Things To Do Under GST For Year End and New Financial Year

As the fiscal year draws to a close and a new one commences, businesses must prioritize various GST-related tasks to ensure regulatory compliance and operational efficiency. From registration updates to invoice management and return filing, these actions are crucial for seamless business operations. Let’s delve into the essential tasks to be undertaken under GST for year-end and the new financial year to uphold compliance standards and optimize business processes.

A. GST Composition Scheme

1. Online Opt-in for Composition Scheme: Eligible taxpayers seeking enrollment in the GST Composition Scheme can do so by filing Form CMP-02 on the common portal before March 31st of the financial year.
2. Review and Amend GST Registration: Ensure all new business locations are incorporated into the GST Registration Certificate promptly, or any closed business places are removed from the certificate.

B. Invoice Management

1. Unique Invoice Series: Implement a new unique series or serial number for invoices issued in the new financial year to avoid duplication from the previous year. Maintain separate series for different state registrations.
2. Ensure Invoice Compliance: Verify that all invoices adhere to GST laws, including mandatory information such as GSTIN of the recipient and supplier, addresses, place of supply, GST amount breakdown, and invoice number limitations.
3. HSN Code Inclusion: Incorporate 4-digit HSN codes for invoices if the aggregate turnover in the preceding year is up to Rs. 5 crores, or 6-digit codes if the turnover exceeds Rs. 5 crores. E-invoicing applies to businesses with turnovers exceeding Rs. 5 crores, necessitating 6-digit HSN codes.
4. Documentation for RCM Supplies: Generate self-invoices for supplies received from unregistered persons to avoid potential questioning of Input Tax Credit (ITC) during audits. Issue payment vouchers for all payments made to such vendors.

C. GST Returns and Accounting

1. Reconciliation of Sales and Tax: Conduct a thorough reconciliation of sales turnover, credit notes, and output tax in Books of Accounts with filed GST Returns (GSTR-1 & GSTR-3B) for the previous year.
2. Rectify Discrepancies: Address any disparities between filed GSTR-1 & GSTR-3B returns, ensuring understanding of reasons behind differences for potential audits.
3. ITC Reconciliation: Match ITC claimed in Books of Accounts with that claimed in GSTR-3B, referencing GSTR-2B downloaded from the GST portal.
4. Supplier Confirmation: Obtain confirmations from suppliers regarding their GST return filings to safeguard ITC claims and maintain correspondence records for assessments or audits.
5. Review and Rectify ITC: Identify and reverse any erroneously claimed ineligible or blocked ITC in GST returns.
6. Address Reverse Charge Liabilities: Ensure proper reporting and payment of reverse charge liabilities, reconciling them with GST returns.
7. Payment Review and Compliance: Review payments to vendors within 180 days from invoice date to avoid ITC reversal, rectifying any delays promptly.
8. Miscellaneous Tax Liabilities: Ensure GST payment on other taxable incomes and asset sales, settling any pending liabilities with appropriate interest.

D. Other Considerations

1. LUT Renewal: Apply for renewal of the Letter of Undertaking (LUT) for exporters intending to export goods or services without IGST payment for the next financial year (2023-24).
2. Timely Refund Applications: File GST refund applications within the specified 2-year timeframe.
3. ITC-04 Filing: File ITC-04 on a half-yearly or yearly basis, depending on turnover thresholds.
4. QRMP Scheme: Opt-in or Opt-out of the Quarterly Return Monthly Payment (QRMP) Scheme for the first quarter of 2024-25 by April 30, 2024.
5. Compliance Check: Ensure compliance with GST laws regarding maintenance of accounts, documents, and records.

Conclusion Adhering to GST regulations is imperative for businesses in maintaining operational efficiency and regulatory adherence. By diligently addressing the outlined tasks for year-end and the new financial year, businesses can mitigate risks, optimize processes, and foster long-term success. From registration updates to invoice compliance and return reconciliations, each task contributes significantly to regulatory compliance and business resilience. Staying proactive and informed in GST matters enables businesses to navigate tax complexities effectively and focus on core operations with confidence.

Disclaimer The information provided herein serves a general purpose and may not be tailored to individual circumstances. While efforts are made for accuracy, no guarantees are made regarding completeness or sufficiency of information. Recipients are advised to verify information independently and seek professional advice. The Firm assumes no liability for any loss or damage resulting from reliance on this information. Indian law governs this content, and recipients submit to Indian courts’ exclusive jurisdiction for related claims.