Sep 222022
 

What Does Offboarding Mean?

HR pays much attention to onboarding and performance management, but less focus is on streamlining your offboarding procedure. Offboarding, however, is crucial for upholding your company’s reputation, improving the working conditions for your present staff, and retaining networking opportunities. 

Offboarding is the procedure that results in a formal breakup between a worker and a corporation via retirement, termination, or resignation. It includes every choice and action made during an employee’s departure. It may include:

  • Transferring the duties of that employee’s position using the employee database management system
  • Removing credentials and access rights with the help of HRM solutions
  • Delivering the equipment
  • Interviewing existing patrons to obtain comments

Additionally, you can learn from the process what you can do to make things better for your present and future employees.

exit interviews

What is the benefit of an exit interview?

1. It is cost-effective:- Exit interviews are unquestionably a great tool you can add to human resources because they don’t take up much time, cost little, and yield useful information. It’s also relatively simple to have a discussion or interview an employee to discuss the company’s strengths and flaws. It’s a tiny investment that will have a big payoff.

2. You will understand and come to know why people leave:- Finding out why people decide to quit your company will provide you with the information you need to address the problem. People will undoubtedly have different motivations; therefore, it’s essential to determine whether the company, management, or external factors are to blame. Possible reasons for the employee’s departure from their current position include receiving a job offer with a higher income elsewhere, failing to make the promised advancement, or having to deal with personal concerns. Knowing why someone departed will help you solve any problems and prevent them from happening again.

3. You will spot any issues with the company:- You want to grow your company if you’re considering holding an exit management process. People should want to work where you build it. Exit interviews provide the knowledge you need to increase employee retention and the working environment for employees. A lot of the inquiries made during a departure interview concern the workplace. Knowing how people under your management feel at work might be challenging.

4. Closure:- Exit interviews allow you to complete any outstanding business with a departing employee. You can talk to them about their reasons for leaving, their final salary, and any paperwork that needs to be finished by their last day, in addition to probing them about their decision. Additionally, it’s excellent if the company and employee can make amicably part ways. Even though an exit interview won’t tell you all you want to know, it’s a beautiful place to start understanding why people leave. Both existing and potential employees will have a better experience if you accept constructive comments and implement adjustments.

Components of a Successful Offboarding Program

  • Management Buy-In: The most crucial element of a successful offboarding program is a leadership team that is receptive to the suggestions for improvement and feedback the program will elicit. The knowledge gleaned from exit interviews will amount to little more than time and effort wasted without support from the management team. Companies should establish an executive committee to oversee their program’s creation, implementation, and outcomes to reap the above benefits.
  • Willingness to Change: A management’s desire to change and appreciation for employee feedback are indicated by their buy-in. Employees become disillusioned and start to think exit interviews are meaningless when they notice numerous coworkers leave for the same reasons, but nothing changes. Working for someone doesn’t thrill employees as much as working alongside them. An organization’s management team can develop collaboration and improve employee retention, morale, and performance by respecting and acting upon employee input.
  • Share the Feedback from Exit Interviews: To share the feedback from departure interviews, it’s critical to have a consistent protocol in place. The HR department should consolidate and analyze all the data they learn through exit interviews and then regularly meet with the right stakeholders to deliver this data, along with any change recommendations. Depending on how many exit interviews are conducted at any given time, this meeting’s frequency may change. A weekly or monthly feedback meeting may be helpful during high turnover. If not, quarterly gatherings might be sufficient.

Frequently Asked Questions(FAQs)

Q1. Why is an exit interview important?
A. When appropriately done, exit interviews can offer a steady stream of hr payroll software, insightful feedback, and insight on each of the three fronts. They can raise employee engagement and retention by outlining what functions well or poorly within the company.

Q2. Who should do exit interviews?
A. The most typical option is to delegate it to an internal HR representative. They ought to be familiar with your organization’s participants and its dynamics. This enables them to delve farther into problems and poses more direct queries.

Q3. What happens during the exit interview?
A. An employee may be questioned about their reasons for leaving, their opinion of the business, and any advice they may have for revision during an exit interview. The ideal foundation for the discussion is a well-structured questionnaire.

