The Department is using deep analytics tools and several GST Notices these days are also system generated like Non Filing of GST Returns on Time , Incorrect ITC claim etc.. Here are some tips to avoid such and other GST Notices and be compliant.
1. File your GST Returns on time. Yes you need to. Avoid late fees. Avoid Interest Liabilities.
2. Prepare ITC Reconciliation monthly/yearly as well as at the vendor and invoice levels. It is important to know which supplier is charging you GST and not filing their returns. Remember your ITC claim is at risk if your supplier doesnot reflect sale to you in his GST Returns.
3. Make sure to do proper Reconciliation between GSTR 2A vs GSTR 3B vs ITC Register vs GSTR 8A vs GSTR 9 vs GSTR 9C. Basically reconcile all the GST MIS Reports available on the portal with your GST Calculations.
In some cases, and as per your particular scenario, reconciliation should also be done at the EWB level.
4. Compute entitlement of ITC with respect to Vendor Registration Status, i.e. active or cancellation, as well as Return Filing Trend. It is always advisable to check and confirm whether Vendor GSTN is aadhar linked on the Principle of the Protective Model.
5. It has also been seen that officers sometimes ask to substantiate whether the payment to the vendor was made within 180 days or not as well as HSN / SAC confirmation. Did you know if payment to your supplier is delayed beyond 180 days you need to reverse your ITC claimed.
6. Some officers may also ask you to produce Stock Register, Job Work Register, Vendor Register, Production Register, Good Received Note in addition to ITC Register, so it is always better to keep them prepared at all times to remain protected.
7. RCM Reconciliation and RCM Compliance Verification is pretty common nowadays, along with Credit Note Reconciliation.
Sometimes the Officer may also ask you to produce a sample copy of the invoice at the monthly level and sometimes vendor wise.
8. The Officer will ask you to produce a reasonable number of invoices to vouch for the content of the Tax Invoice. Besides that, he/she might also ask to substantiate the information with EWB mapping.
9. Back-Up Calculation Sheet for GSTR 3B.
10. Accumulated ITC, Ineligible ITC, Non-Reversal of ITC in case of Exempted as well as RCM Supply, Cancellation of EWB, and the Proof of Delivery of Goods is always a matter of concern.
11. Ensure to maintain reconciliation of your Income Tax & GST Turnover. Ideally avoid any discrepancy.
Taking care of all the above points will allow you to remain calm and tension free even when you get the ITC mismatch notice or any other notice. However, if there are specific instances of non-compliance in your company, we would suggest you get it rectified right now.
Your biggest enemy is the mindset: I will do it if I get a notice!
Need assistance with your GST Compliances feel free to connect with us.