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GST annual return and audit related considerations

GST annual return and audit related considerations

GST

Mohit Mundhra

Mohit Mundhra

16 Mar 2019, 15:22 — 3 min read

Background:The due date for filing of annual returns for financial year 2017-18 in Form GSTR-9, GSTR-9A and GSTR-9C has been extended to 30 June 2019, according to a Finance Ministry press release. The government had earlier extended the last date for filing annual returns to 31 March 2019 from 31 December 2018. GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is the annual return form for composition taxpayers and GSTR-9C is a reconciliation statement. This extension will allow taxpayers more time to compile their annual returns and getting their GST audit conducted on time.

I would like to share a list of critical considerations for filing GST annual return and conducting annual audit -

 

1. Whether GST has been paid to government by the recipient of goods/ services purchased from unregistered dealers between 1 July, 2017 to 15 November, 2017 only if value is greater than INR 5,000 per day? This INR 5,000 is the cumulative total of purchases made in a day. If the same has not been paid then a detail scrutiny needs to be done day wise and those purchases needs to identified under various heads and GST needs to be paid on the same as per the rate relevant on that particular day/ month.

 

2. Whether GST has been paid to government on advances received against sale of goods during 1 July, 2017 to 15 November, 2017?

 

3. "Whether GST is paid on transport services?" An important aspect to consider is the impact of GST on transport services received which needs to be paid by the recipient of services under Reverse Charge Mechanism (RCM). Two things here are worth noting:

 

  • Firstly, if GST is paid @ 5% on value then no Income Tax Credit (ITC) will be available and if taken, the same needs to be reversed.
  • Secondly, if the recipient wants to take credit of GST paid under RCM then the recipient needs to pay GST @ 12%. Since many are not aware of the RCM provisions, it might be a possibility that GST has not been paid by them and the same should be paid before filing annual return through GST DRC-03 Form else the same will be reflected in the GST Audit Report (GSTR 9C) as an observation.

 

4. Additional places of business also needs a review while conducting GST Audit. There may be cases where a business house has multiple warehouses/ branches where the goods are kept or sales being made or services being provided and the same is yet to be reflected in the GST Portal.

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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.

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Mohit Mundhra

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