Sep 142022
 

Enhancing an organization’s workforce’s abilities involves training and development. It is a procedure that aids in raising worker output and effectiveness. A crucial component of any business is training. Employees not trained for their occupations can gain new abilities with the training. Depending on the needs of the employee or firm, an employee training program can be formal or informal.

 

What is Employee Training and Development?

Employee Training and Development provides employees with the skills and knowledge to perform their job effectively. It is also improving their competencies, capabilities, and performance.

Employee training and development is a process from recruitment to retirement. There are numerous different ways in which Organizations can implement Employee Training and Development. They can either train existing employees or hire new employees with the necessary skill set. Employee training and development are important for any company. They are essential for the growth of employees to make them more productive.

 

Need for training and development in an organization 

The need for training and development has been growing. It is a way to improve the skills and knowledge of current workers so they can become more productive.

The most popular method of employee development is training. Although there are many different ways to train, they all aim to expand a person’s knowledge and skills to increase production. An attendance tracking software is an excellent example of development in an Organisation.

What is the Importance of Training and Development?

An essential part of any firm is training and development. It aids in skill development and keeps staff members abreast of current developments in their industry.

The training introduces new hires to the organization’s culture, policies, and processes. Training initiatives give staff members a sense of community and offer them chances for personal development. Companies can use training initiatives to keep staff members interested in their work.

Here are 5 Benefits of Employee Training and Development:

1. Improved Employee Performance

Training is an essential factor in improving employee performance. It can be a part of the employee’s onboarding process and ongoing development. Performance monitoring tools help employees with the knowledge and skills they need to succeed in their new roles.

2. Improved Employee Morale

Training can also lead to improved employee morale. Employees are more likely to feel like they are part of a team when they know that their company cares about them enough to invest in their growth. Training can also help employees retain information better because it helps them understand how their role fits into the company.

3. Reduced Turnover

Employee turnover is one of the many serious obstacles that businesses face. It costs an organization a lot in terms of time and money to recruit, hire, and train new employees. Some employees may be unsatisfied with their work, or they may feel like they are not being paid well enough for the work that they do. Training and development promote a worker’s commitment to the company, which lowers the turnover rate.

4. Increased Productivity

Employees are the backbone of any organization. They are the ones who provide the productivity and output that are needed to keep a company running. Financing in their training and development is essential to increasing productivity. Employee database management software can aid in boosting productivity.

5. Enhanced Customer Experience

The “customer experience” refers to how a consumer views and feels about their dealings with your business. Culminating client encounters with business, including their use of your products or services, their dealings with staff members, and their perception of your brand. Research shows that training and development improve customer experience.

 

Frequently Asked Question (FAQ)

Q1. What is the need for training in HRM?

A. Training improves staff morale by fostering a positive attitude, job satisfaction, and better learning. As people grow in dedication, the organization gains loyalty.

Q2. Why employee training and development is necessary?

A. Training and development help companies gain and retain top talent, increase job satisfaction and morale, improve productivity and earn more profit.

Q3. What does employee training mean?

A. The term “employee training” refers to a set of systematic procedures for teaching employees in a way that improves the work abilities necessary for organizational growth. These skills could be technical, managerial, or professional. Keep in mind that learning and development are not the same as staff training (L&D).

Jan 152022
 

Given the initial signs of a surge in cases of COVID-19, the matter regulating attendance of Central Government employees has been reviewed and it has been decided as under. with immediate effect till 31st January 2022:-

(i) Physical attendance of Government servants below the level of Under Secretary shall be restricted to 50% of the actual strength and the remaining 50% shall work from home. A roster may be prepared accordingly by all the Departments concerned.

(ii) All officers of the level of Under Secretary & above are to attend office on regular basis.

(iii) Persons with Disabilities and Pregnant women employees shall be exempted from attending office but are required to work from home.

(iv) The officers I staff shall follow staggered timings, to avoid over-crowding in offices, as indicated
below:
(a) 9.00 AM. to 5.30. P.M.
{b) 10.00 AM. to 6.30 P.M.

(v) All officers/ staff residing in the containment zone shall be exempted from coming to offices till the containment zone is denotified Those officers/ staff who are not attending office and working from home shall be available on the telephone and other electronic means of communication at all times.

