Year end Closing: GST related issue and Audit perspective

As 31-March-18 is approaching very fast and the finance department must have started feeling the heat even before the arrival of the proper summer as they have to close the books of account for the year ended March 2018, as this year involve some extra work due to implementation of the GST and the company might be struggling with other indirect taxation authorities, due the deferment of the various provisions of the GST the problem gets even worse.

Here is the list of list of few tasks that should be performed as year-end closing activity so that the uncertainty of the future GST litigation liability can be minimized:

1. Extract the consolidated trial balance and state wise (if the software does not permit the state wise trial balance then it may create the problem for the GST angle).

2. Extract the following registers for the GST and reconcile the same as per the following:

1. Electronic Cash Ledger - Reconcile with GST cash account with the books of accounts (for each component i.e. CGST, SGST and IGST).
2. Electronic Credit Ledger - Reconcile with GST Credit ledger (for each component i.e. CGST, SGST and IGST).  
3. Electronic Liability Ledger - Reconcile with GST Credit ledger (for each component i.e. CGST, SGST and IGST).  

3. Reconcile the state wise sale with the form GSTR-1.

4. Divide all the state wise expenses as per the following:

1. Expenses of which GST credit is taken.
2. Expenses on which GST paid under reverse charge.
3. Expenses on which other indirect taxes are levied (i.e. Service tax, Vat etc)
4. Expenses with Zero rated GST levied.
5. Expenses on which GST not applicable (Non-taxable purchases)

5. Ensure that Bill of Invoice, Revised Invoice, Tax Invoice, Debit Note, Credit note, Receipt voucher, Refund Voucher and Payment Voucher issued as per the requirement.

6. Make sure invoice issued with proper CGST, SGST or IGST levied on it, in case invoices issued under different tax component then the correction must be done by showing the amount as refundable and payable.

7. Prepare the list of invoices on which credit not reflecting in the online form GSTR2A.

8. Check if invoice details in the form GSTR-2A are matching with the actual invoice, if there is any variation get the actual invoice matching with the details in the form GSTR-2A.

9. Reconcile the sale with the Trial balance, GSTR-1 and GSTR-3B state wise and consolidated.

10. Reconcile the export share with the LOU filed with the department.

Disclaimer: The views expressed in this article are strictly personal. The content of this article are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.