Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, July 3, 2017

GST Checklist

HSN/SAC Codes and Rates of Tax: Check your HSN code for goods and SAC code for services from the attached list. Also, check the corresponding tax rate from the schedule of GST rates.

Filing of Past Returns: Ensure that all your past returns (Excise, VAT, Service Tax) are filed in time. The last date for filing of Service Tax Return for April to June is 15th August. Your Input Tax Credit carried forward from CENVAT and VAT is conditional on filing of all returns for the past 6 months and carry forward of proper credit in the last return for June.

Unclaimed Input Credit on Capital Goods: Check if there is any unclaimed input credit on capital goods. Such credit may be available all in one installment after 1st July. This will have to be specifically intimated to the GST Department.

GST Migration Status: Check that your GST Migration status is completed. If not, ensure that the same is done on 25th June when the window reopens. Ensure that a separate registration has been applied for every state in which you have a place of business.

Invoice Formats: Revise your tax invoices for both goods and services, as per the GST Invoice Rules.

Goods with Job Worker: Ensure all inputs or capital goods with job worker are returned to your place of business within 6 months from 1st July. If unreturned, the same will be treated as supply and taxed under GST.

Information from Vendors: Collect the following information from vendors by 30th June:

(i) HSN/SAC Codes of their supplies
(ii) Rates of Tax under GST of their supplies
(iii) Their GSTIN for various locations

Review Vendor Contracts: Review your existing contracts in light of the GST provisions, and wherever no contracts in writing, ensure that you enter into written contracts. Please seek professional help in this regard. You may contact us for any clarification.

Terms of Discount: The terms of offering discount to your customers should be pre-defined in the contracts. If discounts are given post-supply with varying terms, the same may be disallowed for deduction for calculating taxable value.

Review Employee Benefits: Any reimbursements to the employees beyond the pre-defined CTC may be considered as supply and taxed under GST. Please have employee compensation structures reviewed to ensure all bills filed for reimbursement are in the name of the company. Fixed Dearness Allowance may attract GST.

Exempted Goods & Services: Go through the detailed list of exempted goods & services to examine if they are supplied by you or taken as inputs.

GST Returns: 3 GST Returns are to be filed in a month and one annual return by most dealers. Review the formats attached for these returns and call us in case of any clarification.

Software Upgradation: Your accounting software (Tally, SAP, etc.) may require a GST patch. Contact your software dealer at the earliest and ensure upgradation before 1st July.

Stock Audit on 30th June: Conduct a detailed stock audit on 30th June EOD. Old stock may have to be segregated and tagged for identification. This has a direct bearing on input credit availability under GST.

Unregistered Vendors: In case any of your vendors are unregistered in GST, you will have to pay tax under the reverse charge mechanism from any procurements from them. Either ensure all vendors are registered or be prepared to make a note of all purchases for which reverse charge will have to be charged.

Freight: Any charges on account of freight recovered from your customer will be added to taxable value for computation of GST. Please communicate the same to your customers.

Working Capital Management: The new regime will require monthly closing of accounts with all revenues and expenses. GST under reverse charge may impact the working capital. Also, analyze the cost impact of the changing tax rate.

Reviewing Sales Price: Under the anti-profiteering philosophy of the tax regime, any tax savings will have to be passed on to the customer. Thus, calculations to that effect must be undertaken. Failure to do so may attract repurcussions from the GST Department.

Input Credit for Excise to Traders: Traders with excisable goods in their opening stock as on 1st July, but with tax invoices not reflecting Excise paid on inventory will be eligible to input credit for stock not older than 12 months through a 40/60 calculation mechanism specified under GST, on sale of such stock. Please ask your company's accountants to speak to us for understanding this method.

IGST on Imports: CVD and SAD will cease to exist w.e.f. 1st July. All imports to have Basic Customs Duty and IGST levied on them.

Team GST at Sandeep Ahuja & Co.

1 comment: