Important gst points to be taken care of as you move to the new financial year 2024-25

For the benefits of our clients, we have reproduced below very important points to be taken care of for moving to the new financial year 2024-25.

1. Sales Reconciliation:

GSTR 3B Vs GSTR 1: Check the Differences in outward liability of GSTR3B and GSTR 1 from monthly return summary and take the corrective steps.

GSTR 3B VS BOOKS: Ensure that Total taxable supply as per GSTR 3B and Books is matching. Identify the differences and take the corrective steps.

UTILIZATION ENTRIES: Review of GST utilization entries passed in the Books Vs Electronic Liability ledger.

2. Letter of Undertaking(LUT):

Letter of Undertaking needs to be applied for the FY 2024-25, if you wish to make Zero Rate Supplies (i.e. Export of goods or services and Supplies to SEZ Unit / SEZ Developer) without payment of IGST on or before 31.03.2024.

LUT applied for Financial Year 2023-24 will be valid till 31-03-2023 and for the Financial Year 2024-25 application needs to be filed online for obtaining Letter of Undertaking.

3. E-Invoicing:

E-Invoicing is made applicable in a phased manner as follows:

In case you were not liable to generate e-invoice upto 31st March 2024, kindly check whether your aggregate turnover any preceding financial year from FY 2017-18 onwards has crossed the limit of 5 crores or not, if the same has crossed in any year, you would become liable to generate E- Invoice.

If such person fails to issue E-Invoice, apart from invoking of penal provisions their customer’s will not get credit. Thus, in case E-Invoice is applicable to you kindly ensure the same is complied with. On the other hand, if your Suppliers are liable to generate E-Invoice and they don’t comply you will not get credit for the same.

IRN FOR INVOICES OF FY 2023-24: Companies to whom E-invoice is already applicable, kindly check that IRN is generated for all invoices of FY 2023-24 with respect to:

• B2B Supplies
• Exports
• Supplies to SEZ

QR CODE: Taxpayer with aggregate turnover more than Rs. 500 crores in any of year from July 2017 till Mar 2023, is required to ensure that QR is issued on all invoice of B2C.

You can check status of enablement for a particular GSTIN for E-Invoicing at:

https://einvoice1.gst.gov.in/Others/EinvEnabled

4. HSN Code:

HSN code needs to be mentioned on all the documents issued (Tax Invoices, Delivery Challan etc.) in the following manner as per Notification No. 78/2020 – Central Tax dt. 15th October, 2020

Do make note that in case of supply of specified Chemicals 8 Digits HSN Code is mandatory as per Notification No.90/2020–Central Tax dt. 1st December 2020.

The electronic invoicing method for the Goods and Services Tax (GST) has been amended to make it mandatory for taxpayers with an Annual Aggregate Turnover (AATO) of Rs.5crores and overhead to include a minimum 6-digit Harmonized System of Nomenclature (HSN) code in their electronic invoices. This update will take effect starting from December 15, 2023.

We would further like to clarify that you may voluntarily mention HSN code with higher digits then what is applicable to you.

You must also ensure that the goods / services supplied by you are appropriately disclosed at the GST Portal with correct HSN classification.

5. ADVANCES IN CASE OF SERVICE SUPPLY:

GST PAYMENT ON ADVANCES: Check whether GST is paid at the time of Advance Received.

NO DOUBLE TAX: Ensure that no double tax is paid – that is, at the time of receipt of advance and at the time of raising of Invoice.

ADVANCE ADJUSTMENT: Invoices adjustment is correctly disclosed in GST Return.

6. AMENDMENT/CORRECTION IN GSTR 1:

Amendment or Correction in GSTR 1 of FY 2023-24 can be made till maximum 30th Nov 2024 (It means can be made till Oct 2024 return to be filed before 30th Nov 2024). Kindly ensure to make corrections/amendment (if any) within said due date.

It is recommended that said amendment / correction should be made till Mar 2024 return. This makes reconciliation easy in GSTR 9/9C and also easy to explain officer in notices/audit/enquiry. Auto Populated GSTR 1 Vs 3B comparison sheet is available in GST portal it can be used for this.

7. ITC Reversal on failure to pay within 180 days:

As per second proviso to subsection (2) of section 16 of the CGST Act 2017, tax Invoices for which the input tax credit has been availed by you in the previous months but the payment of such Tax Invoices have not been made to the supplier within 180 days from the date of Tax invoice, corresponding ITC claimed will have to be reversed in Form GSTR-3B and interest will have to be paid on such reversal. Therefore, the ageing analysis of the creditors (i.e., your supplier/vendor) is to be done. All invoices issued before 4th October, 2023, should be paid before 31st March 2024. Kindly make note that if the payments are not made within 180 days as stipulated above kindly ensure that such amounts are reversed in the current period GST Return and interest is duly paid. Do provide such details for incorporating the same in GST Returns.

