GST Year-End Checklist 2023: 10 Tasks To Be Completed

As March approaches, the GST Year-End Checklist is a taxpayer’s most crucial document!

Taxpayers have various obligations to fulfill before April 1, 2023, and some mandates are effective as of that day. Similarly, some things have historically been implemented on April 1st, the beginning of the fiscal year, while others must be done annually. And just like every year, we’ve provided you with a GST Year-End Checklist of all the tasks you must accomplish before the fiscal year closes.

As the financial year ends, businesses must complete their GST year-end compliances to avoid penalties or legal issues. Here is a 360° view of the key GST year-end compliances that businesses must complete:

Annual Return Filing:

Annual return filing typically refers to submitting a company’s financial information to the relevant government agencies for a particular year. In most countries, companies must file an annual return, which includes information on their financial performance and compliance with various regulations.

The process of annual return filing can vary depending on the country and the specific applicable regulations. Companies must gather financial data such as income statements, balance sheets, and cash flow statements. They may also need to provide information on their shareholders, directors, and other relevant parties.

Every registered taxpayer must file an annual return in Form GSTR-9 by 31st December of the subsequent financial year. This return contains details of all the outward and inward supplies made during the year.

Reconciliation of Books with GST Returns:

Reconciliation of books with GST returns refers to verifying and ensuring that the information recorded in a company’s financial books matches the data reported in its GST returns. This is essential because it helps identify discrepancies or errors in the company’s accounting records and ensure compliance with the GST laws and regulations.

The reconciliation process involves comparing the company’s accounting software or financial statements data with the data reported in its GST returns. It is necessary to reconcile the books of accounts with the GST returns filed during the year, and this will help identify any discrepancies and take corrective measures.

Payment of Tax and Interest:

Payment of tax and interest refers to submitting the required tax amount to the relevant tax authority and any interest charges that may have accrued on the unpaid amount.

The due date for payment of any tax liability arising during the year is the 20th of the subsequent month. If any tax or interest remains unpaid, it must be paid before filing the annual return.

Input Tax Credit (ITC) Reconciliation:

Input Tax Credit (ITC) reconciliation reconciles the ITC claimed in the Goods and Services Tax (GST) returns filed by a taxpayer with the ITC available as per the books of accounts. In simple terms, it is a matching exercise to ensure that the ITC claimed by the taxpayer is correctly reflected in the GST returns filed. It is crucial to reconcile the ITC claimed during the year with the ITC available in the electronic credit ledger. Any mismatch must be corrected before filing the annual return.

Reversal of ITC:

ITC, or Input Tax Credit, is a mechanism in the Goods and Services Tax (GST) system that allows businesses to claim a credit for the taxes paid on their purchases, which they can then use to offset the taxes they owe on their sales. The reversal of ITC means the reversal or cancellation of this credit.

Any ITC claimed but not eligible or utilized during the year must be reversed in the electronic credit ledger before filing the annual return.

GST Audit:

Businesses with an annual turnover exceeding Rs. 2 crores must get their accounts audited by a chartered accountant or a cost accountant and file a reconciliation statement in Form GSTR-9C.

Other Compliance Requirements:

There may be other compliance requirements based on the nature of the business, such as filing of Form GSTR-10 for cancellation of registration, filing of Form GSTR-11 for inward supplies received by a person who is not liable to pay tax, etc.

In conclusion, businesses must complete all their GST year-end compliances on time to avoid legal issues or penalties. It is advisable to seek the help of a professional to ensure compliance with all the relevant laws and regulations.

Ten tasks that you may need to complete for GST year-end:

Top of Form

GST regulations can vary depending on your jurisdiction, so you must check with your local tax authority for specific requirements. Here are ten tasks that you may need to complete for GST year-end:

Verify GST registration: Ensure that you are registered for GST and that your registration details are up to date.
Check GST returns: Review all GST returns filed during the year and ensure that all the details are accurate.
Review input tax credit (ITC): Verify that all eligible ITCs have been claimed in your GST returns.
Reconcile books of accounts: Reconcile your books of accounts with GST returns filed during the year.
Update GST software: Ensure that your GST software is updated with the latest version and all necessary updates.
File outstanding returns: File any outstanding GST returns from previous periods.
Check for errors: Review all GST returns filed during the year and check for any errors or discrepancies.
Pay GST liability: Pay any GST liability due for the year.
File annual return: File your annual GST return for the year, which includes a summary of all GST transactions.
Maintain records: Maintain records of all GST-related transactions, including invoices, receipts, and other relevant documents.

Forms for B/W Reconciliations of GST

Possible changes to the GST returns can be identified by comparing the data of outbound supplies in books with the GST returns (books, GSTR-1, and GSTR-3B). This distinction should also take turnover and taxes into account. The differences can be found by settling the discrepancies between the recorded rates in books and the reported rates in GSTR-1, counting tax ledgers, and 3B for the reverse charge method (RCM).

Comparing the credit balance and cash in the GST site and the balance listed in the books can reveal some other inconsistencies, such as monthly entry errors, missed or excess claimed ITC (input tax credit), etc.

Ensure to generate any GST debit or credit notes needed for any applicable shortfalls or excesses in value or sales returns from customers. The deadline for credit notes is October 31, and the agreement’s sections regarding discounts and requirements for issuing credit notes are more crucial.

Ensure that Section 18(6) is followed when transferring or selling plant and machinery. It’s also essential to consider the valuation check for related-party transactions. Compare how tax entries are used in the accounting books to the computerized liability ledger. Examine the debtor’s aging report to assess the client’s tax recommendations. For instance, customers’ input tax credits (ITC) might not be reimbursable. Check for MSME non-compliance as well.

But you don’t have to worry about it, as ourtaxpartner.com is here for you to guide you in this process. Visit us to get detailed information related to GST and ITR Filing.