As we approach the year-end, it’s crucial to ensure that all GST compliances are in order. To facilitate a smooth year-end process,
The checklist summarizes various provisions under the GST law, addressing the dynamic nature of changes and amendments. Compliances are delineated on monthly, quarterly, half-yearly, and yearly basis. The emphasis lies on the financial year end 2023-24 and the commencement of the financial year 2024- 25, aiming to mitigate the risk of oversight.
E-Invoice
E-Invoicing is mandatory for taxpayers with an aggregate turnover exceeding 5 Crores. Starting from April 1, 2024, every entity surpassing this threshold at any point from the financial year 2017-18 onward must implement e-invoicing. It is important to note that e-invoices are only required for transactions with GST-registered individuals or for export transactions.
LUT for Exports / supply to SEZs
Annually, taxpayers must submit the Letter of Undertaking (LUT) on the GST portal before engaging in the export of goods/services or supplying to SEZ without payment of IGST. The option to file the LUT for the fiscal year 2024-25 is now available on the GST portal. Please be aware that LUTs executed for FY 2023-24 will expire on March 31, 2024. To ensure Continuous compliance, it is advisable to execute the LUT for FY 2024-25 on or before March 31, 2024. Once executed, the LUT will remain valid for a period of one year.
Opting for Composition Scheme
Regular taxpayers have the option to choose the Composition Scheme for the Financial Year 2024-25 by submitting their choice on or before March 31, 2024. Eligibility for opting into this scheme is granted to registered individuals, provided they are not engaged in the manufacturing of goods as specified by the Government.
Composition Scheme – Annual Return
GSTR-4 return for FY 2023-24 for composition scheme to be filed on or before 30.04.2024.
New Invoice Series for FY 2024-25
Rule 46(b) provides that with the start of new financial year 2024- 25 (w.e.f. 01/04/2024), a new series, unique for the financial year is to be started by the GST taxpayers. New series to be followed for all documents below
- Tax Invoice
- Credit notes
- Debit notes
- Bill of supply
- Receipt Voucher
- Refund Voucher
- Payment Voucher
- ISD Invoice
Note: Delivery Challan – Series of FY 2023-24 could be continued however it is suggested to have new series, unique for FY 2024-25
Payment to vendors within 180 days of invoice
In cases where payment to a vendor is not settled within 180 days from the invoice date, it is necessary to reverse the ITC. However, once the payment is completed, Input Tax Credit (ITC) can be reclaimed without any specified time limit.
ITC year end Re-calculation in case of Taxable and Exempt Supplies
ITC can be availed only on goods and services for business purposes. If they are used for non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed. So, ITC on inputs for exempted goods will also have to be removed.
Pending ITC
It is important to avail all your pending input tax credit for the year. It’s the financial year-end and it is time for you to complete the GST reconciliation of GSTR 2B with all your Purchase Invoices. This indeed is a significant step to collect all your pending ITC. Reconcile Credit Availed during the year available in 2B; Both Missing credit (vendor follow up) and Additional credits (Expenses Accounting).
Reconciliation of outward supplies
There are five places where our sales are captured; one is GSTR-1, the second is GSTR-3B, the third is accounting entries, the fourth is Financial Statements, and the fifth is E-Way bills. It is important that the details of all five places should be the same.
Variance in the value at any place may lead to the payment of interest or penalty or negative marking in GST audits.
Amendments /Rectification
It is good to amend and rectify any mistakes or omissions made in GSTR-1 or GSTR 3B returns for the previous financial year in the March 2023 returns. For the same, the taxpayer should reconcile their books of accounts (Ledgers) with the uploaded returns. And adjust the differences (if any) in form GSTR 3B. Also for any mistakes made in GSTR-1, for instance, uploading wrong GSTIN, submitting B2C invoices instead of B2B invoices, omitted invoices, etc. that should be amended, can be amended now.
Physical Stock Checking
To get prepared for income tax and GST departmental audit it is important that there should be no difference in physical stock with you and the entry of the same in the books. You should also have a look at ITC reversals while checking the physical stock. If any difference is found in both then do check if any sales are missed while in books.
Reversal of Blocked Credit
In certain situations, even if the basic conditions for claiming ITC are satisfied, ITC claims must be reversed. Reversal of ITC means the credit of inputs utilised earlier would now be added to the output tax liability, effectively nullifying the credit claimed earlier. Depending upon when such reversal is done, payment of interest may also be required.
Section 17(5) of CGST Act refers to a specific provision under GST covering blocked credits or ineligible ITC. The taxpayer cannot claim ITC while paying output tax when they make purchases listed in this provision.