 Interest on Unutilized ITC	361
21.6.2 Inverted Duty Structure - Capital Goods and Services	361
21.6.3 Credit Cannot be Denied on Technical Grounds	361
21.6.4 Input Tax Credit a Vested and Indefeasible Right	361
21.6.5 ITC on Construction of Building can be Availed	361
21.6.6 ITC Need not be Reversed in Respect of Process Losses	362
21.6.7 Recovery of ITC from Recipient when Supplier has not Made Payment of Tax	362
21.6.8 Restoration of ITC to Credit Ledger	368
21.7 Procedure Related Judgements	363
21.7.1 Correction of GSTR-3B of Earlier Period	363
21.7.2 Rectification of Returns.	363
21.7.3 Department has no Right to Point Out Deficiency in Refund Application after 15 Days	363
21.7.4 SEZ not Barred from Claiming Refund.	363
21.7.5 Electronic Credit Ledger cannot be Blocked in Excess of One Year	364
21.7.6 Blocking of Credit Ledger Under Rule 86A	364
21.8 Royalty is not in the Nature of Tax	364
21.9 Ambulance Service Cannot be Called as Rent-A-Cab Service	364
21.10 Aspect Theory	365
21.11 Parallel Proceedings (Principles of Comity)	365
Chapter 22: Introduction to Annual Returns
22.1 Introduction	366
22.2 Persons Required to File Annual Return	368
22.3 Manner of Filing the Annual Return	369
22.4 Impact of Annual Return on Reconciliation Statement	370
22.5 Consequences of non-Compliance	371
22.6 Revision of Annual Return	371
Chapter 23: Role of Assessees and Professionals in filing Annual Return
23.1 Role of Assessee in Filing the Annual Return	372
23.2 Role of Professionals in Filing Annual Return	374
Chapter 24: Good Accounting Practices for ease in Preparation & Filing of Annual Returns and Reconciliation Statement
24.1 Introduction	376
24.1.1 Inward Supply	376
24.1.2 Outward Supply.	377
24.1.3 RCM/Import of Goods/Import of Services	378
24.1.4 Receipt of Advances for Goods or Services	378
24.1.5 Debit/Credit Note/Discounts Transactions	379
24.1.6 Reporting of the GST Transactions	379
24.2 Good Accounting Practices for Recording of the GST Transactions	379
24.3 Performance of Key Reconciliations at Periodic Intervals.	380
24.4 Tax Efficient Accounting	381
Chapter 25: Clause by Clause Analysis of Annual Return - Form GSTR-9
25.1 Source Data for Filing Annual Return	387
25.2 Basic Steps before Filling Annual Return for Filing	387
25.3 Broad Structure of Annual Return	391
25.4 Details Required in the Annual Return	394
25.5 Clause by Clause Analysis of GSTR-9 Form	394
25.6 Details not Required to be Furnished in the Annual Return	459
Chapter 26: Clause by Clause Analysis of Annual Return - Form GSTR-4
26.1 Details Required In The Annual Return	461
Chapter 27: Annual Return - Form GSTR-9B	464
Chapter 28: Steps in Filing of Annual Returns on GST Common Portal
28.1 Steps in Filing the Annual Return Directly on Portal	465
28.1.1 Download Form GSTR-1, Form GSTR-3B, Form GSTR-9 Summary and Table 8A Document Details	465
28.1.2 Enter Details in Various Tables	466
28.1.3 Preview Form GSTR-9 Summary (Pdf/Excel)	467
28.1.4 Compute Liabilities and Pay Late Fees (if any)	467
28.1.5 File Form GSTR-9 with DSC/EVC	467
28.1.6 Filing DRC-03 on GST Common Portal	468
28.2 Introduction to Excel Based GSTR-9 Offline Tool	468
28.2.1 Steps to Prepare the Annual Returns using Ms Excel Offline Tool	469
28.2.2 Steps to Handle Error File	469
Chapter 29: Important Tips and Formats for Preparation of Annual Return
29.1 Some Common Checkpoints within GSTR-9	471
