Decoding of New Rule 36(4) of CGST Rules, 2017, Restriction in Availment of Input Tax Credit (ITC)

Clarification regarding New Rule 36(4) of CGST Rules, 2017, Restriction in Availment of  Input Tax Credit (ITC)

Circular No. 123/42/2019– GST, Dt. 11 Nov 2019

This being a new provision, the restriction is not imposed through the common portal and it is the responsibility of the taxpayer that credit is availed in terms of the said rule and therefore, the availment of restricted credit in terms of sub-rule (4) of rule 36 of CGST Rules shall be done on self-assessment basis by the tax payers.

Various issues relating to implementation of the said sub-rule and the clarification on each of these points is as under: –

Issue No. 1

What are the invoices / debit notes on which the restriction under rule 36(4) of the CGST Rules shall apply?

The restriction of availment of ITC is imposed only in respect of those invoices / debit notes, details of which are required to be uploaded by the suppliers under sub-section (1) of section 37 and which have not been uploaded.

Therefore, taxpayers may avail full ITC in respect of IGST paid on import, documents issued under RCM, credit received from ISD etc. which are outside the ambit of sub-section (1) of section 37, provided that eligibility conditions for availment of ITC are met in respect of the same.

The restriction of 36(4) will be applicable only on the invoices / debit notes on which credit is availed after 09.10.2019.

Issue No. 2

Whether the said restriction is to be calculated supplier wise or on consolidated basis?

The restriction imposed is not supplier wise. The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers. Further, the calculation would be based on only those invoices which are otherwise eligible for ITC.

Accordingly, those invoices on which ITC is not available under any of the provision (say under sub-section (5) of section 17) would not be considered for calculating 20 per cent. of the eligible credit available.

Issue No. 3

FORM GSTR-2A being a dynamic document, what would be the amount of input tax credit that is admissible to the taxpayers for a particular tax period in respect of invoices / debit notes whose details have not been uploaded by the suppliers?

The amount of input tax credit in respect of the invoices / debit notes whose details have not been uploaded by the suppliers shall not exceed 20% of the eligible input tax credit available to the recipient in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub- section (1) of section 37 as on the due date of filing of the returns in FORM GSTR-1 of the suppliers for the said tax period.

The taxpayer may have to ascertain the same from his auto populated FORM GSTR 2A as available on the due date of filing of FORM GSTR-1 under sub-section (1) of section 37.

Issue No. 4

How much ITC a registered tax payer can avail in his FORM GSTR-3B in a month in case the details of some of the invoices have not been uploaded by the suppliers under subsection (1) of section 37.

Sub-rule (4) of rule 36 prescribes that the ITC to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under subsection (1) of section 37, shall not exceed 20 per cent. Of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under subsection (1) of section 37.

The eligible ITC that can be availed is explained by way of illustrations, in a tabulated form, below.

In the illustrations, say a taxpayer “R” receives 100 invoices (for inward supply of goods or services) involving ITC of Rs. 10 lakhs, from various suppliers during the month of Oct, 2019 and has to claim ITC in his FORM GSTR-3B of October, to be filed by 20th Nov, 2019.

Case	Details of suppliers’ invoices for which recipient is eligible to take ITC	20% of eligible credit where invoices are uploaded	Eligible ITC to be taken in GSTR-3B to be filed by 20th Nov.
I	Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 6 lakhs as on the due date	Rs.1,20,000/-	Rs. 6,00,000 (i.e. amount of eligible ITC available, as per details uploaded by the suppliers) + Rs.1,20,000 (i.e. 20% of amount of eligible ITC available, as per details uploaded by the suppliers) = Rs. 7,20,000/-
II	Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 7 lakhs as on the due date	Rs.1,40,000/-	Rs 7,00,000 + Rs. 1,40,000 = Rs. 8,40,000/-
III	Suppliers have furnished in FORM GSTR-1 75 invoices having ITC of Rs. 8.5 lakhs as on the due date	Rs. 1,70,000/-	Rs. 8,50,000/- + Rs.1,50,000/-* = Rs. 10,00,000 * The additional amount of ITC availed shall be limited to ensure that the total ITC availed does not exceed the total eligible ITC.

Issue No. 5

When can balance ITC be claimed in case availment of ITC is restricted as per the provisions of rule 36(4)?

The balance ITC may be claimed by the taxpayer in any of the succeeding months provided details of requisite invoices are uploaded by the suppliers. He can claim proportionate ITC as and when details of some invoices are uploaded by the suppliers provided that credit on invoices, the details of which are not uploaded (under sub-section (1) of section 37) remains under 20 per cent of the eligible input tax credit, the details of which are uploaded by the suppliers.

