Year ending Tasks for GST for the financial year 2020-21
1. New Invoice Series:
Ensure the creation of a set of new/unique invoices to be raised from 01 April 2021. The set should contain serial numbers. You can create multiple layers according to your convenience.
2. Physical Stock Check:
The physical stock needs to be reconciled with the stock according to books of account. This would be useful for income tax and GST audit. In case of any discrepancies, the possibility of reversing CIT or lost sales data may be checked.
3. HSN code requirements:
With effect from 1 April 2021 the HSN Code requirement is as follows:
1. Turnover up to 5 apertures – Min 4 digits per B2B supply. (Optional for B2C supplies)
2. Above 5 apertures 6 digit turnover
3. For exporters with few notifiable goods – 8 digits
4. Reversing Blocked Credit:
Section 17 (5) of the CGST Act 2017 requires the reversal of credit for lost, stolen, destroyed, written off etc. goods. The companies are likely to decide to write off any inventory, if any during the year-end that closes by March 31, 2021. In such cases, CIT attributable to such goods will be reversed.
5. Letter of Undertaking
The LUT must be in place for the forthcoming financial year 2021-22 before 1 April 2021 so that exports are not stuck at the last minute.
6. Repayment for the financial year 2018-19
The last date to apply for a GST refund related to FY 2018-19 is 31.03.2021. Ensure timely compliance, if applicable.
7. E-Invoicing:
Businesses with a turnover above Rs.50 are required to generate e-invoicing Businesses should be prepared in advance to avoid problems as soon as the e-invoicing is implemented.
8. QR coding
A QR code on B2C supplies from firms with a turnover in excess of 500 apertures must be printed from 1 April 2021. Failure to do so from 1 April 2021 will result in a penalty on all B2C supplies from 1 December 2020.
9. ITC restricted by 36 (4):
Ensure that credit is used in accordance with 36 (4) of the CGST Rule 2017, although you may have received goods or services together with an Invoice copy the 95% restricted credit, depending on the number of Invoices uploaded in the portal.
Eg. Your 100% credit is only eligible when the supplier has uploaded your invoice to 95% in the threshold for the given month. From 09 October 2019 to 31 December 2019, the rule was to take advantage of 20%. From 1 January 2020 to 31 January 2020, the rule is to avail 10%. For the consecutive months of February, March, April, May, June, July, August 2020, the cumulative impact of the 10% rule in the September 2020 Gst 3B return needs to be adjusted as part of Covid’s 19 relief measures.
Since the new return date was extended to September 2013, restricted credit is applicable until a new return is due. The same has been revised up to the use of 5% of the eligible credit available in GSTR 2A wef 1 January 2021.
Maintain a monthly reconciliation between the Portal Vs Purchase Ledger to provide this information during a departmental audit or Tax department inquiry
GSTN advisory on Opting-in for Composition Scheme for the Financial year 2021-22
10. Solve GSTR 1 with GSTR 3B
Outgoing supplies in accordance with GSTR 3B must be reconciled with GSTR 1; where 3B turnover is less, identify it and pay tax with interest @ 18% as soon as possible. Where 3B turnover is greater, identify with the bills of sale/invoices and if additional tax is paid, the same will be noted for future changes or subsequent repayments where an adjustment is not possible.
11. Reconcile GSTR 3B with ITC on purchases
For an ITC built-in 3B more than the actual purchase invoices, the same needs to be reversed. where 3B is less than the eligible purchase invoices, the same must be claimed immediately but no later than the due date of GSTR 3B of September of the next Financial Year.
12. GSTR 3B / GSTR 1 entry VS Accounting entries
Many times the accounts staff make corrections to the above solutions in GST returns but the same is not reflected in the accounting entries. The book-entry needs to be done simultaneously with GST corrections to present a flat picture.
13. Reconcile E Way Bills with GSTR 1 and further with GSTR 3B
Sometimes EWB sales exceed GSTR 1 sales. This must be checked with sales invoices and tax must be paid if necessary and similarly, if EWB sales are less than GSTR 1 sales, this needs to be resolved. There may be cases where there is no need to generate E route bills and the bills of sale have been issued. The above needs to be done first to reconcile our books with GSTR returns
Secondly, it would be useful when doing financial audits and GST Audits and an annual return
Third, the same would be substantive evidence ready, in case the notifications from the authorities about a mismatch in the sale of EWB vs. GSTR 1 or 3B.
14. Reconciliation of GSTR 1 / 3B Sales to Financial Statements:
This is an important step given that the above steps have been taken and would come in very handy with Income Tax and GST Annual Returns.
15. Resolve CIT ledger solution:
It is advisable to reconcile the GSTR-1 & 3B, cash ledger and credit ledger in accordance with the GSTN threshold with the books of account. Tax Credit, cash ledger must be matched to the respective ledgers according to books of account.
16. Reconcile GSTR 2A with purchase invoices
All GSTR 2A for F.Y. 2020-21 and record all GST inputs excluding CIT ineligible claims. If any of the input is not mentioned in GSTR 2A, then the accounts team is required to follow up with the vendors and inform management so that it can be corrected immediately.
17. B2B, B2C Reconciliation
B2B and B2C sales must be reconciled with GSTR 3B / 1 with the books of account. This must be done to get a fairer picture and to avoid a future event where B2B sales will be incorrectly shown as B2C sales and the receiver will not be able to get the credit according to its 2A and the tax and interest liability on it. request.
18. Cross-checking of income on which zero or partial GST is paid
In the event that GST is not paid or not paid on income at lower rates, take corrective action. And for export supplies, make sure you have the correct LUT for the financial year in question.
