This was the point i am discussing with my friends and during my sessions of GST Audit that if the provisions of Rule 46 are not followed then penal provisions can be levied under Section 122 and Section 125. Rule 46 clearly states that on a tax invoice, the bare minimum details have to be shown and if any of the same are missing then 1st proviso of Section 122 can be enforced on the taxpayer which clearly states that penalty of Rs 10,000 per invoice. Refer to Section 122(1) (ii) talks about per invoice, so imagine if the department wants to issue notice for levy of penalty they can issue it per document which is not meeting the said provisions.
Now the same is officially clarified in the Circular #90/09/2019-GST
GST Audit report being prepared should cover this point also, so you can imagine the complexity, quantum of work involved and also the depth of knowledge required to execute it.
What are the transactions i need to show in the Point F of Part II of FORM GSTR – 9C, “Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST” ?
There could be some business cases where the discount being offered is not know at the time of supply or the discount could not be established to particular invoices or input tax credit is not reversed on the trade discount offered or it is not mentioned on the tax invoice. In all the above cases, the trade discount will be part of the financial statements but not part of the GST Returns.
In From GSTR – 9C, what is “Adjustments in turnover due to foreign exchange fluctuations” and in which cases do i need to fill it?
It has to be filled by all taxpayers who have outward supplies in foreign currency and where they issue a tax invoice as well as a commercial invoice. It can be in case of exporters or supplies to SEZ’s where they issue a tax invoice with payment of duty i.e as per the GST at the time of removal of goods and for the foreign customer, a commercial invoice is issued on a subsequent date. The different dates can some time result in different exchange rates being used. This could cause a difference reported in the financial statements and in the GST Returns, for this reason, it has to be mentioned in the Form GSTR – 9C.
For previous FAQ’s click here
What are the various reasons where the GST Liability as per financial statements and GST Returns could be different?
There could a difference due to the following reasons commonly
a) Revenue Recognition
b) Stock Transfer outside the states
c) Advance Receipt from customers
d) GST on paid on job work if not returned in stipulated time
e) Reverse charge on certain goods on outward supplies
f) Reverse charge on inward supplies paid
Is it Mandatory to fill all the columns in Table 4 (Outward Supplies) ? How do I show data in Table 4 of the GSTR – 9 (Annual Return)?
Yes, it is mandatory to fill all the columns of Table 4 if the same is reported in the monthly returns. The break up can be derived from the Ledger Accounts / Chart of accounts if implemented or can be derived from the monthly returns filed from July 2017 to March 2018.
Do I need to do Reconciliationreconciliation between the Financial Statements and GST Returns for the turnover / outward supplies while preparing the GST Audit Reconciliation Statement?
Yes, as per Ind AS – 18, revenue will be recognized only when the risks and rewards are transferred whereas in GST, at the time of Supply (section 13,14 & 15 of the CGST Act 2017) GST Liability has to be accounted.
Example: Goods shipped on 29th March from Delhi to Chennai and they are delivered on 3rd April at Chennai. As per GST, liability has to be accounted and paid in the March months return and as per Ind AS -18, it will not be booked as revenue if the Risk & Reward is not transferred.
As a taxpayer, if I do not file the Annual return by the due date or on the due date, is there any late fee i need to file if i am filing it after the due date?
Yes, a late fee is applicable and the provisions for the same are given in Section 47(2) of the CGST Act. Late is Rs 100 per day or maximum up to 0.25% of the turn over in a state.