As September is the final & last chance to comply with different GST Regulations & rules there under the Goods and Services Tax Act in respect to FY 2020-21, vigilance or so caution should be exercised in relation to inward and outward supply before submitting GST Return for the month of September 2021 on the following Seven Key Aspects.
A. Related to the Input Tax Credit (ITC)
- Availment of Input Tax Credit for Financial Year 2020-21: According to Section 16(4), a GST Registered person shall not be entitled to take Input Tax Credit in respect of any invoice or debit note for the supply of services or goods or both just after deadline of furnishing the return under Section 39 for the month of September following the end of the financial year to which such invoice or debit note pertains or furnishing a return under Section 39 for the month of September following the end of the financial year to which such invoice or debit note pertains or furnishing As a result, if the taxpayer has not claimed any Input Tax Credit in respect to any invoice/debit note related to F.Y 2020-21, the same should be claimed in the month of September-2021.
- Reconciliation of Input Tax Credit appearing in GSTR-2A/ 2B with Inward Register: Input tax credit appearing in GSTR-2A/2B but not scheduled in purchase register should be identified and reconciled accordingly, or if the input tax credit has been allotted in books of accounts but not taken into account in GSTR-2A/2B should be reconciled and follow up with the supplier so that it is reflected in GSTR-2A/2B should be undertaken. In addition, the taxpayer must verify that the restrictions established in 36(4) for claiming ITC are met.
- Apportionment of Input Tax Credit in accordance with Rules 42 & 43 : If the taxpayer engages in both exempt and taxable supply, the input tax credit obtained must be reversed in a proportion of exempt supply to total turnover in accordance with Rules 42 & 43 when submitting GSTR-3B. Such reversal shall be computed definitively for the fiscal year prior to the due date for filing the return for the month of September after the end of the fiscal year to which such credit pertains. However, if the reversal in GSTR-3B is too short or too large, it must be reversed/claimed.
- Reversal of ITC under Rule 37 (Non-payment of Consideration within 180 days): A registered person who has claimed an input tax credit on inbound supply but fails to pay the supplier thereof, the amount of value not paid and the amount of input tax credit claimed proportionate to such amount not paid to the supplier must be reversed within 180 days of the invoice's issuance. As a result, the taxpayer must check to see if payment has been paid to the supplier for all purchases made up to March 31, 2021.
B. Outward Supply Related
- Reconciliation of Outward Supply according to books of Accounts and GSTR-3B submitted for Fiscal Year 2020-21: The taxpayer should reconcile the outward supply as per books of accounts and file GSTR-3B so that any modification/rectification can be done until September-2021, i.e. if any sales have been not reported, underreported, or misreported, as the case may be, the same shall be reported in the return for the month of September-21.
- Amendment in GSTR-1: If there are any changes to be made in connection to outward supply, they can be made in Sept-21. For example, if a B2B supply was recorded as a B2C supply, it can be corrected in the Sept-21 return.
- Issuance of Credit Notes: According to Section 34(2) of the Central Goods and Services Tax Act, credit notes for invoices issued in fiscal year 2020-21 cannot be issued after submitting the report for the month of September 2021. As a result, any credit note for fiscal year 2020-21 should be issued by September 2021.