The authorities has a short while ago built some variations in the GST return filing procedure. The return types proposed earlier called the RET varieties with ANX (annexures) have been shelved. The current GST returns in sorts GSTR-1, GSTR- 2A and GSTR-3B are finding a total makeover. GSTR-1 relates to returns filed by suppliers for all outward materials. GSTR-2A relates to buys of a organization. Though GSTR-3B is a return for payment of GST taxes. Let’s recognize some essential responsibilities that taxpayers have to show up at to for the duration of the thirty day period of September and also seem at the new types for taxpayers.
New Return sort GSTR-2B
A new statement named GSTR-2B, which is relevant for all standard taxpayers has been launched. The data in GSTR-2B is currently being auto-populated from GSTR-1. Additional, GSTR-1 particulars will be vehicle populated into GSTR-3B, to pay back GST dues. GSTR-2B and auto-linking of GSTR-1 with GSTR-3B are becoming executed from July and August 2020 return interval onward.
Shifting from GSTR-2A to GSTR-2B – The positive aspects and street in advance
There is a shift in the need to have to reconcile buy registers from GSTR-2A to GSTR-2B from July 2020 return period onwards. In this assertion, taxpayers can check out the summary of qualified and ineligible ITC with a further bill-sensible split up of purchases as effectively as imports. For instance, ITC for August 2020 return interval will be taken centered on the paperwork noted by their respective suppliers among 12th August and 11th September 2020.
On evaluating GSTR-2B with the existing GSTR-2A, particulars claimed in GSTR-2B for a thirty day period will keep on being regular as soon as noted by the respective suppliers. On the other hand, GSTR-2A is a dynamic statement. If a user checks his GSTR-2A for August 2020 on 19th September 2020, the specifics of materials in it might not be the exact same as 12th September 2020.
The move can assist registered prospective buyers in steering clear of ITC reconciliation hassles and inconsistencies in GSTR-2A. It is because GSTR-2A alterations every time their suppliers make adjustments to the invoices noted. The taxpayers and authorities can also conveniently review and be absolutely sure of the complete ITC that the taxpayer need to avail for a month, minimizing the scope for litigation. The department will be verifying the ITC claims in GSTR-3B on a potential date, it will need not lean upon taxpayers’ contention that the dynamic GSTR-2A as on a unique day was referred for ITC promises in GSTR-3B. There is also a require to automate the ITC statements in GSTR-3B by means of introducing a facility to settle for and reject the qualified ITC discovered in GSTR-2B. An extra window to pick and keep track of the 10% provisional ITC statements will be an icing on the cake.
Deadline to reconcile GST information of FY 2019-20 for September
Also, note that the deadline to reconcile FY 2019-20 GST details is below, i.e. September 2020. To recap, the September return interval of a 12 months adhering to a money year is substantial as per the GST regulation. The federal government delivers time to rectify problems made in regular returns throughout a related money 12 months in the September returns of the upcoming fiscal yr which is filed subsequently. Return for September of a year is the past return period of time during which taxpayers can rectify any omitted or incorrect particulars in the returns filed all through the previous economic 12 months. These corrections are essential for an exact closure of that fiscal yr. They will also form an important checkpoint for the duration of the GST audit.
To make confident ITC is correctly claimed for a economic year, registered taxpayers require to reconcile GSTR-1 with GSTR-3B from 1st April 2019 to 30th September 2020, for invoices lifted in FY 2019-20 and associated debit-credit notes. After that, they can report skipped invoices or make amendments in GSTR-1 of September 2020 to be submitted on or by 11th Oct. Similarly, they need to reconcile Input Tax Credit (ITC) for FY 2019-20 claimed in GSTR-3B with GSTR-2A and acquire documents for the same time period given above. Appropriately, they can claim any skipped out ITC or reverse the surplus promises right before filing GSTR-3B on or by 20th October (22nd or 24th for small taxpayers).
Complexities in Yearly Reconciliation this year
For FY 2019-20, taxpayers may well confront complexities in ITC reconciliation because of to the inclusion of CGST Rule 36(4). Let’s fully grasp this rule a little bit more. Between 1st April 2019 to 8th October 2019, taxpayers were permitted to claim ITC in their GSTR-3B on a provisional basis without having proscribing the higher limit. From 9th Oct 2019 to 31st December 2019, a 20% restriction was imposed on provisional credits each thirty day period centered on suitable ITC in GSTR-2A. It was lessened to 10% from 1st January 2020 onwards. As a reduction from the pandemic, the restriction was suspended in between February 2020 to August 2020. However, taxpayers must claim ITC as per GSTR-2A cumulatively from February to August from September 2020 onwards. There can be overlap or spillover in the ITC promises because of to these developments over the earlier year, top to troubles though reconciling for September 2020 returns. To top it, the tax gurus need to parallelly tutorial their clients for all the alterations introduced by using GSTR-2B.
More compliances in September 2020
Apart from the previously mentioned ITC reconciliation, taxpayers will have to also finish filing of GSTR-9 and 9C for FY 2018-19 by 30th September 2020 to stay clear of a late fee. Tax gurus may perhaps obtain it challenging to meet different deadlines lined up in September 2020 for small taxpayers. As a relief measure, compact taxpayers can file their GSTR-3B from May well to August 2020 within just specified dates of September 2020 without the need of late fee. Hence, the quantity of returns to be filed may be tasking for specialists.
Hence, from all the compliance outlined over, it can be comprehended that September 2020 is possible to be a fast paced thirty day period, primarily for tax industry experts. More, the yearly ITC reconciliation for FY 2019-20 done throughout September-October 2020 calls for further consideration to Rule 36(4) as well as shifting to GSTR-2B from GSTR-2A from July 2020 onwards.
Implications of not completing GST Reconciliation timely
Suppose the taxpayer has skipped finishing yearly reconciliation before filing September 2020 returns. In that circumstance, he will experience discrepancies when making ready the annual returns for FY 2019-20. However, by then, the window to claim any suitable ITC and make vital amendments to invoices would have been skipped, top to surplus tax outflow.
(The author is the Founder and CEO, ClearTax. Views expressed are his individual.)
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