Checklist for GSTR 9/9A and GSTR 9C

Checklist Inward Supply

• Taxpayers/Consultant should examine that all inward supply of raw materials, Packing Materials, Fuel, Stores and spares and services procured through purchase/Service order and from purchase order level itself registered taxable person are in position to determine the eligibility of ITC on such transaction with nature of transaction viz. composite supply, mix supply and ITC was availed with satisfying the conditions of section 16(2) of CGST Act, 2017 and Rule 36(4) of CGST Rules, 2017.
• Taxpayers/Consultant should examine that ITC was availed after receiving of Goods and services according to Section 16(2)(b).
• Taxpayers/Consultant should ensure that proper documentation for partial and full rejection of materials for inward supply and Credit note was issued by suppliers in case of such rejections are duly accounted.
• Taxpayers/Consultant should examine that proper system for accounting in case of materials received in short quantity and proportionate ITC was availed in such scenario.
• Taxpayers/Consultant should also ensure for non-availment of ITC in case of free sample received from suppliers.
• Taxpayers/Consultant should ensure that ITC availed based on eligible documents viz. Bill of entry, Tax Invoice, ISD Invoice, Self-Invoice and debit notes issued by the suppliers with supporting of Goods/Service received note.
• Taxpayers/Consultant should examine that prescribed record/electronic records under section 35 of CGST Act, 2017 read with Rule 56 and Rule 57 of CGST Rules, 2017 are maintained.
• Taxpayers/Consultant should ensure that all inward supply should be bifurcated in Input/Input Service and capital goods.
• Taxpayers/Consultant should ensure that ITC on all inward supply based on GSTR-2B (105%) up to December, 2021 was availed w.e.f. 01-01-2022 ITC will be based on entries reflected in GSTR-2B.
• Taxpayers/Consultant should ensure that e-way bill towards inward supply was received and maintained towards inward supply for the period of compliances, breach of the same for which department may litigate/dispute and may issue Notice for scrutiny under Form ASMT-10
• Taxpayers/Consultant should be examining the transaction of Inward supply which falls under Block credit under section 17(5) of CGST Act, 2017 and ensure that no ITC was claimed on such inward supply.
• Taxpayers/Consultant should also ensure that Inward supply for which payment towards value of Goods and GST was not made within 180 Days, ensure for reversal of ITC under Rule 37 of CGST Rules, 2017 from the date of Invoice along with Interest @18% which calculate from date of ITC taken and date of reversal of ITC.
• Taxpayers/Consultant should ensure that no disallowance of ITC should be done when inward supplies received under Schedule-I without consideration, in this cases supplier has been deemed to be paid in terms of Section 16(2)(c ) of CGST Act, 2017
• Taxpayers/Consultant should ensure that proper reconciliation between inwards supply shown in GSTR-3B/Input tax credit register and GSTR-2B was done during the compliance period.
• Taxpayers/Consultant should ensure that re-credit has been taken for ITC for which payment made to vendors after 180 days, which was reversed earlier according to Rule 37.
• Taxpayers/Consultant should ensure for periodical reconciliation of inward supplies as per GSTR-3B vs GSTR-2B vs e-Way Bill vs e-Invoice.
• Taxpayers/Consultant should ensure that all Inward supplies Invoice whose turnover is more than 10 Crores issue tax invoice under section 31 of CGST Act, 2017read with Rule 46 of CGST Rules, 2017 containing IRN in QR code. In absence of QR code containing IRN, Invoice will not be valid Invoice under Rule 48(5) of CGST Rules, 2017 and ITC will not be available.
• Taxpayers/Consultant should ensure that ITC availed based on Original Invoice, Bill of Entry, Self-Invoice, ISD Invoice. ITC will not be available based on Xerox copies of Invoices.
• Taxpayers/Consultant should ensure that in case of Inward supplies entries not reflected in GSTR-2B, proper communication with suppliers by using tab under GSTN "Communication with Tax Payers" should be used for communication. In case authorities claim that since the GSTR-3B doesn't file by suppliers, the tax is not paid as required by Section 16(2)(c ), it can be argued that just CBIC has envisaged such situations and clarified vide a press release dated 18th May 2018, and similar matter was clarified in GST council 27th meeting dated 4th May, 2018, as under;
  Para (iv) No automatic reversal of credit: There shall not be nay automatic reversal of Input tax credit from buyer on non-payment of tax by the seller. In case of default in payment of tax by the seller, recovery shall be made from the seller, recovery shall be made from the seller however reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc.
• Taxpayers/Consultant should ensure that all ITC should be availed up to on or before of due date of GSTR-3B of November end of every financial year under section 16(4) of CGST Act, 2017, care should be taken in GSTR-2B if suppliers filed their GSTR-1 after 11th December it should be shown in recipient end as an ineligible ITC which is not ineligible ITC due to applicability of section 16(4) on recipient not on suppliers.
• Taxpayers/Consultant should ensure that Input Tax Credit on goods against an Invoice are received in lots/instalments, the recipient would be entitled to take credit pertaining to the entire invoice upon receipt of last lots/Instalments, taxpayers also ensure for proper receipt of delivery challans and e-way bills for goods receipt.
• Taxpayers/Consultant should ensure that recipient if already availed depreciation on ITC portion for plant and machinery ensure that no ITC would be availed on such tax components.
• Taxpayers/Consultant should ensure that no Input Tax Credit would be availed by registered person in respect of any tax that has been paid in respect of order where demand was confirmed on account of fraud, willful mis-statement or suppression of facts.
• Taxpayers/Consultant should ensure that exempt supplies which attracts NIL rate or wholly exempt or non-taxable from levy of GST or transactions of securities and value taken 1% of the sale value of securities or sale of land and value of land taken as value adopted for the purpose of paying stamp duty, also ensure that proportionate ITC was reversed in proportion to such supplies or not under rule 42.
• Taxpayers/Consultant should ensure that taxable person not availed any block credit under section 17(5) of CGST Act, 2017 such Motor vehicle for transportation of person having approved seating capacity of not more than 13 persons (Including driver), service for general insurance, repair and maintenance expenses pertaining to motor vehicles, staff welfare expenses etc.
• Taxpayers/Consultant should ensure that no ITC availed on work contract service when supplied for construction of immovable property (other than plant & machinery).
• Taxpayers/Consultant should ensure that taxable person availed ITC on foundation and structural support which needed essentially for installation of plant & machinery.
• Taxpayers/Consultant should ensure that taxable person not availed ITC on goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.