(vii) Meeting, as far as possible, shall be conducted on video-conferencing and personal meetings with visitors, unless necessary in the public interest, are to be avoided.

(viii) All Officers/Staff have to ensure strict compliance with covid-appropriate behavior viz. frequent washing of hands/ sanitization, wearing a mask/ face cover, observing social distancing at all times.

(ix) Proper cleaning and frequent sanitization of the workplace, particularly of the frequently touched surfaces may be ensured. HoDs may also ensure non• crowding in corridors, canteens, etc.

2. All Ministries/ Departments I Offices as well as the Central Government employees are directed to ensure strict compliance of instructions on COVID• appropriate behavior issued by MHA, MoH&FW, and DoP&T from time to time

Circular:-
EPFO_Covid_Attendance_Circular_11-Jan-2022 – DOWNLOAD

 

SOURCES BY: PRAKASH CONSULTANCY SERVICES

 Posted by at 12:27 PM  Comments Off on EPFO Circular in order to take preventive measures not to spread of Novel Coronavirus (COVID-19):- Attendance of Central Government officials
Sep 032019
 

Due dates for the Month of September 2019
7th
Income Tax
– TDS Payment for August
10th
GST
– Return for authorities deducting tax at source – GSTR 7 for August
– Details of supplies effected through e-commerce operator and the amount of tax collected –
GSTR 8 for August.
11th
GST
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for August
13th
GST
– Return for Input Service Distributor – GSTR 6 for August
15th
Income Tax
– Advance Income Tax for all assessees

Providend Fund
– PF Payment for August
ESIC
– ESIC Payment for August

20th
GST
– Monthly return on the basis of finalisation of details of outward supplies and inward supplies along with the payment of amount of tax – GSTR 3B for August
– Return for Non-Resident foreign taxable person – GSTR 5 for August
28th
GST
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSTR 11 for August
30th
Income Tax
– Return of Income for others covered under Audit and Companies but other than covered under Transfer Pricing Regulations.
30th
Profession Tax
– Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)
Sensys Technologies Pvt. Ltd.
HO: 904, 905 & 906, Corporate Annexe, Sonawala Road, Goregaon East, Mumbai- 400 063.
Tel.: 022-6820 6100| Call: 09769468105 / 09867307971
Email: enquiry@sensysindia.com | Website: http://www.sensysindia.com
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Ahmedabad | Chennai | Kolkata
Visit our BLOG for latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT etc.. Click here to visit Sensys BLOG
Aug 062019
 

MSME Concepts

Meaning and definitions:

The Micro Small and Medium Enterprises have been defined under MSME Act, 2006. According to the Act, MSME have been broadly classified in two categories:

  1. Enterprises engaged in the manufacturing and production of goods pertaining to any industry;
  2. Enterprises engaged in providing or rendering services

(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and Regulation) Act, 1951 and are defined in terms of investment in Plant & Machinery.

(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

Sector Micro Small Medium
Manufacturing <= Rs 25 lacs <= Rs 5 Crore <= Rs 10 Crore
Service <= Rs 10 Lacs <= Rs 2 Crore <= Rs 5 Crore

Cost which are included from calculation of cost of plant and machinery:

  1. Equipment such as tools, jigs, dyes, moulds and spare parts for maintenance and the cost of consumables stores;
  2. Installation of plant and machinery;
  • Research and development equipment and pollution controlled equipment
  1. Power generation set and extra transformer installed by the enterprise as per regulations of the State Electricity Board;
  2. Bank charges and service charges paid to the NSIC or the SSIC;
  3. Procurement or installation of cables, wiring, bus bars, electrical control panels (not mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant and machinery or for safety measures;
  • Gas producer plants;
  • Transportation charges (excluding sales-tax or value added tax and excise duty) for indigenous machinery from the place of their manufacture to the site of the enterprise;
  1. Charges paid for technical know-how for erection of plant and machinery;
  2. Such storage tanks which store raw material and finished products and are not linked with the manufacturing process; and
  3. Firefighting equipment.

Objective Udyog Aadhar Memorandum (UAM):

The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services. The objectives of registration are as follows:

  1. To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted.
  2. To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection.
  3. To serve the purpose of collection of statistics.
  4. To create nodal centres at the Centre, State and District levels to promote SSI.

