GST Registration – All taxpayers with a turnover
All taxpayers with a turnover above the basic threshold limit are required to register under GST. It is also compulsory for certain peoples, including UIN holders, e-commerce providers, TCS / TDS deductors, etc. All of these entities must file GST returns and follow the rules and regulations formulated in the GST Act. Other than provisions for registration and tax clearing, the Act also says provisions for individuals who are no longer responsible to pay GST or voluntarily choose to cancel their GST registration.
Since GST was introduced, we have seen the department’s diverted concentrate on the inclusion of extremely critical compliances in GST. The GST council now places stronger focus on formulating reporting standards for taxpayers in GST by adding input and output credit compilation, reconciliation, preparation and filing of annual account statements / returns and receipt of GST audit certificate.
All of these compliances will represent an significant basis for the first GST audit / scrutiny / assessment.
The law now also prescribes multiple audits, either by appealing to some authority or by appointing an external auditor, to be carried out by entities. The previous kinds of audits were required for companies under the GST Act:
Audit by commissioner under section 65 of the CGST Act, 2017
Special audit in terms of section 66 of the CGST Act, 2017
Audit as part of the annual return process by an external Chartered Accountant (in Form 9C and 9D – draft submitted by the ICAI)
It is essential for businesses to begin planning for these audits to avoid any credit reduction, interest/penalties applicability, etc. Some of the main aspects that businesses must consider are as follows:
Reconciliations: Ensure reconciliations between the account books, returns and e-waybills issued (output side)/tax released by the vendors (input side).
Tax Position: review the company’s revenue statements and also whether they are properly represented in the documentation.
Credits: Examine whether any ineligible credits have been used (including the credit review used) and ensure completeness of credits in the process.