Full ITC of balance amount may be availed, in present illustration by “R”, in case total ITC pertaining to invoices the details of which have been uploaded reaches Rs. 8.3 lakhs (Rs 10 lakhs /1.20). In other words, taxpayer may avail full ITC in respect of a tax period, as and when the invoices are uploaded by the suppliers to the extent Eligible ITC/ 1.2. The same is explained for Case No. 1 and 2 of the illustrations provided at Sl. No. 4 above as under:

Case-I	“R” may avail balance ITC of Rs. 2.8 lakhs in case suppliers upload details of some of the invoices for the tax period involving ITC of Rs. 2.3 lakhs out of invoices involving ITC of Rs. 4 lakhs details of which had not been uploaded by the suppliers. [Rs. 6 lakhs + Rs. 2.3 lakhs = Rs. 8.3 lakhs]
Case-II	“R” may avail balance ITC of Rs. 1.6 lakhs in case suppliers upload details of some of the invoices involving ITC of Rs. 1.3 lakhs out of outstanding invoices involving Rs. 3 lakhs. [Rs. 7 lakhs + Rs. 1.3 lakhs = Rs. 8.3 lakhs]

Issues not clarified

This circular has failed to address the situation where suppliers have opted for quarterly filing of GSTR-1 while the recipient files monthly GSTR-1. This will create hardship for small taxpayers as recipients would try to get supplies from the dealers (big dealers) who opt for monthly filing of GSTR-1.  

Impact of 20% Rule

Restriction imposed in Rule 36(4) will certainly impact working capital of taxpayers as they have to pay more taxes when suppliers file belated returns in Form GSTR-1. Moreover, the taxpayer would not be able to claim refund of excess tax paid by them due to default of the suppliers. Also, this reconciliation exercise of ITC is going to consume lot of man hours every month.

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Budget 2019 Highlights: Union Budget Highlights

The budget has been presented with a 10-year vision in mind. The startups are being given a whole set of tax benefits.

-The budget is for a New India has a roadmap to transform the agriculture sector of the country, this budget is one of hope, says Narendra Modi

-Fully automated GST Refund module shall be implemented; multiple tax ledgers to be replaced by one; invoice details to be captured in a central system

-Basic customs duty on certain items to be increased to promote the cherished goal of Makein India. Import of defence equipment not manufactured in India are being exempted from basic customs duty.

-The government today increased customs duty on Gold. According to the Budget proposals, import duty to be hiked on gold and precious metals to 12.5%, from current level of 10%.

-I propose to increase special additional excise duty and road and infrastructure cess each one by 1 rupee a litre on petrol and diesel.

-Nirmala Sitharaman kept the Income tax slab Rates unchanged but announced a slew of new income tax proposals

-To provide further impetus to affordable housing, additional deduction of 1.5 lakh rupees on interest paid on loans borrowed upto 31 March 2020 for purchase of house up to ₹45 lakh.

-Additional income tax deduction of 1.5 lakh rupees on the interest paid on the loans taken to purchase Electric Vehicles.

-To discourage the practice of making business payments in cash, the government proposes to levy TDS of 2% on cash withdrawal exceeding ₹1 crore in a year from a bank account.

- PAN and Aadhaar  now interchangeable: More than 120 crore Indians now have Aadhar card, therefore for ease of tax payers I propose to make PAN card and Aadhar card interchangeable and allow those who don't have PAN to file returns by simply quoting Aadhar number and use it wherever they require to use PAN.

-Public sector banks to be provided 70,000 crore rupees to boost capital and improve credit.

-For purchase of high-rated pooled assets of financially sound Non Banking Finance Companies amounting to 1 lakh crore rupees during 2019-20, one-time six-month partial credit guarantee to be given to public sector banks (PSBs).

-India's sovereign external debt to GDP is among the lowest globally at less than 5%. Govt will start raising a part of its gross borrowing program in external markets in external currencies.

-A new series of coins of Re 1, ₹2, ₹5, ₹10, ₹20 easily identifiable to the visually impaired were released by the PM on 7th March 2019. These coins will be made available for public use shortly.

-Four new embassies to be opened in 2019-20, to improve footprint of India's overseas presence and to provide better public services to local Indian communities.

-Regulation authority over housing finance sector to be returned from National Housing Bank to RBI.

-To further encourage women entrepreneurship, Women Self Help Group(SHG) Interest Subvention Programme to be expanded to all districts in India.

