GST Updates for September 2024: New Compliance Requirements and Reporting Rules

As of September 2024, businesses must adapt to new GST requirements such as mandatory reporting of high-value transactions, enhanced verification measures, and revised rules for Input Tax Credit (ITC) claims. These GST updates for September 2024, though technical, are critical for ensuring proper compliance with the GST framework, preventing disruptions in filing returns, and maintaining seamless financial operations.

In this article, we explore the most important GST updates for September 2024 and their impact on businesses across India.

Bank Account Verification Mandatory for GSTR-1 Filing:

As of September 1, 2024, a major compliance update will restrict the filing of GSTR-1 or IFF (Invoice Furnishing Facility) forms for taxpayers who have not added and verified their bank account details in their GST registration profile. This update aims to tighten financial transparency and ensure that all registered taxpayers maintain accurate banking details. Non-compliance with this requirement will result in the blockage of return filing, disrupting business operations.

Invoice Management System (IMS):

Effective from October 1, 2024, the Invoice Management System (IMS) will require buyers to review and take action on invoices uploaded by their suppliers. Buyers can accept, reject, or leave an invoice pending. If no action is taken, the invoice is automatically deemed accepted. The buyer’s Input Tax Credit (ITC) in GSTR-3B will be updated based on these actions. Accepted invoices will result in ITC credits, while pending or rejected invoices may delay the credit. This system ensures better accuracy in ITC claims, encouraging buyers to actively verify invoices to avoid errors and discrepancies in their GST returns.

RCM Liability/ITC Statement:

A new RCM Liability & ITC Statement has been introduced for tracking both the liability paid under the Reverse Charge Mechanism (RCM) and the Input Tax Credit (ITC) claimed. Every taxpayer is required to provide the opening balance of their RCM liability and ITC by October 31, 2024. This opening balance is a crucial element for accurate reporting and can be adjusted or amended up until November 30, 2024. This measure is designed to streamline the reconciliation process, ensuring that businesses accurately report RCM-related liabilities and ITC claims.

Reporting Supplies Over ₹1 Lakh in GSTR-1:

Effective from September 2024, taxpayers are obligated to disclose any supply exceeding ₹1 lakh in Table B2CL of GSTR-1. This is mandated under Notification No. 12/2024, dated July 10, 2024. Despite the rule being technically effective from August 1, 2024, the GSTN portal has not yet fully updated its system to accommodate this change. As a result, businesses are advised to closely monitor the system updates to ensure compliance once the functionality is enabled.

Automatic Carry Forward of Negative Liability in GSTR-3B:

Taxpayers now have the facility to declare negative liabilities in Table No. 3 of GSTR-3B. These negative amounts, which often arise due to over-reporting of tax in previous periods, will be automatically carried forward to the subsequent month’s return. This simplifies the process for businesses by automating the adjustment, reducing manual intervention, and enhancing the accuracy of monthly returns.

Rule 37A Compliance for Buyers:

Under Rule 37A, buyers must verify whether their vendors have filed GSTR-3B by September 30, 2024. Failure by the vendor to file their GSTR-3B will necessitate the reversal of the ITC claimed by the buyer on such purchases. The buyer has until November 30, 2024, to reverse the ITC if their vendor has not complied. This rule emphasizes the importance of timely compliance by vendors to avoid disruptions in the buyer’s ITC claims, ensuring seamless flow of credits within the GST framework.

Conclusion

The GST updates for September 2024 mark another step towards tightening compliance and ensuring transparency in the taxation process. By staying informed and adjusting internal systems accordingly, businesses can avoid penalties and disruptions in operations. Whether it’s the mandatory reporting of supplies over ₹1 lakh, timely bank account verification, or managing ITC reversals under Rule 37A, being proactive is key to navigating the evolving GST landscape. These updates represent both a challenge and an opportunity for businesses to optimize their compliance processes and strengthen their tax practices.

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