Changes in GST Effective from 1st September 2024

In the complex world of business, staying compliant with financial regulations is paramount for every company, regardless of its size or industry. Internal audits play a crucial role in ensuring this compliance, helping businesses identify areas of improvement in financial reporting, risk management, and operational efficiency. Today, we’ll explore the specific criteria that determine whether your company is required to conduct an internal audit.

Who Needs an Internal Audit? The requirements for internal audits vary based on the type of company and certain financial thresholds. Here’s a breakdown of the criteria for listed companies, private companies, and unlisted public companies.

1. Listed Companies Listed companies have specific obligations due to their impact on public investors and the broader economy. If your listed company meets any of the following criteria, conducting an internal audit is mandatory:

• Outstanding loans or borrowings exceeding ₹100 crore during the previous financial year (P.F.Y.).
• Turnover of ₹200 crore or more during the P.F.Y.

2. Private Companies Private companies, often considered the backbone of the economy, are subject to internal audit requirements if they reach significant financial thresholds that potentially increase their risk profiles:

• Outstanding deposits of ₹25 crore or more during the P.F.Y.
• Outstanding loans or borrowings of ₹100 crore or more during the P.F.Y.
• Turnover of ₹200 crore or more during the P.F.Y.

3. Unlisted Public Companies Unlisted public companies, while not traded publicly, hold substantial economic sway and are required to maintain rigorous financial discipline if they meet any of the following conditions:

• Outstanding deposits of ₹25 crore or more during the P.F.Y.
• Outstanding loans or borrowings of ₹100 crore or more during the P.F.Y.
• Turnover of ₹200 crore or more during the P.F.Y.
• Paid-up share capital of ₹50 crore or more during the P.F.Y.

Why These Criteria? 

The criteria for internal audits are designed to ensure that businesses that handle significant amounts of money or have substantial economic impacts are regularly and thoroughly reviewed. This helps in maintaining transparency, enhancing the efficiency of operations, and ensuring that the business complies with legal and regulatory requirements.

Understanding whether your business is required to conduct an internal audit is crucial for maintaining compliance with regulatory standards and ensuring the financial health of your organization. For business owners, staying informed about these requirements not only helps in compliance but also enhances internal controls and operational efficiencies. Ensure your business meets these criteria and consider consulting with a financial advisor to navigate the complexities of internal audits effectively.

Stay compliant, stay informed, and most importantly, stay ahead in your business endeavors by embracing the discipline of internal audits.

About the Expert:

Mr. Butchibabu, Chartered Accountant, is a renowned expert in GST compliance and tax advisory services. With years of experience guiding businesses through the complexities of GST regulations, Mr. Butchibabu and his team are committed to helping you navigate these changes smoothly. For personalized assistance with your GST filings, feel free to reach out. 

Changes in GST Effective from 1st September 2024

The Goods and Services Tax (GST) landscape in India is continually evolving to enhance compliance and streamline processes for taxpayers. Starting 1st September 2024, several key changes have been implemented that will impact taxpayers across different sectors. Here’s a detailed look at the significant updates:

1. Reporting of High-Value Supplies in GSTR-1
From 1st September 2024, any supply with a value exceeding Rs. 1 lakh must be reported in Table B2CL of the GSTR-1 form. This change aims to improve the accuracy of reporting high-value transactions and ensure that the tax authorities have better oversight of large transactions.

Key Points:

• Applicable to all taxpayers filing GSTR-1.
• High-value supplies exceeding Rs. 1 lakh must be reported under Table B2CL.
• This measure is expected to enhance transparency and improve tax compliance.

2. Negative Liability Reporting in GSTR-3B
Taxpayers now have the option to report negative liability in Table 3 of the GSTR-3B return. This change will allow taxpayers to offset negative liabilities automatically in the subsequent month’s return, streamlining the reconciliation process and reducing manual adjustments.

Benefits:

• Simplifies the return filing process by automatically adjusting negative liabilities.
• Reduces manual reconciliation errors and enhances accuracy.
• Ensures a smoother filing experience for taxpayers by automatically carrying forward negative values.

3. Blocking of GSTR-1 / IFF for Non-Validation of Bank Details
To maintain the integrity of GST compliance, taxpayers who have not added and validated their bank account details in their GST registration will have their GSTR-1 or Invoice Furnishing Facility (IFF) blocked. This measure emphasizes the importance of updating bank account details to maintain compliance and ensure the smooth filing of returns.

Important Points:

• Bank account validation is mandatory for all GST-registered taxpayers.
• Failure to validate bank details will result in the blocking of GSTR-1 / IFF.
• Taxpayers are advised to verify and update their bank details promptly to avoid disruption in return filing.

4. Activation of GSTR-9 and GSTR-9C on the GST Portal
The annual return (GSTR-9) and reconciliation statement (GSTR-9C) forms are now active on the GST portal. This enables taxpayers to file their annual returns and reconciliation statements for the financial year 2023-24.

Key Aspects:

• GSTR-9 is mandatory for taxpayers with an annual turnover of more than Rs. 2 crore.
• GSTR-9C is required for taxpayers whose turnover exceeds Rs. 5 crore and includes a reconciliation statement between the audited financial statements and the annual return.
• Both forms must be filed within the prescribed timelines to avoid penalties.

Conclusion
These changes reflect the government’s ongoing efforts to enhance compliance and streamline GST processes. Taxpayers should take note of these updates and ensure timely adjustments in their compliance procedures to avoid any disruptions. Regularly reviewing the GST portal and staying updated with such changes will help businesses manage their tax obligations effectively.

About the Expert:

Mr. Butchibabu, Chartered Accountant, is a renowned expert in GST compliance and tax advisory services. With years of experience guiding businesses through the complexities of GST regulations, Mr. Butchibabu and his team are committed to helping you navigate these changes smoothly. For personalized assistance with your GST filings, feel free to reach out. Stay compliant and keep your tax processes smooth!