GST ACTIVITIES WHICH NEEDS TO BE CARRIED FOR THE NEW FINANCIAL YEAR
Adhering to tax-related compliance proposed by the Indian government is mandatory for taxpayers in India. Non-compliance with due dates of GST return filing as well as GST related rules may result in imposing of heavy penalties by the government for taxpayers in India. Tax compliances have been difficult especially in the COVID period where importance for foremost given to human health and safety. Given below are all the GST related compliances to be adhered to for the year end of FY 2020-21. This article will aid in providing information of the required compliances to be filed, thus making your life a little bit easier this new financial year.
1. GST e-invoicing mandatory for turnover of minimum Rs 50 crore
GST e-invoice is basically a digital invoice for goods and services provided by the business firm generated at the government GST portal.
‘E-invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal.
Under the proposed e-invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN).
All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time.
Mandatory details like supplier and receiver’s names, address, registration number, date and time of supply, invoice date, applicable rate of GST and HSN number for the goods, among others, must be provided for generation of the electronic invoice.
E-invoicing becoming mandatory for entities with a turnover of Rs 50 crore and more from 1st April for business-to-business transactions will be the third phase of e-invoicing roll out.
2. Selection of frequency of Return Filing
Quarterly Return Monthly Payment Scheme or QRMP as it is called is a recently introduced initiative by the Government in its initiative to simplify compliance for taxpayers.
The Central Board of Direct Taxes (CBDT) issued notification 82/2020, 83/2020, 84, 2020 and 85/2020 Central Tax dated 10-11- 2020 and Circular 143/2020 on 10th November, to allow certain taxpayers to furnish their GST returns on a quarterly basis along with monthly payment of tax under QRMP Scheme, with effect from 1st January, 2021, i.e. from last quarter of FY 2020-21.
All taxpayers whose aggregate annual turnover (PAN based) is up to Rs 5 Crore in the current financial year and the preceding financial year (if applicable) and have already filed their last due Form GSTR-3B return, are eligible for the QRMP scheme.
Time limit for opting OUT of the QRMP Scheme for Quarter 1 ending June 2021 is by 30th April, 2021 (if opted IN for Jan – Mar 2021)
3. Companies using accounting software will have to compulsory maintain log of changes for each transaction
Rule 3 of the said rules pertained to Manner of books of account to be kept in electronic mode. According to Sub Rule 1, the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference. The Central Government has now added a new proviso to Rule 3(1).
According to the said proviso, for the financial year commencing on or after the 1st April, 2021, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
4. Application or Renewal of Letter of Undertaking (LUT)
5. Taxpayers to mandatorily declare HSN codes in tax invoices
Harmonized System of Nomenclature or the HSN code is a system that was introduced for the systematic classification of goods all over the country or world. With the HSN code acting as a universal classification for goods, the Indian Government had adopted the use of HSN code for classification of goods under GST and levy of GST.
The Ministry of Finance vide Notification No. 78/2020 – Central Tax dated 15th October, 2020 and Notification No. 06/2020–Integrated Tax dated 15th October, 2020, notified that a registered person has to mandatorily mention the HSN Digits of the HSN Code in tax invoices for the all products sold as follows:
|Aggregate Turnover in the preceding FY||Number of Digits of HSN Code|
|Up to Rs 5 crores||4|
|more than Rs 5 crores||6|
6. Avail GST ITC for FY 2020-21
7. Review payments to suppliers to verify of ITC is not availed if payment is done after 180 days
8. Some Important Areas to be checked w.r.t GST
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