Checklist Outward Supply

• Taxpayers/Consultant should compare the figures of outward supplies with previous year's figures and find out the deviation with justified reason.
• Taxpayers/Consultant should verify that invoice series issued towards outward supply of goods and services for domestic and export are in sequentially maintained. All cancelled/reversed invoices in a computerized system must be examined by taxpayer/auditor and should check whether same was reported in GSTR-1
• Taxpayers/Consultant should ensure that all classification of supplies as composite, non-composite or mixed supply was done correctly also valuation was done correctly according to section 15 of CGST Act read with respective valuation rules.
• Taxpayers/Consultant should examine that all debit notes/journals vouchers issued towards price difference on which additional GST liability payable on such additional consideration, also examined that all such debit note must reported in GSTR-1.
• Taxpayers/Consultant examine the entries in sales register on which GST was not discharged and find out reason for the same with any applicability for exemption notification or reason of non-applicability or reason of keeping out of the scope of supply (say dividend, sale of securities etc.) and in case were the benefits of cum tax valuation is taken, consultant must check if the taxes are not separately collected.
• Taxpayers/Consultant should examine the records maintained towards outward supply of goods viz. Stock and supply of goods/services under section 35 read with Rule 56 & Rule 57 for electronic records.
• Taxpayers/Consultant should examine all job work transaction undertaken during the compliance period with examine that-materials sent was returned with in stipulated time and in case goods supplied from job worker premises GST was discharged on the some and same was entered in sales register, also ensure that Job worker place was added as an additional place of business prior to supply of goods from there.
• Taxpayers/Consultant should examine the Scrap sales register and find out any unusual item sold which are in absolute nature; verify that adequate GST was discharged on the same.
• Taxpayers/Consultant should examine the price list, copy of agreement with customers to ascertain the mode of delivery and terms/conditions for discounts (cash, quantity, price difference). In case of post supply discount passed on by way of issuing credit note ensure for compliance of condition for passing post supply discounts.
• Taxpayers/Consultant should also verify that any amount viz. Packing charges, freight, and any other charges recovered from the customers are been added in while determining the transaction value also ensure for correct classification composite supply/Mixed supply was made at the time of issuing Invoice.
• Taxpayers/Consultant should examine that debit note issued towards late payment interest at the time of receiving the interest instead of due based and such interest added in transaction value for discharging GST liability.
• Taxpayers/Consultant should verify the components of price added in case of free supply of goods/warrantee charges in transaction value and also ensure that any amount for which suppliers is liable to pay incurred by recipient have been added in transaction value.
• Taxpayers/Consultant should examine the delivery challan/non-returnable gate pass issued during the compliance period for goods which was not supposed to return, taxpayer should ensure that adequate GST was discharged for the same and entries was entered in sales register.
• Taxpayers/Consultant should examine the Material transfer note issued to branches within state and outside state and ensure that GST was discharged for said transaction based on transaction value under Section 15 read with Rule 28.
• Taxpayers/Consultant should ensure that correct time of supply determined under section 12 and 12(3) of CGST Act, 2017 under reverse charge mechanism.
• Taxpayers/Consultant should examine the entire supporting document on the basis of which credit note/debit note issued to customers as the credit note could be issued only the taxable value or tax charged in that tax invoice is found to exceeds the taxable value or tax payable in respect of such supply or where the goods supplied are returned by the recipient or where the goods supplied are returned by the recipient or where the goods or services or both supplied are found to be deficient as mentioned in section 34(1) and debit note could be issued only in cases where one or more tax invoice have been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply as mentioned in section 34(3).
• Taxpayers/Consultant should reconcile the turnover of GSTR-1, GSTR-3B, e-Way Bill, e-Invoice and books of account and find out reason for difference and ensure that GST was discharged correctly.
• Taxpayers/Consultant should check whether ISD/Cross charge Invoices raised to their branches in different states with compliance of prescribed provisions of GST.
• Taxpayers/Consultant should ensure that reconciliation of miscellaneous income and components of expenses where such income was netting off should reconcile with GSTR-1 and GSTR-3B outward supplies.
• Taxpayers/Consultant should ensure that in case of supply of capital goods or plant pf machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed in section 18(6) of CGST Act, 2017 or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher.

