GST Advice before finalizing books of accounts

Hey friends, in this blog you will get GST advice before finalizing books of accounts. Financial year 2017-18 has ended on 31.03.2018 and we all are on the verge of finalizing Books of Accounts for that period. Before finalization of Books of Accounts for the purpose of Income Tax, Companies Act, following things is to be taken care of in relation to GST. You all are advised to look upon these details before finalizing the books of Accounts: –

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1. A complete reconciliation to Sale declared under GSTR-1 and GSTR-3B vis-a-vis books of accounts is to be made. If there is any difference between GSTR-1 and GSTR-3B, then either of the two should be rectified in the current period. Differences in relation to previous periods could be adjusted by amending GSTR-1 during filing for current period(month).
2. Mistakes, if any in GSTR-3B should be adjusted in subsequent periods GSTR-3B. If any sales are reducing/ increasing then the same must be adjusted in the current tax periods and tax should be adjusted accordingly.
3. All the purchase and corresponding credits are to be checked and verified with GSTR-3B. Balance of books and online Electronic Credit Ledger should be matched in entirely. Any difference should be adjusted in books or GSTR-3B accordingly.
4. Reversal of Credits : – If there are any exempted supplies, then the credits are to be reversed as advised under Rule 42 and 43. In case of Non business use also the credits are to be reversed to the extent of 5 % in case of capital goods.
5. RCM Payment is to be made: – Reverse charge mechanism was applicable on goods or services taken from transporters, advocates and all the unregistered persons. With effect from 13.10.2017, such reverse charge in relation to unregistered persons was withdrawn. However reverse charge in relation to transporters and advocates (and some other services) is still continuing. Thus it is pertinent to note that Reverse charge in relation to all the unregistered persons were paid upto 13.10.2017 and Reverse charge in relation to transporters and advocates etc are paid till date continuously.
6. If such reverse charges are not paid then they should be given in current period GSTR3B and recorded in the books of accounts accordingly.
7. Items which are denied for the purpose of taking credit. Such credits should not be taken. If any of such credits have been taken, then they should be removed form the books of accounts and GSTR-3B.
8. Any ITC which are related to the year 2017-18 and which could not be taken due to non-receipt of Invoices or non-receipt of material, then such credit should be taken before the month of September – 2018. After that period such credit could not be taken in anyway.
9. If any liability is pending which could not be declared in the return then the same is also to be deposited in time before finalization of books of accounts.
10. Any pending debit/credit notes should also be finalized before finalization of books of accounts and should be declared in the return before the month of September,2018.

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Geetika Goyal (Team Itslyf)

“GST advice before finalizing books of accounts”