The other benefit available for MSME registration are as below:

  • Easy finance availability from Banks, without collateral requirement
  • Protection against delay in payment from Buyers and right of interest on delayed payment
  • Preference in procuring Government tenders
  • Stamp duty and Octroi benefits
  • Concession in electricity bills
  • Reservation policies to manufacturing / production sector enterprises
  • Time-bound resolution of disputes with Buyers through conciliation and arbitration
  • Reimbursement of ISO Certification Expenses
  • Credit prescription (Priority sector lending), differential rates of interest etc.
  • Excise Exemption Scheme
  • Exemption under Direct Tax Laws.
  • Financial Assistance for setting up testing facilities through NSIC
  • Statutory support such as reservation and the Interest on Delayed Payments Act.
  • Subsidy on ISO Certifications
  • Subsidy on NSIC Performance and Credit ratings
  • Participation in Government Purchase registrations
  • Registration with NSIC
  • Counter Guarantee from Government of India through CGSTI
  • Waiver in Earnest Money (Security Deposit ) in Government tenders
  • Stamp duty and Octroi benefits,
  • Weightage in price Preference.
  • Reduction in rate of Interest from banks (Subject to ratings)
  • Free of Cost Government tenders
Feb 052019
 

Tax proposal in Budget 2019

  1. Existing rates of income tax will continue for FY 2019-20. Thus, it is important to note that slab rate for taxing income remains intact.

Thus, slab rates for financial year 2019 -20 will be summarized as below:

Income tax slab Individual Tax Payers (Less Than 60 Years Old) & HUF Senior Citizens (60 Years Old Or More but Less than 80 Years Old) Super Senior Citizens(80 Years Old Or More)

 

Up to Rs 250,000/- NIL NIL NIL
Next up to Rs 300,000/- 5% NIL NIL
Next up to Rs 500,000/- Rs 2,500/- + 5% 5% NIL
Next up to Rs 10,00,000/- Rs 12,500/- + 20% Rs 10,000 + 20% 20%
More than Rs 10,00,000/- Rs 1,12,500/- + 30% Rs 110,000/- + 30% Rs 100,000 + 30%
  • On the above cesses @ 4% and surcharge at the rates as may be applicable are extra.

The above rates are also applicable for salaried class individuals for deducting income from their salary for financial year 2019-20.

  1. Individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate.

Impact of above proposal:

As a result, even persons having gross income up to Rs 6.50 lakhs may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance etc. (No tax is payable on initial income of Rs 250,000 + Deduction under section 80C can be claimed up to Rs 150,000 + Rebate on income tax payable on further income of Rs 250,000 can be claimed for income earned in FY 2019-20.)

In fact, with additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income will not have to pay any tax.

Effect of above amendment:

Now in financial year 2019-20 individuals earning up to Rs 650,000/- are no longer needs to pay tax if they invest Rs 150,000/- in eligible investments as mentioned under section 80C.

However, in case individual is earning anything more than Rs. 650,000/- then he needs to pay tax at normal rates as per slab rates applicable to him as mentioned in point no 1 above.

It is worth to note here that for financial year 2019-20 the amount of rebate is increased and slab rates are kept intact. Thus, income tax will be computed normally as per slab rates applicable to individuals first and thereafter rebate in computed for those whose taxable income (Gross income minus Deduction allowable w.r.t. investments) is less than Rs 500,000/-.

The above rule may be explained in below cases:

Case No Taxable total income Tax payable
1 Rs 500,000/- NIL
2 Rs 500,100/- Rs 12,500/- + 4% Cess
  1. In case of salaried persons standard deduction is raised from Rs 40,000 to Rs 50,000

This effect of this amendment is that in case of all salaried class individual from financial year 2019-20 onwards an additional deduction of Rs 50,000/- in computing income from salary income.

  1. Now income tax will be not levied under the head “Income from House Property” in case of an individual is having 2 self occupied houses.

Impact of above amendment is that now onwards from financial year an individual can claim two of his properties as self occupied and may claim his assumed rental income as NIL or even negative in can a running loan is there on that property. This loss can be set off against the income from salary also.