29.2 Important Formats	474
Chapter 30: Checklist for Annual Returns for Professionals	478
Chapter 31: Practical FAQ's in Filing of Annual Returns
31.1 FAQS on Basics in Annual Return	484
31.2 FAQS on Disclosure of Outward Supplies in Annual Return	487
31.3 FAQS on Outward Supplies	488
31.4 FAQS on Input Tax Credits	499
31.5 Other Miscellaneous FAQS	508
Chapter 32: Role of Client and Reviewer in GST Review & Self-Certification
32.1 Introduction	513
32.2 Role of the Client in GST Review	513
32.3 Role of Professionals in a Review Engagement	513
32.3.1 Role in GST Reviews - Scope of GST Reviewer's 513
Chapter 33: Clause by Clause Analysis of GSTR-9C
33.1 Introduction	515
33.2 Need for Reconciliation	515
33.3 Structure of Reconciliation Statement in Form GSTR-9C	516
33.4 Detailed Step by Step Understanding of Form GSTR-9C	518
33.4.1 Part I – Basic Details	518
33.4.2 Part II - Reconciliation of Turnover Declared in the Audited Annual Financial Statement with Turnover Declared in Annual Return (GSTR-9)	522
33.4.4 Part IV - Reconciliation of Net Input Tax Credit (ITC) Declared in Audited Annual Financial Statement with Net ITC Declared in Annual Return (GSTR-9)	598
33.4.5 Part V - Additional Liability due to non-Reconciliation	616
Chapter 34: Steps In Filing of GSTR-9C On GST Common Portal
34.1 Introduction	620
34.2 Filing of GSTR-9C on GST Portal	620
34.3 Procedure for Filing GSTR-9C	620
Chapter 35: Documentation and Work Papers in GST Review - Best Practices
35.1 Introduction	642
35.2 Purpose of Review Documentation	642
35.3 Form & Contents of Documentation	643
35.3.1 Permanent Review File	643
35.3.2 Current Review File	645
35.3.3 Specific Working Papers for GSTR-9C	648
35.4 Contents of Review Working Papers	652
35.5 Documentation in an A-I Environment	652
35.6 Ownership of Review Documentation	655
35.7 Points to be Noted for Effective Documentation	655
Chapter 36: Review Program and Checklist on GST Review for use by Professionals
36.1 Introduction	657
36.2 Sample Review Program	657
36.3 Checklist for Conducting GST Review	659
Chapter 37: Ethical Standards and Independence of Auditor
37.1 Introduction	667
37.2 Fundamental Principles	667
37.3 Identification and Evaluation of Various Threats	668
37.4 Conflict of Interest	669
37.5 Other Factors which could Pose Threat	670
37.6 Independence of the Auditor	671
37.7 Tax Services to GST Review Clients	672
37.8 Impact of Other Provisions	674
37.9 Ensuring Independence in an AI Environment	674
37.10 Important Case Studies on Professional Misconduct	676
Annexure 1 - FAQs On Ethical issue relating to GST - Announcement 15.11.20171	682
Appendices	684
Appendix 1: Annual Returns in Form GSTR-9 and GSTR-4	685
Appendix 2: Reconciliation Statement and Certification in Form 9C	706
Appendix 3: Abstract of Provisions of Annual Return under Goods and Services Tax Act, 2017	719
Appendix 4: Procedure of Audit in GST Rules, 2017	720
Appendix 5: Accounting Entries of GST	721
Appendix 6: Audit Report under the Companies (Auditor's Report) Order, 2016 in relation to Indirect Taxes	727
Appendix 7: Engagement and Quality Control Standards of ICAI	728
Appendix 8: List of Important Publications of the Institute of Chartered Accountants of India, ICAI, New Delhi	729
Appendix 9: Statutory Provisions in Customs Law Relating to Customs Audit	731
Bibliography/Webliography/References 735