8. GST Balance Reconciliation:

We recommend you reconcile the cash ledger, credit ledger and liability ledger as available on the GST portal with your Books of Accounts. The same will also help you in identifying differences and taking proper impact in subsequent period GST Return. Do make note that impact of FY 2023-24 can be taken upto 30th November 2024 (It means can be made till Oct 2024 return to be filed before 30th Nov 2024). The impact to be taken can be any of the following (including combination thereof):

1. Outward Liability pending to be discharged
2. Outward Liability pending to be reduced (eg. Credit Note)
3. RCM Liability pending to be discharged (consequential effect on ITC)
4. ITC pending to be claimed
5. ITC excess

9. Goods in Transit / Services yet to receive:

Kindly make note that ITC can be claimed only after you have RECEIVED BOTH goods / services as well as Invoices.

Example: Where supplier has issued Invoices in the month of March, 2023 but the underlying goods or services are received in April 2023, GST Credit cannot be claimed in GST Return for the month of March 2023. GST credit can be claimed in GST Return for the month of April2023.

10. New Series:

It is recommended that you start new series for Tax Invoice / Debit Note etc. from 1st April, 2024.

11. ITC Matching (3B Vs 2B):

It has now become mandatory that the details of inward supplies on which ITC is claimed are cross checked with the details of purchases which are

reflected on the portal in the Form GSTR 2B, as ITC that can be claimed gets restricted in terms of Rule 36(4) of the CGST Rules, 2017 which is applicable wef 09th October 2019. Further w.e.f. 01st January 2022 ITC is permissible for only amounts as reflected in Form GSTR-2B by virtue of section 16(2)(aa)of the CGST Act, 2017.

We strongly recommend that ITC claimed is cross checked with Form GSTR-2B and requisite follow up should be made with the erring suppliers in a timely manner.

12. Form GST ITC-04:

In case you are sending goods for Job work, Repair, Testing, Packing, Cutting etc. (either directly or indirectly), kindly ensure that Form GST ITC-04 needs to be filed as per the applicable periodicity. Delay in filing the same may attract penalty of upto Rs. 25,000/- can be levied for non-filing / delay in filing of each Form ITC-04.

Filing of Form ITC-04 for the period of Half Yearly- if preceding FY’s Annual Aggregate Turnover exceeds Rs. 5 Crores. The due date to furnish will be the 25th day of the succeeding month after the end of the half-year. i.e. 25th October and 25th April and filing of ITC -04 Yearly- if preceding FY’s Annual Aggregate Turnover does not exceed Rs. 5 Crores. The due date to furnish will be Annual Return on or before 25th April beginning with financial year.

13. Credit Reversal and ITC Reclaimed Statement:

Another new feature in GST Common Portal has been introduced by the GSTN in the form of “Credit Reversal and ITC Reclaimed Statement”. In order to facilitate the taxpayers in correct and accurate reporting of ITC reversal and reclaim thereof and to avoid clerical mistakes, a new ledger namely Electronic Credit and Re-claimed Statement was introduced on the GST portal. This statement was made available to help the taxpayers in

tracking their ITC that has been reversed in Table 4B(2) and thereafter re- claimed in Table 4D(1) and 4A(5).

14. ITC Reversal u/r. 42 and 43:

In case any goods or services or both (on which ITC is claimed) are used partly for making taxable outward supplies and partly for exempted outward supplies (including supplies made which are covered under RCM), proportionate ITC needs per Rule 42 and 43 of CGST Rules.to be reversed as per Rule 42 and 43 of CGST Rules.

The registered person shall be liable to pay interest on the said excess amount at the rate specified in sub-section (1) of section 50 for the period starting from the first day of April of the succeeding financial year till the date of payment.

15. GST on Capital Goods

Kindly ensure that the GST amounts should not be capitalized for cases where GST credit is claimed. Since as per section 16(3) of the CGST Act, 2017 if Depreciation is claimed on the GST component, input tax credit on the said GST component is not allowed.

16. GST Refund:

We strongly recommend that you take due care and apply for    all    eligible 
GST Refunds in a timely manner or else the same will lapse.

We would like to bring to your notice that there is a time limit to claim GST Refund, accordingly such claim needs to be claimed in a timely manner. The following are the situations wrt GST Refund:

A.NO SEPARATE application for GST Refund:

Export of Goods with payment of IGST:  In case you are exporting goods with payment of IGST, the process of granting of refund of IGST paid is automatic. As per Rule 96 of the CGST 

Rules,2017 “The shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India..” 

B.SEPARATE application for GST Refund:

(a) Refund of GST paid on Supplies made:

1. Supplies to SEZ unit with payment of
2. Deemed Export of

(b) Refund of Unutilised (i.e.,Accumulated) Input Tax Credit on account of:

1. Export of Goods / Services without payment of
2. Supplies to SEZ unit without payment of IGST. 
3. Inverted Tax Structure [Rate of GST on outward supplies is less than rate of GST on input]

This includes supplies made to Merchant Exporter by charging GST @ 0.1%.