  1. TDS deduction limit on interest earned on bank / post office deposits is being raised from existing Rs 10,000 to Rs 40,000. Thus, in FY 2019-20 no TDS will be deducted by bank or post office on interest earned by depositors for interest income up to Rs 40,000/-

It was observed that in large number of cases retired individuals have to file their return of income as their annual interest income on deposits are high to get refund of TDS deducted on their interest income with no other income. Now this amendment is being made to relief compliance burden from such individuals.

  1. TDS deduction limit on rental income is to be increased from existing Rs 1,80,000 to Rs 2,40,000. Thus, TDS on rental income up to Rs 2,40,000/- is TDS free now for FY 2019-20.
  2. Rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to Rs 2 crore.
  3. For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March, 2020.
  4. It is proposed to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed.
Dec 242018
 

TDS procedure under GST

Legal background:

NN 50/2018 read as follows:

In exercise of the powers conferred by section 1(3) of the CGST and in supercession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 33/2017-Central Tax, dated the 15th September, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1163 (E), dated the 15th September, 2017, except as respects things done or omitted to be done before such supersession, the Central Government hereby appoints the 1 st day of October, 2018, as the date on which the provisions of section 51 of the said Act shall come into force with respect to persons specified under clauses (a), (b) and (c) of sub-section (1) of section 51 of the said Act and the persons specified below under clause (d) of sub-section (1) of section 51 of the said Act, namely:-

  1. an authority or a board or any other body, – (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with fifty-one per cent. or more participation by way of equity or control, to carry out any function;
  2. Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);
  3. public sector undertakings.

GST – TDS compliance in essence:

  • Recognize transaction on which TDS is to be deducted
  • Undertake TDS deduction under GST,
  • File GST-TDS returns,
  • Issue GST-TDS certificates and
  • Take-up all other entailing compliances

GST – TDS recognition provision:

Who will Deduct TDS:

a)           a department or establishment of the Central Government or State Government; or

b)          local authority; or

c)           Governmental agencies; or

d)          such persons or category of persons as may be notified by the Government on the recommendations of the Council.

The Central Government vide Notification No. 33/ 2017-Central Tax, dated 15th September, 2017 notified the persons under clause (d) of section 51(1) namely: –

(i)           an authority or a board or any other body, –

(a)   set up by an Act of Parliament or a State Legislature; or

(b)  established by any Government,

with 51% or more participation by way of equity or control, to carry out any function;

(ii)         society established by  the  Central  Government  or  the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);

(iii)       public sector undertakings;

Transaction on which GST – TDS will be deducted:

GST TDS will be deducted in case contract value > Rs 250,000/-

Applicable rate of GST-TDS deduction:

Nature of Supply Rate of TDS
Intra-State supply (1% CGST + 1% SGST)
Inter-State supply 2% (IGST)

Practical issues:

Issues Solutions
Whether for the purpose of TDS deduction:

1.     Value of the whole contract is to be considered or

2.     Individual invoices even if each such invoice is raised for < Rs. 2,50,000/-

Value of the whole contract for the supply of goods or services has to be considered.
What is included in term “Value” to consider whether contact is liable for TDS deduction or not? Value of supplies excluding CGST/ SGST/ UTGST/ IGST and cess.
Whether GST – TDS shall be deducted on retention amount? GST-TDS has to be deducted on the value including any retention monies withheld.
Whether GST – TDS forms part of cash ledger of deductee? Yes. However same is being route through Part C of FORM GSTR – 2A.
GST – TDS deducted on accrual basis? Either at the time of payment or credit to the account of deductee which ever is earlier.

Dec 042018
 

GST paid under wrong heads – IGST instead of CGST / SGST

Relevant provision of GST laws:

IGST Act

CGST / SGST / UTGST

Section 19 (1) A registered person who has paid integrated tax on a supply considered by him to be an inter-State supply,

–  but which is subsequently held to be an intra-State supply,

shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed.

(2) A registered person who has paid central tax and State tax or Union territory tax, as the case may be, on a transaction considered by him to be an intra-State supply,

–  but which is subsequently held to be an inter-State supply,

shall not be required to pay any interest on the amount of integrated tax payable.

Section 77. (1) A registered person who has paid the Central tax and State tax or, as the case may be, the Central tax and the Union territory tax on a transaction considered by him to be an intra-State supply,

–  but which is subsequently held to be an inter-State supply,

shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.

