Post GST: Year-end precautions and compliances
This march ending is going to be very crucial because of changeover from old taxation system to GST regime. Apart from the normal year end practice few additional things will have to be kept in mind while filing the last returns and closing books of accounts.
Refund of deposit: As all VAT registered assessees have migrated to GST, ensure that you claim the refund of security deposit of Rs 25,000 paid at the time of taking voluntary registration under Maharashtra Value Added Tax.
Books of accounts: The books of accounts should be finalised for two different periods i.e April 1, 2017 to June 30, 2017 as per the VAT regime and July 1, 2017 to March 31, 2018 as per the GST regime.
Transitional credit:
a) Department is going to scrutinise all the cases of transitional credits of old taxes taken while migrating to GST regime. The assessee who has claimed
transitional credit should keep ready following documents and records:
Copy of six months returns (January 17-June 17), Copy of Trans 1, Certified Copy of invoices with duty paid bills, Certified Copy of Stock Summary.
b) Ensure that the stock as per Trans 1 is in accordance with the finalised books of accounts i.e stock as on June 30, 2017.
c) Check and file Trans 2 before March 31, 2018 for claiming credit against sale of stock for which tax/duty paid documents are not available.
Verification of purchases/input tax credit: Though GSTR 2 has been suspended for time being still we can see form GSTR 2A on the GST site i.e monthly purchase from registered dealer. Verify the same with purchase record and take necessary steps to reconcile with books.
Reconcilliation: Reconcile sales/ purchases, GST liability with the GSTR 3B returns. If there are any differences give the effect of same in GSTR 3B of March 2018. Reconcile the cash ledger, credit ledger and liability ledger with books of accounts. All the entries should be done before the year end. Also debit note, credit note, rate difference, discount, etc., also have to be accounted for and effect of the same has to be given in returns.
SME funding: As the SME funding will be linked to GST returns hence ensure that the turnover of exempted and non GST supplies are also properly reflected in GSTR 3B. Turnover as per books should match with the GST returns.
Reversal of input tax credit: As per the rules of input tax credit, after issuance of tax invoice if receiver does not make the full payment within 180 days then the credit taken on that invoice is to be reversed. And whenever the payment is made, the receiver can take the credit of the amount. Therefore, the aging analysis of the debtors and creditors should be done. All old invoices issued before 1 October, 2017, should be paid before March 31, 2018.
Suppose the fees Rs 15,000 is payable to an architect on September 15, 2017, and the credit on that of Rs 1,800 has been taken in the return of that month, then the fees should be paid before March 31, 2018. Otherwise the extra payment of Rs 1,800 is to be made in the month of March.
HSN Code in the invoice: Before preparing first invoice in the new financial year, taxpayers should check the turnover for the year 2017-18.
Taxpayers whose turnover is above Rs 1.5 crore but below Rs 5 crore shall use 2-digit code and the taxpayers whose turnover is Rs 5 crore and above shall use 4-digit code. Taxpayers whose turnover is below Rs 1.5 crore are not required to mention HSN Code in their invoices.
New series for tax invoice: If anyone wants to change the series for billing in the New Year, then he can do that from April 1. New numbering should be started form April 1.
Composition Scheme: If any taxpayer wants to register under composition scheme then he can apply in Form GST CMP – 02 before March 31.
Similarly, those who wants to cancel the registration under Composition Scheme, they have to apply in Form GST CMP – 04 before April 7. They have to calculate the effects of ITC on closing stock.
Due dates of the returns: There are various due dates in the April month for filing returns relating to March 31. GSTR 3B for March is to be filed up to April 20. GSTR 1 is to be filed by May 10. GSTR 4 is to be filed by April 18.
Deciding monthly/quarterly frequency of returns in FY 18-19: Taxpayers should check the turnover for the year 2017-18. If the aggregate turnover is above Rs 1.5 crore then the taxpayers have to file monthly return in FY 2018-19. If the aggregate turnover is below Rs 1.5 crore then the taxpayers have an option to file the quarterly GST returns.
Refund: As in Maharashtra VAT, there was a provision of refund for excess Input Tax Credit, there is no such provision in GST law. Excess credit needs to be carried forward compulsorily.
Depreciation on the capital asset: If ITC has been claimed on purchase of fixed assets, then do not include the same in cost of asset for calculating depreciation.
Anti-profiteering: Compare the gross profit for the years 16-17 , 17-18 and for the period April 17 to June 17 and July 17 to March 18. If the gross profit ratio for the March 2018 is higher, then check whether you have passed on the credit to the customer or not.?
Cancellation of registration under GST: Those who have taken voluntary registrations but now do not want to continue because of lower turnover or closure of business can cancel their registration.
And last but not the least E Way Bill is going to be operational with effect from April 1. So no more fooling now, it will be compulsory to issue E Way Bill from April 1, 2018 for inter-state transport. In case of inter state supply, if the goods happens to be in transit as on April 1, 2018, it is compulsory to generate E Way Bill for them. So be prepared to generate E-Way Bill from April 1, 2018.