(c) Refund of Cash Ledger

(d) Cases for excess payment of

17. Display of GST Registration Certificate:

Kindly ensure that you have displayed your GST Registration Certificate in a prominent location at your principal place and at every additional place or places of business.

18. Display of GSTIN:

Kindly ensure that you have displayed your Goods and Services Tax Identification Number (GSTIN) on the name board exhibited at the entry of your principal place of business and at every additional place or places of business.

19. Registering all your Place of Business:

Kindly ensure that all your Place of Businesses (including warehouse, godown or any other place where goods are stored and place where books are maintained) are incorporated /included in the GST Registration Certificate.

20. Debtors and Creditors Reconciliation:

Obtain ledger confirmations from your Debtors and Creditors as on 31st March 2024 and ensure that there is no difference in the balances. In case there are any differences kindly reconcile the same.

 21. Composition Scheme:

The composition scheme is an alternative method of levy of tax designed for small taxpayers whose turnover is below Rs. 1.5 crore (Rs.75 lakhs in case of few States). The objective of Composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers.

Opting in or opting out to Composition scheme for FY 2024-2025 to be made before March 2024 by filing Form GST CMP 03. [This is as per Rule 3(3) of CGST Rule 2017]

22. Quarterly Returns with Monthly Payment (QRMP Scheme):

QRMP Scheme is for eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on quarterly basis, while paying their tax dues on monthly basis through a challan.

In terms of Notification No.84/2020- Central Tax, dated 10.11.2020, a registered person who is required to furnish a return in FORM GSTR-3B, and who has an Aggregate Annual Turnover of up to Rs. 5 Cr in the preceding financial year is eligible for the QRMP Scheme.

Opting or opting out of QRMP scheme for Q1 of FY 2024-25 to be done within 30th April 2024 [ This is as per Rule 61A(1) of CGST Rule 2017 ]

23. Cross Charge (Deemed Supply)–Distinct Persons/Related Persons:

Kindly ensure Monthly Cross billing is done between distinct persons (Branch to HO, Branch to Branch and HO to Branch)/ related persons for common facilities, common staff, common Logo / trademark for GST purpose.

As per the provisions of the CGST Act, the tax will also be imposed on the supply of goods and services without consideration amongst distinct persons (i.e. Schedule I of CGST Act,2017). Where two business units have obtained different registrations under GST, they will be considered distinct entities/persons. Where there is a supply of goods and services that has taken place between two branches of the same business units (distinct persons) located in two separate states, it comes under purview of GST. 

24. Goods Transport Agency (GTA):

In case GTA is opting to pay GST under forward charge, then it needs to submit a Declaration and get acknowledgment from the GST Department on any time between 1st January and 31st March of the Preceding Financial Year. Provided that for the financial year 2024-25 the declaration shall be made on or before 31st March, 2024.

Therefore, it is to be noted that Goods Transport Agencies (GTAs) would no longer be required to file a yearly declaration for GST under forward charge. GTAs exercising the said option (i.e. GST under forward charge) for a specific financial year will be deemed to have chosen it for subsequent years unless they decide to revert to the reverse charge mechanism (RCM). 

25.  Accounts and Records:

You are required to keep and maintain a true and correct account of production or manufacture of goods, inward and outward supply of goods or services or both, stock of goods, input tax credit availed, output tax payable and paid the goods or services, goods or services imported or exported or of supplies attracting payment of tax on reverse charge, separate account of advances received, paid and adjustments made thereto, name and complete address of suppliers and customers etc.

26. Mail to customer to compliance of supply disclosure in GSTR 1 To Avoid Any Future Dispute:

It is highly recommended to send mail to customer, stating that –

• We have disclosed and paid GST on all supplies made to you on GST Portal during FY 2023-24 in our GSTR 3B and GSTR 1 Return. You are requested to kindly check the same in your GSTR 2B on GST Portal and inform us “in writing as reply to this mail” in case of any issue/discrepancies within
• Please note that there is time limit in GST Law to make correction in supplies uploaded in GSTR 1 on GST Portal. Therefore, it is utmost important that correction if any should be made before time limit given in law. Therefore, you request you to please check that supplies made by us to you, are getting correctly disclosed against your GSTIN in your GSTR
• Further note that, if we don’t receive any response/communication to this mail, we will assume that there is no error/mistake and our supplies is correctly disclosed in your GSTR 2B on GST Portal and therefore we will not be liable for any error/omission observed by you in future and we will not entertain or not liable for any claim in this regards, if we don’t receive any response from you within ”
• Further, the same case will also apply in case of vendors from where you are purchasing or availing the goods or services.