(2) A registered person who has paid integrated tax on a transaction considered by him to be an inter-State supply,

–  but which is subsequently held to be an intra-State supply,

shall not be required to pay any interest on the amount of central tax and State tax or, as the case may be, the Central tax and the Union territory tax payable.

Implications of Section 77 of the CGST Act read with Section 19 of the IGST Act

It is possible for taxable person to come across situations where he has paid the wrong nature of tax viz, CGST and SGST / UTGST in lieu of IGST and vice versa. Therefore, such incorrect payment of tax, if any, should be identified and ought to be considered appropriately.

A plain reading of Section 77 of CGST Act and Section 19 of IGST Act, 2017 (which are pari- material as reproduced above), a reasonable inference can be drawn that the provisions of the said sections shall apply only in a situation where an adjudicating authority holds an interstate transaction as intra-state transaction or visa versa.

A situation where parties themselves decides that wrong tax has been charged and paid would not fall within these two provisions, whereas the effect of it must be given through table 9A of GSTR 1 read with GSTR 3B.

Section 77 of the CGST Act provides for the adjustment of taxes paid incorrectly. Where a registered person has considered a transaction to be an intra-State supply and paid CGST and SGST/UTGST, but it is subsequently held to be an inter-State supply and IGST is liable to be paid, the registered person, is required to pay IGST on such transaction. The registered person is entitled to claim refund of CGST and SGST/UTGST paid on the transaction.

In such situations interest is not payable by virtue of Section 77(2) of the CGST Act and 19(2) of the IGST Act, 2017.

Similarly, where the registered person has considered a transaction to be an inter- State supply and paid CGST and SGST/UTGST, but it is subsequently held to be an intra-State supply and CGST and SGST/UTGST is liable to be paid, the registered person is required to pay the applicable CGST and SGST/UTGST on such transaction.

In this situation also, it is to be noted that interest is not liable to be paid when the correct tax is paid.

Nov 202018
 

Who is auditor under GST?

Requirements as to audit under GST:

By provisions of Section 35(5) read with Section 44(2) and other related provision, it indicates that appointments of auditors are subject to conditions and limitations that are specified / prescribed. On an understanding and analysis of these provisions the following facts emerge:

  • Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited:
    • by a Chartered Accountant; or
    • by a Cost Accountant.
  • The registered person is required to submit electronically a copy of the:
    • Audited annual accounts;
    • Annual return in the prescribed GSTR 9 (refer Appendix 2 for GSTR 9);
    • Reconciliation statement, duly certified, reconciling the value of supplies declared in the return furnished for the financial year along with the audited financial statement in GSTR 9C (refer Appendix 3 for GSTR 9C); and
    • Such other particulars as prescribed; on or before the 31st day of December following the end of the financial year.
  • Such documents are to be submitted electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner

Restrictions on appointment of auditor:

Relative or employee of the registered person:

The GST Laws do not prohibit a relative or an employee of the registered person being appointed as an auditor under Section 35(5) read with Section 44(2) of the CGST Act and the corresponding Rule 80(3) of the CGST Rules.

It may, however, be noted that as per Code of Conduct under clause (4) of Part I of Second Schedule, a chartered accountant who is in the employment of a concern or in any other concern under the same management cannot be appointed as auditor of that concern.

Further, as per the decision of the Council, a member who is not in full time practice cannot carry out attest function on and after the 1st of April 2005.

Therefore, an employee of the registered person or an employee of a concern under the same management cannot audit the accounts of the registered person under Section 35(5) read with Section 44(2) of the CGST Act and the corresponding Rule 80(3) of the CGST Rules.

Disclosure of interest of CAs with entity:

It may also be noted that under the Second Schedule to the Chartered Accountants Act, if a member furnishes / gives an audit report in the case of a concern in which he and / or his relatives have substantial interest, it will be necessary for him to disclose his interest in the audit report. This is equally applicable to audit under section 35(5) read with Section 44(2) of the CGST Act and the corresponding Rule 80(3) of the CGST Rules.

