GST September return is the most crucial of all returns. There are multiple things that should be kept in mind before finalizing the GST Returns of September.
GST Return of September 2020 will not only cover details w.r.t. FY 2020-21 but also of FY 2019-20.
So, while you are busy finalizing the Financial Statements of FY 2019-20, please keep in mind the points discussed here in our article from GST point of view.
Lately, these points can be crucial for finalizing GSTR 9 and GSTR 9C of FY 2019-20 too.
1. Outward Supplies
- Check whether any differences exist in Books of Accounts and GST Returns (FY 2019-20).
- If differences exist in the books and returns, the correction can be done w.r.t. that entry by issuing Credit Notes/ Debit Notes.
- In case the turnover is under-reported in Books of accounts, Debit Notes can be issued w.r.t. a particular entry. In case the turnover is over-reported in Books of accounts, credit notes can be issued w.r.t. such entry.
- Please note that the Debit Notes and Credit Notes w.r.t. transactions of FY 2018-19 can be issued upto September 2020, as they have to be reported maximum upto GSTR 1 of September 2020.
- In case any transaction is not reported/omitted in any of the returns of FY 2019-20, it can be reported upto September 2020 return.
2. Input Tax Credit
- Prepare a reconciliation of Input recorded in books of accounts, input available in GSTR 2A and Input claimed in GSTR 3B.
- Bifurcate the transactions which are excess claimed and less claimed in comparison to GSTR 2A.
- For the transactions which are not appearing in GSTR 2A: In case the suppliers have not reported or incorrectly reported any of your purchases in his GSTR 1, contact them and get it corrected through amendment through September 2020 Return. In case you have incorrectly claimed excess ITC, reversal can be made w.r.t. such claim in September Return (GSTR 3B).
- For the transactions which are not yet claimed in GSTR 3B: The ITC belonging to FY 2019-20 can be claimed maximum upto September 2020. Therefore, while claiming ITC of FY 2020-21, keep in mind the missed ITC claims of FY 2019-20.
3. Rule 36(4) – Input Claim Specific to February 2020 to September 2020 Returns
- Rule 36(4) was introduced w.e.f. 09/10/2019 which restricted the claim of input of maximum upto 20% (from 09/10/2019 to 01/01/2020) or 10% (01/01/2020 onwards) of the amount appearing in monthly GSTR 2A.
- Due to the impact of COVID-19, the Government relaxed the provision and such limit of 10% is to be checked for the block of February 2020 to September 2020.
- So, before finalizing the ITC claim under GSTR 3B of September 2020, check whether claim of ITC from Feb 2020 to September 2020 is not exceeding the amount of 10% of amount appearing in GSTR 2A.
4. Reverse Charge Mechanism
If RCM belonging to FY 2019-20 has not been paid yet, please note that if such payment is not made by September 2020, ITC cannot be claimed on such amount if reported in GSTR 3B beyond the September 2020 return.