GST Return for September of a year is the last return period during which taxpayers can rectify any missing inputs or errors in the returns already filed during the previous financial year. These corrections are crucial for the correct closure of that particular financial year. It also forms an important checkpoint during the self-certification process, i.e, during filing the GSTR-9C. Therefore filing September 2021 GST return is very significant and crucial.
Here is an important checklist for all the taxpayers to consider before filing their September 2021 GST Returns:
1. Avail pending ITC
It is the last chance for availing the pending ITC for the financial year 2020-21 as the taxpayers file GSTR-3B for the Sep’21 return period in October 2021. The entire reconciliation process for the year 2020-21, matching the invoices between GSTR-2A and your purchase book must be completed in order to save a lot of your hard-earned money.
Reconciliation made easy
2. ITC claim on earlier reversal
If GST credit has been reversed during the year on account of payment not made to suppliers within 180 days. The taxpayer can again claim the ITC after payment to the supplier which has been already reversed on non-payment. It is important to check the books of accounts for any such entry on which ITC can be claimed.
3. Checking credit for Reverse Charge
It is important to cross-check your books of account to confirm if you have paid GST under RCM for proper transactions at the appropriate rate and claimed the ITC for the same in the Financial Year 2020-21.
4. Cross-checking purchase bills with GSTR-2A and 2B
During the course of the year, there are multiple missed purchases or no invoice purchases, lost invoices etc. It is important to cross-check the purchases with the available GSTR 2A in order to get the audit right. Now since GSTR 2B is also available, taxpayers need to ensure that they take into account 2B as well.
The latest changes suggest that as per Section 16(4) of CGST Act, 2017, no taxpayer shall take the input tax credit in respect records (invoices and debit notes) for the supply of goods or services (or both) for Financial Year 2020-21 after the due date of furnishing the return for the month of September 2021. The due date for the GSTR-3B for September 2021 is either 20th October 2021 for monthly filers and 22nd or 24th October 2021 depending on the State/UT of registration of the taxpayer. In view of the same, the following may kindly be noted:
- Records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will not reflect as “ITC Available” in GSTR-2B of the recipients. Such records will reflect in the “ITC Not Available” section of GSTR-2B and such ITC shall in turn not be auto-populated in GSTR-3B.
- Records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will also not reflect as “ITC as per GSTR-2A” in Table-8A of GSTR-9 of the recipients.
5. Sale reversed after GST Paid
If the goods are rejected after a few days of the sale and the taxpayer has already paid the GST due on the sale, such differences also need to be pointed out. Reconciliation of GSTR-2A with the taxpayer’s books of accounts is necessary to claim ITC on the basis of Debit Note issued by the party.
6. GST reversal on purchases
If a taxpayer has rejected a part of goods purchased to the supplier and has issued a debit note, such entries are also important to take into account while reviewing the yearly books of account. If the supplier has not accepted the debit note, the taxpayer can reverse the entry to claim the GST ITC paid.
7. Collect ITC on Bank charges
Bank charges like processing fees and unit inspection charges also need to be claimed timely. Cash Credit accounts with banks have to pay ‘processing charges’ for renewal of C/C limits and also have to pay unit inspection charges which are directly debited to their C/C accounts by banks. Taxpayers can collect ITC on such transactions.
8. ITC on Job-work charges
If a taxpayer has taken any job work done via out-sourcing it to small vendors and they have provided GST invoices, then the taxpayer must claim the relevant ITC. Such small entries get missed in the due course of the year. Now is the time to check the books of account and get all such entries together for the ITC claim before filing the September 2021 return.
9. Claim ITC on small expenses like internet, telephone bills etc.
If the bills are in the name of your business and have the business address mentioned then you can claim ITC on the same. People tend to leave such small transactions; however, you can check such entries with GSTR-2A for the complete year and enjoy the benefit by claiming ITC.
10. ITC on Payment for Parcel/Postage/ Courier Charges
As mentioned in the above point, small transactions get ignored throughout the course of the year. But all these small transactions when seen together can save you a lot of money so do not miss taking them into account. Small expenses are not calculated accurately and are often ignored. You can check your GSTR 2A and carry out a proper reconciliation process.
Here is a list of ITC Claims a taxpayer may miss out on considering it a small or petty transaction. However, all these expenses if made for office purposes and are registered on the business name then their ITC claim is possible. Check out the list:
- ITC claim on Insurance of company vehicles
- Purchase of Office Furniture
- Purchase of electronic appliances for office such as Air Conditioner, Television etc.
- Drinking water made available to employees – water is not a beverage and is eligible for ITC Claim. According to the CGST Amendment Act 2018 section 17(5)(b) an employer is entitled to claim ITC on goods/ services which it is statutorily obligated to provide to its employees.
- Printing and Stationery Expenses made
- Office Rent Paid – a GST invoice is needed for the same. Only rent agreements and documents may not work in this regard.
- Business travel expenses of employees. A proper GST invoice needs to be acquired to claim ITC.
- Bills such as electricity and water to the respective boards.
These entries and transactions are crucial to address for an accurate closure of the financial year.
Also, the taxpayers must check up on all the changes introduced in the new GST Return – GSTR 2B also. Thus there are a lot of things to take care of before filing September 2021 GST returns.