With the end of the financial year 2023-24, businesses must take the following steps to ensure compliance and streamline processes for filing GST returns for month of March 2024.
GST Reconcilation
- Form GSTR 1 & GSTR 3B: Reconciliation of outward supplies
As a result of reconciliation between GSTR-1 and GSTR-3B, if any amendment to be executed in any of the outward invoices which have been already reported in GSTR-1 of FY 2023-24, such amendment should be reported in GSTR-1 of March 2024.
In this regard, we suggest sending an e-mail to the clients requesting them to check and inform regarding any amendment required by them in relation to the invoices/credit notes issued during the year.
- ITC/Cash balance
The amount of input tax credit and Cash balance as per books of accounts should be reconciled with electronic cash ledger and electronic credit ledger as per GST portal.
Ideally the balances should be matched with no difference/reconciling items. Necessary corrections may be taken up in the books of accounts or GST return for the month of March 2024.
- Revenue Reconciliation:
Revenue as per the books of accounts should be reconciled with the turnover reported in GST returns filed by the entity during the year.
Any difference should be addressed with correction in GST returns or books of accounts. A reconciliation file should be prepared to avoid any surprise during the course of statutory audit or GST annual return filing.
- Reconcile the input tax credit register with GSTR 2B:
The amount of ITC reported in GSTR 3B and booked in books of accounts of shall be reconciled with the auto populated input tax credit.
- If the input tax credit in GSTR 2B is more than GSTR 3B, then it reflects the position where expenses are incurred by the Entity but not yet booked in the books of accounts. It is important for closure of books in efficient manner.
- Where the ITC is claimed in GSTR 3B or the invoices are booked in the books of accounts but the ITC is not appearing in GSTR 2B, then it is advisable to followup with the vendors for correct reporting of invoices in their GSTR 1 so that the ITC can be appeared in GSTR 2B.
Other Important points to be considered.
- Letter of Undertaking (LUT):
Incase you are an exporter or supplier of good/services to SEZ unit/authority and opt for supplying the goods/services without payment of IGST under the provisions of Section 16 of IGST Act, then you should file an application for obtaining LUT on GST portal.
It is advisable to opt for LUT which shall be filed before 31 March 2024 for the FY 2024-25 on GST portal.
- Reversal/Reclaim of input tax credit as per Rule 42 /43:
A registered person, supplying goods or services which are exempt under GST provisions, shall be required to reverse the input tax credit as per the provisions of S. 17 of CGST Act read with Rule 42/43.
The ITC reversal/reclaim on account of above should be reported in GSTR 3B of March 2024 appropriately. If such reversal is reported in subsequent month, then the interest shall be levied under the provisions of S. 50 of CGST Act.
- Discharge the RCM liability and claim the corresponding ITC for the FY 2023-24:
We suggest to analyze the expenses incurred during the year and wherever it is applicable, the RCM liability should be reported in GSTR 3B and the eligible ITC should be claimed in GSTR 3B for the month of March 2024, if missed earlier.
Please be informed that the time of supply incase of inward supplies subject to RCM, shall be 60 days from the date of invoice or date of payment, whichever is earlier. However, incase of related persons, the date of amount credited or date of payment, whichever is earlier, shall be the time of supply.
- Non-payment of consideration by recipient within 180 days from the date of invoice:
According to proviso of Section 16(2), the recipient of goods or services is required to make payment to supplier within 180 days from the date of issue of invoice.
If any ITC is claimed on invoice which is outstanding for more than 180 days, then the ITC should be reversed in GSTR 3B and the same shall be re-claimed on payment to the supplier.
Kindly analyze the creditors ageing and take appropriate actions.
- Optin for Composition scheme by filing CMP-02 on or before 31st March 2024:
If you are a regular taxpayer and eligible to opt for composition scheme, then you may file an intimation under Form CMP-02 on or before 31 March 2024 to opt for composition scheme for the next financial year.
- Start new series of documents (like Tax invoice, Credit notes, Debit notes, etc.) from 01 April 2024
Apart from above points, one important point is the payment to Suppliers having UDYAM registered as Micro and Small Entities (Non-GST but IMPORTANT aspect)
- Categorize your creditors into MSME (Micro and Small) and Non-MSME.
- Prepare an ageing of creditors and identify the invoices which are outstanding for Micro and Small entities with UDYAM registration.
- Locate the invoices which are outstanding beyond the due date of payment and the due date is on or before 31 March 2024, make the payment for such invoices before 31 March 2024,
- Locate the invoices which are outstanding after 31 March 2024 but booked in FY 2023-24, then make sure the payment is done before such due date or before 31 March 2024.