Checklist - Reports and Notices

Taxpayers/Consultant should scrutinize the following documents to evaluate the implications under GST:

Director Report

Taxpayers/Consultant should scrutinize the "Director Report" in depth to understand the overall financial results of the company, new product launched during the year, new happening and future plan of the company and change in marketing pattern etc. to understand the methodology of the company. Taxpayer should also should review the comments about internal controls system and their adequacy. This enables the taxpayer to have an idea about increasing the GST liability on value addition in case of new product launched during the year and corresponding increase in ITC availability. In case of change in marketing pattern/mode of delivery enable the taxpayer to examine the change in type of supply like composite supply/mixed supply and determination of place of supply.

Statutory Audit Report

Taxpayers/Consultant should examine the 'Statutory Audit Report' to fund out the qualified/adverse opinion given by statutory auditor to link theses finding with any liability arises under GST or any impact on GST liability from qualification made by statutory auditor. Statutory auditor reports that company have made adequate provision/written off/written down the value for obsolete inventory items which are currently non usable, taxpayer should examine this note in light of section 17(5)(h) of CGST Act, 2017 which provides that ITC shall liable to be reversed in case of goods lost, stolen, destroyed, written off or disposed of by way of gifts or free samples.

Taxpayers/Consultant should examine and ensure that outstanding GST payable shown in books and GST return shown at the end of the Financial Year is matched with GST dues and also ensure that company is regular in depositing undisputed statutory dues for Goods and Services Tax, to the appropriate authorities.

Cost Audit Report/Cost Accounting Records

Taxpayers/Consultant should verify the cost Audit report of the company which covers under Cost Audit to scrutinize the details regarding quantitative and financial details regarding production, supply of goods, capacity utilization, input-output ratio, related party transaction according to section 15(2) & valuation Rules 28, reconciliation of annual turnover with taxable value of goods produced as per the GST returns. In case of registered person is not covered under Cost Audit, the taxpayer/consultant should scrutinize the cost accounting records prepared by registered taxable person, wherever applicable. Taxpayer/consultant should be cross check all information shown in Cost Audit Report/Accounts with Records maintained under Section 35 of CGST Act, 2017 read with Rules 56 & 57 of CGST Rules, 2017.

Tax Audit Report

Taxpayer/consultant should examine the Tax Audit report under tax Income Tax Act, 1961 to verify the depreciation claimed on capital goods, details of Input tax credit availed and utilized with opening and closing balances, taxpayer/consultant should ensure that double benefits not claimed towards ITC and depreciation, also taxpayer/consultant should scrutiny of prior period income/expenses incurred and their impact on GST for time of supply point of view. Taxpayer/Consultant should examine that No ITC was claimed for prior period expenses for which time limit for availing ITC was lapsed similarly taxpayer/consultant should also examined that GST implication on prior period Income like interest for late payment received in subsequent financial year.

Internal Audit Report

Taxpayer/Consultant should examine the internal audit report for the audit period and examine the points raised relating to impact on the ITC and GST liability.

