September 2018 is going to be too important for every registered persons under GST as there are multiple compliances under the GST law.

Some of the issues which needs to be noted for compliances (as future rectification / correction with regard to the same may not be possible) are summarised as under:

1. Availment of Input Tax Credit for the last year: 

As per section 16 (4) of the CGST Act, the input tax credits on any inward supply of goods or services for the financial year 2017-18 may be taken on or before the due date of filing of the Return for the month of September, 2018. As the due date of filing of GSTR-3B for the month of September is 20thOctober, 2018, there is urgent need for every business to evaluate if any credits have been missed out from availment till date. If yes, the same has to be availed before due date so that there is no loss of credit to the company. Following could be action plan w.r.t. to ITC of last year:

• Reconciliation with GSTR-2A with the Input Tax Credits availed in the GSTR-3B
• Reconciliation of GSTR-2A with the ITC as per books of account
• Review and validation of all expenses and capital assets ledgers to ensure that all eligible credits have been availed
• Review the input tax credit register maintained by the company with the credits figures reported in the periodical GSTR-3B
• Review of all credits which have not been availed by the company considering in the nature of ineligible credits to re-examine if any of those are eligible and hence could be availed
• Review of ITC register to ensure that no ineligible credits have been taken
• In case of doubtful credits, evaluate the option of availment of credits and its subsequent reversal under protest so that the ITC does not become time bar due to delay in availment
• Review of transactions of the last year liable under reverse charge mechanism {both under section 9 (3) and 9 (4) of the Act} and availment of credits thereon
• Review of final computation of Input Tax Credits under Rule 42 and Rule 43 based on annual turnover so that the differential credits, if any, can be availed before filing of September month Return

2. Reporting of all invoices including amendments therein pertaining to last year in GSTR-1:

Proviso to section 37 (3) of the CGST Act,2017 provides that no error or omission in respect of the details furnished in GSTR-1 shall be allowed after furnishing of return for the month of September following the end of FY or filing of Annual Return, whichever is earlier. Following course of actions to be taken:

• Action point by the suppliers – in respect of inward supply made by the company
• Action point by the company in respect of outward supply made by it
• Ask supplier to raise invoice for the last year pending transaction, if any
• Raise invoice for the last year pending transaction, if any
• Ask vendor to upload the invoice in GSTR-1 if it has not been reported yet
• Upload the invoice in GSTR-1 if it has not been reported yet
• If there is any defect in the invoice, ask vendor to rectify the same and submit the revised copy of invoice
• If there is any defect in the invoice, rectify the same and submit the revised copy of invoice to the customer
• If invoice has been wrongly reported in the GSTR-1, ask for necessary amendment therein
• If invoice has been wrongly reported in the GSTR-1, carry out necessary amendment therein
• Reconcile the account balance with all the vendors to ensure that correct reporting has been made by them
• Initiate communication with customers if they have observed any deficiencies/defects in the invoice issued by the company or non reporting/wrong reporting thereof in the Return for necessary corrective actions
• Reconcile the account balance with all the customers to ensure that there are no differences which may creep up at later point of time
• Ask customer to reconcile their GSTR-2A for intimating the identified deficiencies, if any.

3. Issuance of Credit note in respect of all supplies made in the last year:

Section 34 (2) of the CGST Act,2017 provides that credit note in respect of the supplies made in the previous FY shall be declared in the Return for the month of September of next FY. Hence, credit notes in respect of transactions of last year may be issued only till the end of this month. No tax adjustment would be allowed for any credit note issued after the end of September. The action plan with respect of the issuance of credit note pertaining to the last year could be devised in the similar manner as discussed above for raising of invoice for the last year.

4. Issuance of Debit note in respect of supplies made in the last year: Similar to credit note, the supplier may issue debit note for the transactions pertaining to the last year only till the end of September for the recipient to avail the ITC on such debit note. If the debit note is issued after September, the buyer shall not be allowed to take input tax credits of the same. The action plan for debit note could be as below:

• Ensure to receive all debit notes u/s 34 of the CGST Act,2017 for any rate increase for supplies pertaining to FY17-18 (Eg. Supplementary invoice to OEM’s sector)
• Ensure to get all debit notes uploaded in GSTR-1 of vendor
• Ensure debit notes are accounted for and credit is taken in GSTR-3B – any Debit Notes if raised by vendor with respect to FY1718 and ITC of which is not taken in GSTR-3B before 20th October’18 will be lapsed

5. Computation of annual reversal required under Rule 42:

Rule 42 of the CGST Rules, 2017 provides that reversal of input tax credit (common credits) 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. Hence, the registered person engaged in making taxable as well as exempted supply are required to work out the reversal requirement for the FY 2017-18 on or before the end of due date of filing of Return of the month of September and avail/reversal the differential input tax credits based on the finalized annual aggregate turnover.

6. Requirement as per the Annual Return:

There is a requirement under GST law to furnish Annual return by every registered person other than ISD, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person every financial year electronically. The format is notified by Government in Notification No. 39/2018 – Central Tax dated:4th September 2018. The due date for filling of Annual Return is 31st December 2018. However, the format of Annual Return is designed in such a way that it requires data to be reported from the periodic returns filed.

The last date of any rectification in GSTR-1 or GSTR-3B pertaining to FY17-18 is 20th October 2018. Therefore it is required to get all GSTR-1, GSTR-3B, GSTR-2A reconciliations and if required make changes to it in the subsequent return before 20th October’18, so that correct data can be flown in GSTR-9.

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