Core service
GST
GST is a monthly discipline rather than an annual one. Credit depends on what your supplier has filed, returns once filed are difficult to correct, and a difference left unexplained for a year becomes a notice in the third.
The obligations themselves are not complicated: register where liable, raise compliant invoices, file the outward supply and summary returns each period, pay the tax, and reconcile what has been claimed against what the system shows. What makes GST demanding is that the pieces have to agree with one another — the books, the returns, the credit statement generated from your suppliers’ filings, and the annual return that draws all three together.
Input tax credit is where most disputes originate. It is conditional: on holding a valid invoice, on the supply having actually been received, on the supplier having declared it and paid the tax, and on the claim being made within the period the law allows. A credit taken correctly in principle but claimed after the period has closed is still lost, and one taken on a supplier’s invoice that the supplier never declared will surface as a mismatch long after the payment was made.
Compliance work here is treated as the preparation of a record that will be examined. Scrutiny of returns, departmental audit and demand proceedings all begin from the filings, and the quality of what was filed usually determines how long the resulting correspondence lasts.
Registration and periodic returns
- Registration, amendment, additional places of business and cancellation
- Voluntary registration, and registration on crossing the threshold
- Composition scheme — eligibility, election and its consequences
- Outward supplies in GSTR-1, and the invoice furnishing facility
- Summary return and payment in GSTR-3B
- The quarterly return with monthly payment option, where it is available
- Returns for input service distributors and for e-commerce operators
- Nil, amended and late filings, and the consequences of each
Input tax credit and reconciliation
- Reconciliation of credit claimed against the auto-populated GSTR-2B
- Following up suppliers whose filings do not reflect your purchases
- Blocked credits, and credits requiring reversal
- Reversal where payment to the supplier is not made within the period allowed
- Apportionment of credit between taxable, exempt and non-business use
- Credit on capital goods, and the treatment on disposal
- Reconciliation of turnover and tax between the books, GSTR-1 and GSTR-3B
- Reconciliation of GST turnover to the income tax return and financial statements
Annual compliance and transactions
- Annual return in GSTR-9, and the reconciliation statement in GSTR-9C
- E-invoicing, and the e-way bill requirements that accompany movement of goods
- Classification, rate determination and place of supply questions
- Reverse charge liabilities, including on imported services
- Exports and supplies to special economic zones, under bond or letter of undertaking
- Refund claims — exports, inverted duty structure and excess balance
- Job work, branch transfers and cross-charge between registrations
- Response to scrutiny of returns, departmental audit and demand notices
When this applies
Situations this covers
Credit claimed does not match the credit statement
The difference has to be identified invoice by invoice and pursued with the supplier, because the credit is conditional on their filing rather than on your payment.
Returns have been filed but never reconciled to the books
Turnover in GSTR-1, tax paid in GSTR-3B and revenue in the accounts should agree. Where they have not been checked for a year or more, the annual return is where the difference becomes visible.
A notice has arrived proposing a demand
Scrutiny and audit notices ordinarily point at a specific difference. Establishing whether it is a real short payment or a reconciliation issue comes before drafting any reply.
You have started supplying into another state
Place of supply determines which tax applies, and a presence in another state may require a separate registration there before supplies begin.
Exports, or a refund that has not come through
Refunds turn on the option chosen — with payment of tax or under a letter of undertaking — and on the documentation matching the shipping records exactly.
Registration was cancelled, or is proposed to be
Cancellation carries return and reversal obligations of its own, and revocation is available only within a defined period after the order.
Method
How the work runs
- 01
Establish the compliance position
Registrations held, returns filed and not filed, credit lying unclaimed or unreconciled, and any notice outstanding are listed before anything else is done.
- 02
Fix the source data
Invoice formats, item masters, rate and classification decisions, and the way sales and purchases are recorded are settled first, because every return afterwards is drawn from them.
- 03
Reconcile monthly, not annually
Credit is matched to the auto-populated statement and turnover to the books each period, so that a difference is chased while the supplier still remembers the invoice.
- 04
File within the period, and pay
Returns are filed and tax deposited within the due dates, with interest and late fee exposure computed rather than discovered.
- 05
Close the year properly
The annual return and reconciliation statement are prepared from reconciled figures, and differences that remain are explained on the face of them rather than left silent.
- 06
Deal with what comes back
Scrutiny, audit and demand proceedings are answered from the reconciliations already prepared, which is the practical reason for preparing them.
Questions
Commonly asked
General information on procedure. It is not advice on any particular matter.
When do I have to register?
Liability arises on crossing the turnover threshold applicable to your kind of supply and state, and separately in a number of situations regardless of turnover — inter-state supply of goods, supplies through an e-commerce operator, liability under reverse charge, and casual or non-resident supply among them. Because registration is effective from the date liability arose rather than the date you apply, the position is worth checking as turnover approaches the threshold rather than after.
My supplier has not filed, so the credit is not showing. What can I do?
The credit is conditional on the supplier having declared the supply and paid the tax, so it cannot simply be claimed on the strength of the invoice and the payment. The practical route is to identify the missing invoices from the reconciliation, take it up with the supplier while the period is still open to them, and withhold payment where the contract allows it. Left unresolved, the credit is reversed with interest, and recovering it from the supplier afterwards is a commercial matter rather than a tax one.
Can a return be revised once filed?
Not in the way an income tax return can. There is no revised return under GST; an error is corrected by amending the particulars in a subsequent period’s return, and only within the period the law allows for amendments relating to a financial year. After that window closes the difference can only be dealt with in the annual return or, if it has resulted in short payment, by paying the tax with interest. This is why accuracy at the time of filing matters more here than in income tax.
Do I need GSTR-9 and GSTR-9C?
The annual return in GSTR-9 is required of registered persons above a prescribed turnover, with exemptions for smaller taxpayers, and the reconciliation statement in GSTR-9C is required above a higher threshold. Both are drawn from the periodic returns and the books, so their difficulty depends entirely on whether reconciliation has been done through the year. Where it has not, the annual return is usually the point at which several years of differences surface at once.
What is the difference between departmental audit and scrutiny of returns?
Scrutiny is an examination of the returns themselves, where the officer points to a discrepancy and seeks an explanation. Departmental audit is wider — records are called for and examined over a period, at your premises or theirs, and it concludes with findings that may lead to a demand. Both are answered from the same material: the reconciliations between the returns, the books and the credit statement.
What does it cost?
Professional fees depend on the number of registrations, the volume of invoices, whether the engagement is periodic compliance or a one-time review or reconciliation, and the state of the existing records. Scope and the basis of fees are agreed in writing before work begins. Fee rates are not published here.
Are the returns and the books telling the same story?
Most GST demands begin as a difference between two filings that nobody reconciled at the time. The differences are far cheaper to find yourself than to have found for you.
Related services
- Notices & RepresentationDrafting of replies to Income Tax and GST notices, and representation before the assessing and adjudicating authorities.
- Appeals & TribunalsPreparation and filing of appeals at both the first appellate and tribunal levels, with statements of facts, grounds of appeal and representation.
- Accounting & BookkeepingBooks of account maintained to statutory standards, with periodic financial statements.
- Business & Tax AdvisoryAdvisory on business structure, transactions and the tax consequences of proposed decisions.