Notices Issue by department

• Taxpayer/Consultant should check whether all notice/order (specified documents) received from the CGST department after 05th November, 2019 are containing DIN (Document Identification Number) and after 24th December, 2019 including e-Mail containing DIN in case DIN was not mentioned these documents treated invalid documents.
• Taxpayer/Consultant should review current status of pending cases at various stages viz. audit, SCN and appeals. Taxpayer/Consultant should also examine if assesses follows the same methodology for transactions pertaining to compliance period by not discharging the GST for transactions which was already disputed by department and litigation going on for the same, in such case taxpayer/consultant ascertain the disputed liability.
• Taxpayers/Consultant should ensure that all reply letters filed to department must be duly acknowledged by the department.
• Taxpayer/Consultant ensure that Notices for scrutiny issued in form of ASMT-10 was timely replied in ASMT-11 and examined that matter has been whether closed or proceeding for issuing Intimation for demand under DRC-01A and DRC-01 is going on.
• Taxpayer/Consultant should also examine that whether prior to issue DRC-01, DRC-01A was issued or not

Checklist - Internal Documents

Profit & Loss Account

• Taxpayer/Consultant should scrutinize the profit and loss account for supply of goods and services towards domestics and export also scrutinize the other income viz. Scrap sale, Misc. Income, Insurance claim, sale of fixed assets and export Incentive for examine that whether same are liable for GST.
• Taxpayer/Consultant should examine expenditure side of profit and loss account to ascertain the Input tax credit availed on Raw Materials, packing materials, processing materials and stores items also verify the transactions which covers under reverse charges basis under section 9(3) of CGST Act, 2017.

Trial Balance

• Taxpayer/Consultant should scrutinize the trial balance of registered locations for the full periods of compliance. Trial balance statements showing all balances of debit and credit transactions which was clubbed into group and transferred to profit and loss account and balance sheet.
• Taxpayer/Consultant must ensure for correctness for data for particular location for which he was appointed and also ensure that trail balance was prepared through software like Tally/SAP or in excel.
• In case of taxpayer/consultant observed that in trial balance grouping post supply discounts was grouped/subtract with sales turnover, in such case taxpayer/consultant should examine the conditions of discounts according to section 15(3) of CGST Act, 2017 has been complied with for admissibility of post supply discounts which are not reflected in selling & Distribution expenses in trial balance.
• Taxpayer/Consultant should verify the nature of transaction which are unusual or exceptional nature and select the same for detailed scrutiny for GST point of view. Taxpayer/Consultant should examine the extraordinary Income/prior period income which grouped in trial balance under Income and find out the impact of GST liability.
• Taxpayer/Consultant should verify the nature of transactions which are nature of Income which was shown in credit side of trial balance like Job work income, Interest Income, recovery for transportation charges, commission and recovery from employees and penalty from contractor/vendors. Taxpayer/Consultant must examine that the correct GST liability was discharged on the same.

Notes of Accounts

• Taxpayer/Consultant should examine the Notes of accounts carefully to ascertain any kind of GST liability arises under Section 17(5) and reversal of ITC for materials used for unproductive/non-business purpose.
• Taxpayer/Consultant should examine the Notes of accounts relating to share capital carefully to ascertain the holding/subsidiary company relationship of entity or vice-versa and GST impact of the same according to valuation Rules, 2017 towards related parties' transactions.

Contingent liability

Taxpayer/Consultant should also examine the disputed tax liabilities towards Customs/Income Tax/GST were shown in Auditor Report; taxpayer/consultant must ensure that based on disputed tax liability find out any impact of GST liability. In case of a company which migrates VAT credit through Tran-I as on 30.06.2017, which eligibility disputed by VAT authority during the period of audit, in such case taxpayer/consultant should quantify the ITC reversed along with Interest under section 50 of CGST Act, 2017.

Evaluation for Anti-profiteering

Taxpayer/Consultant should also verify the accounting ratio, input output ratio and gross profit ratio from tax audit report and see the impact under GST for anti-profiteering for any reduction in rate on any supply of goods and services and benefit of Input tax credit under Section 171 of CGST Act, 2017.

Creditor/Debtor/General Leder

Taxpayer/Consultant should examine the creditor ageing/ledger, debtor ageing/ledger and general ledger and find out any GST liability for payment not made to suppliers within180 days and reversal required and similarly advances received from debtors and applicability of GST on advances.

Fixed Assets Register

Taxpayer/Consultant should also ensure that company also maintained ''Fixed Assets Register' and also ensure that proper internal control was there for acquisition and disposal of fixed assets and ensure for GST impact on the same. Taxpayer/Consultant should also ensure that proper physical verification of finished goods and raw material was conduction during the year and shortage/excess was accounted properly with GST impact, taxpayer/consultant must ensure that ITC was not capitalized in Fixed assets and GST was discharged on sale of fixed assets according to section 18(6) of CGST Act, 2017 amount equal to the Input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher.