GST AUDIT CIRCULAR GST SPECIAL PROCEDURES TO BE FOLLOWED
Below are some of the key points that every taxpayer must keep in account:
1. Reconcile your GST Input Tax Credit Claimed with Online GSTR-2A. If the credit claimed does not match with credit available online. GSTR-2A online credit can be viewed now.
Excess: There may be some purchases and expenses which you have not accounted or ITC Claimed. Account and claim ITC.
Shortage : Your supplier may not have paid GST and not filed GST Return. Ask him to pay and file the Return. Even if your supplier filed the return, he may not have correctly quoted your GST No. Ask him to correct it in the subsequent months’ return Before September 2018, by way of Debit Note in your name by referring the old invoice Number.
What happens if not done: IF online credit is not available, then you have to pay the ITC as tax along with 24% interest p.a.
2. Similarly, while filing GSTR-1, we may also have wrongly quoted some of our customers GSTIN. Correct it before September 2018 by Submitting online Debit note.
3. Any mistake if rectified before 30.09.2018 that will attract only 18% Interest. You can take ITC also. Any mistake, if made after 30.09.2018, will attract 24% interest. No ITC Available.
4. Supplier Payment not made with 180 days: If payment to the supplier is not made within 180 days from the date of the bill, then ITC availed on it should be reversed in the monthly return when the 180 days expires (for July bill it is January return). With 18 % interest for 6 months. ITC can be again taken when payment to the supplier is made later.
5. Stock Held with Jobworker As on 330.06.2017:As per the GST Act, stock held with jobworker as on 30.06.2017 should have been declared in TRAN-1 Form. If Not declared, the subsequent receipt of goods from the jobworker will be treated as pa urchase from uan nregistered person and GST RCM has to be paid (upto 12.10.17). Now prepared a list of Goods and machinery held with jobworker as on 30.06.2017 (Details of jobworker and details of goods), with a covering letter submit to the Jurisdictional Assessing Officer (CTO) (by post). Goods held with jobworker as on 30.06.2017 should be received within 1 year from 01.07.17. Machinery held with jobworker as on 30.06.2017 should be received within 2 years from 01.07.2017. If received lately, that will be treated as a purchase.
6. Quarterly Return for Job work details is Compulsorily required to be filed : The Form is ITC-04. If this form is not filed, then the goods sent will be treated as ‘supply’ and GST has to be paid. If the goods from 01.07.17 is not received within 6 months, then that will be treated as ‘deemed supply’ and GST has to be paid. Similarly for Machinery sent. The time limit is 3 years.
7. Self Made Invoice for Reverse Charge Expenses. Every month consolidated self made invoice is required to prepared in the format for Reverse Charge Paid Expenses. Penalty leviable.
8. RCM on Import CIF. Vide Notification No.10/2017(IGST) 5% RCM is payable on Ocean Freight Paid on CIF purchase, for Import. 10% of CIF value is value of Ocean Freight. If we pay voluntarily before 30.09.18, then ITC available. If taxed later, No ITC. Interest 18%. Airfreight exempt.
9. Bank Charges : ITC on bank charges is available Only with Credit available Online and Bill Issued by Banker. If no bill issued by Banker then ITC cannot be taken. Get monthly bill from the bank. Inform your GSTIN to bank through a letter. Confirm online credit and monthly bill.
10. Tax Paid vs. Return Filed. Even If you paid the Tax. But if you have not filed the return. Then you will be required to paid 18% interest on the full tax till date of filing return.
11. ITC on Passenger Vehicle and Building Maintenance expenses : Since, ITC is not available on purchase of passenger vehicle and Building construction. (Should be reversed after 30.09.18 with 24% interest). ITC on repairs and maintenance of passenger vehicle and building maintenance is also doubtful. You can claim at your own risk.
12. Reverse ITC on Stock lost/ destroyed. When ever stock is lost, destroyed (fire accident), ITC availed on the purchase has to be reversed to that extent. Insure stock Cost + Tax value so that insurance can be claimed for full value .
13. Canteen and Other recoveries from employees Taxable. 01.07.17 to 17.02.18 12% GST with ITC. From 18.02.2018 5% GST without ITC. For other recoveries 18% GST. For free services without any recovery annual Rs. 5000 is exempted per employee. No ITC available.
14. From 01.10.18 Online Online Credit Only. The system will not allow us to feed the ITC based on the invoice in hand. So from now ensure that your suppliers properly pay GST and file return. Reconcile and Rectify every month. From doubtful suppliers, keep pending the GST value until online credit is available. GSTR-2A available.
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