(The author of this article is CA Satish Sarda, practicing chartered accountant and Past Chairman of ICAI, Nagpur Branch)
Source : The Hitavada
Refund of deposit: As all VAT registered assessees have migrated to GST, ensure that you claim the refund of security deposit of Rs 25,000 paid at the time of taking voluntary registration under Maharashtra Value Added Tax.
Books of accounts: The books of accounts should be finalised for two different periods i.e April 1, 2017 to June 30, 2017 as per the VAT regime and July 1, 2017 to March 31, 2018 as per the GST regime.
Transitional credit:
a) Department is going to scrutinise all the cases of transitional credits of old taxes taken while migrating to GST regime. The assessee who has claimed
transitional credit should keep ready following documents and records:
Copy of six months returns (January 17-June 17), Copy of Trans 1, Certified Copy of invoices with duty paid bills, Certified Copy of Stock Summary.
b) Ensure that the stock as per Trans 1 is in accordance with the finalised books of accounts i.e stock as on June 30, 2017.
c) Check and file Trans 2 before March 31, 2018 for claiming credit against sale of stock for which tax/duty paid documents are not available.
Verification of purchases/input tax credit: Though GSTR 2 has been suspended for time being still we can see form GSTR 2A on the GST site i.e monthly purchase from registered dealer. Verify the same with purchase record and take necessary steps to reconcile with books.
Reconcilliation: Reconcile sales/ purchases, GST liability with the GSTR 3B returns. If there are any differences give the effect of same in GSTR 3B of March 2018. Reconcile the cash ledger, credit ledger and liability ledger with books of accounts. All the entries should be done before the year end. Also debit note, credit note, rate difference, discount, etc., also have to be accounted for and effect of the same has to be given in returns.
SME funding: As the SME funding will be linked to GST returns hence ensure that the turnover of exempted and non GST supplies are also properly reflected in GSTR 3B. Turnover as per books should match with the GST returns.
Reversal of input tax credit: As per the rules of input tax credit, after issuance of tax invoice if receiver does not make the full payment within 180 days then the credit taken on that invoice is to be reversed. And whenever the payment is made, the receiver can take the credit of the amount. Therefore, the aging analysis of the debtors and creditors should be done. All old invoices issued before 1 October, 2017, should be paid before March 31, 2018.
Suppose the fees Rs 15,000 is payable to an architect on September 15, 2017, and the credit on that of Rs 1,800 has been taken in the return of that month, then the fees should be paid before March 31, 2018. Otherwise the extra payment of Rs 1,800 is to be made in the month of March.
HSN Code in the invoice: Before preparing first invoice in the new financial year, taxpayers should check the turnover for the year 2017-18.
Taxpayers whose turnover is above Rs 1.5 crore but below Rs 5 crore shall use 2-digit code and the taxpayers whose turnover is Rs 5 crore and above shall use 4-digit code. Taxpayers whose turnover is below Rs 1.5 crore are not required to mention HSN Code in their invoices.
New series for tax invoice: If anyone wants to change the series for billing in the New Year, then he can do that from April 1. New numbering should be started form April 1.
Composition Scheme: If any taxpayer wants to register under composition scheme then he can apply in Form GST CMP – 02 before March 31.
Similarly, those who wants to cancel the registration under Composition Scheme, they have to apply in Form GST CMP – 04 before April 7. They have to calculate the effects of ITC on closing stock.
Due dates of the returns: There are various due dates in the April month for filing returns relating to March 31. GSTR 3B for March is to be filed up to April 20. GSTR 1 is to be filed by May 10. GSTR 4 is to be filed by April 18.
Deciding monthly/quarterly frequency of returns in FY 18-19: Taxpayers should check the turnover for the year 2017-18. If the aggregate turnover is above Rs 1.5 crore then the taxpayers have to file monthly return in FY 2018-19. If the aggregate turnover is below Rs 1.5 crore then the taxpayers have an option to file the quarterly GST returns.
Refund: As in Maharashtra VAT, there was a provision of refund for excess Input Tax Credit, there is no such provision in GST law. Excess credit needs to be carried forward compulsorily.
Depreciation on the capital asset: If ITC has been claimed on purchase of fixed assets, then do not include the same in cost of asset for calculating depreciation.
Anti-profiteering: Compare the gross profit for the years 16-17 , 17-18 and for the period April 17 to June 17 and July 17 to March 18. If the gross profit ratio for the March 2018 is higher, then check whether you have passed on the credit to the customer or not.?
Cancellation of registration under GST: Those who have taken voluntary registrations but now do not want to continue because of lower turnover or closure of business can cancel their registration.
And last but not the least E Way Bill is going to be operational with effect from April 1. So no more fooling now, it will be compulsory to issue E Way Bill from April 1, 2018 for inter-state transport. In case of inter state supply, if the goods happens to be in transit as on April 1, 2018, it is compulsory to generate E Way Bill for them. So be prepared to generate E-Way Bill from April 1, 2018.
(The author of this article is CA Satish Sarda, practicing chartered accountant and Past Chairman of ICAI, Nagpur Branch)
Source : The Hitavada
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