Share holding

GST liability & ITC impact w.r.t merger/de-merger/transfer; Registration in portal – Amend & Signing (change in signatory)

Gratuity

ITC eligible on gratuity insurance as it is not life/health insurance

Govt. Grants

Other than CG/SG, consideration received in form of grants/subsidy would be liable under GST. (Ex: NGOs/ NPOs)

Trade payables

Rule 37 - 180 days ITC reversal provision can be verified.

ITC to be reversed and re-claimed upon payment.

Note: Rule not applicable w.r.t Retention money unpaid.

Current liabilities

GST not applicable on mobilization advance.

GST applicable on advance against services only (not goods)

Property, Plant & Equipment

1. Land & Buildings: Additions – GST eligible on ancillary; Deletions – ITC reversal (common credits)
2. Plant & Machinery (others): Additions – ITC eligibility incl. civil structures/construction; Deletions – Section 18(6)
3. Motor Vehicles: Additions – ITC eligibility check; Deletions – Margin method/full rate liability.

Note: Rule 43 – ITC reversal w.r.t Capital Goods used for taxable + exempt supply. (Computational challenge)

Intangible assets

Cross charge implications if multiple GSTINs.

Absence of asset/expense may indicate related party transaction.

Trade Receivables

Decision to raise credit note before September month GSTR3B due date following the financial year (only due to deficiencies)

Note: Option of Refund against write-off of non-receivables – Payment from customer and valuation can be said to be linked, and if payment fails, levy fails. (disputable)

Inventories

1. Imports: Possible Customs/FTP benefits to be explored
2. Related party purchase: Valuation check
3. Write-off/disposals: Raw material – ITC reversal, semi/FG – ITC eligible (as used in business – disputable)
4. Scrap/Further supply: Classification & Rate applicability
5. Loss: ITC reversal may be required for abnormal loss only

GST dues & Balance with govt. authorities

1. Indicates - interest & possible SCN/demand on past dues
2. Identify - Status, accumulation reason & re-claim to bank
3. Credit & cash balance – books vs GST portal

Other current assets

1. Type of incentives (Ex: MEIS, CER, etc.), possible GST on scrip/security sale
2. Time of supply implication (Accounting standards vs GST)

Revenue from operations (goods/services)

1. Levy, valuation, classification, Time & Place of Supply verification
2. Exempt supplies/certain Sch III items – ITC reversal impact

Other indicators: E-invoice compliance/PLI scheme/State incentives

Other Income (identify goods/services only)

Levy, valuation, classification, Time & Place of Supply verification

Indicates - Non-GST supplies/Sch III items for GSTR 9 disclosure.

Segment reporting

1. SEIS, MEIS/RODTEP benefits realized against exports.
2. Imports - FTA between countries, CEPA and can also be explored.

Employee benefit expenses

1. Sch III no GST. (incl. ex-pat salary)
2. ITC eligibility to be verified (ex: insurances, necessity goods like water, medicine, gifts, recreational/business trip, etc.)

Conveyance

1. Women employee travel beyond 8:30 pm – statutory obligation - ITC eligible (Ex: in Karnataka)
2. 13-seater + vehicles – ITC eligible
3. Goods vehicle – ITC eligible
4. Reimbursements GTA/rent-a-cab – RCM liability

Power & fuel

Table 5 GSTR 3B – inward – exempt & non-GST supply disclosure

Freight

1. GTA (agency) vs GTO (operator – exempt and not under RCM)
2. FCM vs RCM (5% vendor beneficial if credit ineligible)

Rent

1. ITC eligibility (different state billing - ineligible)
2. Residential – exempt – even if recovered from employees

Repairs & Maintenance/Building expenses

1. Motor Vehicle: Depends on vehicle eligibility
2. Premises: Eligible when it is an expenses
3. Plant & Machinery: Eligible

Communication costs & Bank charges

ITC eligible but GSTIN missed in Tax Invoices – Internet, Telephone, bank charges (tax invoice not just statements.)

Food & Beverages (F&B)

Canteen – mandatory – ITC eligible as per Factories Act/Rules.

Water – ITC eligible (it is not ‘beverage’)

Others F&B - ITC ineligible

Professional fee

1. ITC eligibility
2. Possible RCM on import of services

Legal fee

1. RCM & ITC
2. Non-advocates/non-legal activity considered under this head for RCM incorrectly.

Rates & Taxes; Subscriptions

1. RCM on CG/SG/LA services not being exempt (ex: Leased line license from Ministry of Telecom). Verification of ‘supplier’ not being governmental authority/entity and transaction if liable/exempt as per rate notifications.
2. Subscriptions - Import of services – Form 27Q/Credit card forex payments

CSR

Possibility to claim ITC subject to general ineligibility. (disputable)

Helps increase social expenses, positive for India.

Other common costs (Ex: IT Costs)

Requirement of ISD to transfer credit to GSTINs utilizing such services. (multiple GSTINs)

Profit/Loss of sale of FA

1. Motor Vehicle: Margin/full value liability
2. Section 18(6) – 5% per quarter reduction requirement.
3. WDV block concept can be adopted instead of date of sale.

Generally, a reconciliation item for GSTR 9C Vs AFS.

Related Party disclosures

1. Classification of goods/services
2. Valuation supply-wise
3. ITC eligibility

RPT - Directors

RCM liable on directors sitting fees/any other services rendered in the capacity of director.

Advertisement, Sales promotion expenses

1.RCM on sponsorship

2.ITC eligibility on sales promotion