Internal auditor can not be a GST auditor:

An announcement is made on 28th September 2018 clarifying that the council of the Institute of Chartered Accountants of India, in its 378th meeting clarified that “an Internal Auditor of an entity cannot undertake GST Audit of the same entity.

Audit fees:

The turnover (aggregate turnover) of a registered person, quantum of tax paid, refunds envisaged etc., cannot be a basis for fee to be charged. Fees cannot be fixed, based on the percentage of trading profits or any such method.

 

Nov 172018
 

Detailed analysis of credit notes and debit notes under GST

Meaning of terms Financial credit notes:

A taxable person may issue a credit note reducing the value of original supply without tax attributable to the reduction claimed. Such credit notes are referred as ‘financial credit notes’.

When financial credit note is issued by a supplier, it would adjust turnover of the original supply and hence the revenue recorded in the books of accounts. However, such credit note would not be declared in the returns under the GST law.

Introduction to Credit Note and debit notes under GST:

In terms of Section 34 of the CGST / SGST Act, 2017 the supplier of goods and / or services is permitted to issue credit notes and debit notes in very specific situations which is summarized in the following manner:

Credit notes Debit notes
taxable value or tax charged in the tax invoice is found to exceed the taxable value or tax payable.  taxable value or tax charged in the tax invoice is found to be less than the taxable value or tax payable.

 

 

Goods supplied are returned by the recipient.
Goods and / or services or both supplied are found to be deficient.
Pre-agreed discount given after issue of invoice subject to conditions.

Situations where credit note can be issued:

  1. Reducing taxable value or tax payable on an earlier supply.
  2. Reducing the taxable value without affecting the tax involved in the amount of such reduction, i.e., financial credit notes
  3. Verify the fact that whether credit notes issued are correctly reported in GSTR 1, it would leave a trail for verification and compliance in due course.

Impact of financial credit notes in annual returns:

There would be difference in revenue as per the audited annual financial statements and the turnover reckoned for purpose of GST returns.

The value of such credit notes should be declared against Pt. II Sl. No. 5J as ‘credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST’.

This Pt.5J goes to increase the revenues as appearing in the audited financial statements (minus of a negative value would be a plus).

It is concluded from the above that credits notes not admissible under GST will attract incidence of GST. And for this reason, it is not advisable to issue such credit notes that omit to adjust the tax involved in the reduction sought to be made to the  value of original supply.

Impact of GST credit notes on Annual return:

The credit notes issued under the provisions of Section 34 viz., mentioning the value of taxable value and the tax payable thereon as well is not required to be declared in the reconciliation statement in Form GSTR – GSTR 9C  for the reason that such credit note would have already been declared in the monthly returns / annual returns.

Situations under which the financial credit notes are issued:

  • Discounts offered post supply: The discount issued by the supplier after effecting supply of goods and / or services if not in terms of the provisions as specified under Section 15(3) of the CGST / SGST Act, 2017, the supplier cannot claim the reduction in the output tax
  • Credit notes issued in relation to exempt supplies, zero-rated supplies and non-GST outward supplies Credit notes issued for claiming reduction in the taxable value shall be declared against Pt. II No. 5J of Form– GSTR 9C.
  • Credit notes issued after expiry of the time limit specified under the GST law: In terms of Section 34 of the CGST / SGST Act, 2017, a supplier cannot issue a credit note any time after either of the following 2 events:
    • Annual return has been filed for the FY in which the original tax invoice was issued; or
    • September of the FY immediately succeeding the FY in which the original tax invoice was issued (i.e., for a tax invoice issued in April 2018 as well as a tax invoice issued in March 2019, the relevant credit notes cannot be issued after September 2019;

Compliances and treatment of financial credit notes: The financial credit notes issued by a taxable person should not be declared either in the monthly returns filed in Form GSTR 3B or outward supply statement filed in Form GSTR – 1 since, it does not involve adjustment of output tax payable. This infers that the financial credit notes would also not be declared in the annual return filed in Form GSTR – 9.  In as much as the reconciliation statement in Form GSTR 9C is concerned such financial credit notes may be required to be declared for the reason that the value of credit notes are given effect in the revenue of the audited annual financial statements. Therefore, such credit notes whether issued in terms of Section 34 or otherwise, should be declared against  Pt. II of Sl. No. 5J of the Form GSTR 9C.