-Non-performing asset(NPAs) recovery of ₹4 lakh crore over the last four years, NPAs down by ₹1 lakh crore in the last one year.

-To popularise sports at all levels, National Sports Education Board for development of sportspersons to be set up under Khelo India.

-Exclusive TV programme exclusively for startups to be started, channel will be designed and executed by startups themselves.

-I propose to consider issuing Aadhar card for Non Resident Indians (NRIs) with Indian passports after their arrival in India without waiting for the mandatory 180 days

-New National Educational Policy to be brought in to transform Indian educational system; major changes in higher as well as school system to be brought in.

-India will be made open defecation free on 2 October 2019, as per the dream of Prime Minister Narendra Modi.

-Jal Shakti Ministry will look at the mgmt of our water resources and water supply in an integrated and holistic manner and will work with states to ensure 'Har Ghar Jal', to all rural households by 2024 under 'Jal Jeevan Mission'.

-The government will invest widely in agricultural infrastructure and support private entrepreneurship in driving value addition to farmers produce and those from allied activities too, like bamboo, timber and also for generating renewable energy.

-9.6 crore toilets have been constructed since 2 October 2014. More than 5.6 lakh villages have become open defecation free. I propose to expand the Swachh Bharat mission to undertake sustainable solid waste management in every village.

-The government will bring out a policy framework for making India a global hub of aircraft financing and leasing activities. The idea is to encourage new industries to come up, leveraging India’s existing capabilities that will add more quality jobs.

-India has emerged as a major space power. To harness India's space ability commercially, a public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap the benefits of ISRO

-Every rural family, except those who are unwilling to take the connection will have electricity and clean cooking gas.

-In the second phase of PMAY, 1.95 crore houses are proposed to the beneficiaries.

-It is the right time to consider increasing minimum public shareholding in the listed companies, I have asked market regulator Sebi to consider raising the current threshold of 25% to 35%.

-Government will invite suggestions for further opening up of FDI in aviation sector, media, animation AVGC and insurance sectors in consultation with all stakeholders. 100% FDI will be permitted for insurance intermediaries.

-Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with specific focus on infrastructure sector to be put in place.

-Pension benefit to be extended to around 3 crore retail traders and shopkeepers with an annual turnover less than ₹1.5 crore under Pradhan Mantri Karam Yogi Man Dhan Scheme.

-Comprehensive restructuring of National Highways Programme will be done, to ensure the creation of National Highways Grid of desirable capacity.

Railway infrastructure would need an investment of 50 lakh crores between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services.

-Current rental laws are archaic. A modern tenancy law would be finanlised and forwarded to states

-Schemes such as 'Bharatmala', 'Sagarmala' and UDAN are bridging the rural and urban divide, improving our transport infrastructure.

-India Inc, our job creators, are the nation's wealth creators; together, we can prosper. I wish to propose no. of reforms to kickstart virtuous cycle of growth.

-The Indian economy will grow to become a  $3 trillion economy in the current year itself. It is now the sixth largest in the world. 5 years ago it was at the 11th position.

-Average amount spent on food security per year approximately doubled during 2014-19 compared to preceding five years.

-Vision for the decade: From 1.85 trillion dollars in 2014, the economy has reached 2.7 trillion US dollars withing five years. We are well within capacity to reach $5 trillion economy in next few years.

Analysis of clarifications on filing of Annual Return (FORM GSTR-9)

The due date for filing of Form GSTR 9 is 30th June 2019. Mean while the government has issued certain clarifications vide press release dated 03.06.2019.  The press release is like an “oxymoron” where some clarifications adding to the confusion. However it may be noted that press release is not any legal document. Given below is a brief comment on the various clarifications issued.

S.No.	Clarification	Comment
a	Information contained in FORM GSTR-2A as on 01.05.2019 shall be auto-populated in Table 8A of FORM GSTR-9.	The GSTR 2A downloaded from the portal is not matching with the auto-populated in Table 8A. This has been a concern in many of the cases, making businesses ponder upon what the programming of the GSTIN portal is. Now it is clarified that the data as reflecting as on 01.05.2019 shall be auto populated. It would have been better if the data is updated and auto-populated on real time basis. Given that only 25 days are left for the due date, it is an issue to be addressed at the earliest.
b	Input tax credit on inward supplies shall be declared from April 2018 to March 2019 in Table 8C of FORM GSTR-9.	The last date for availing input tax credit is September of the following year or filing of annual return whichever is earlier.  This time limit was extended to March 2019 by issue of Removal of difficulty order. However the heading of Table 8C  is “ITC of F.Y. 17-18 but availed in April 18 to Sep 18. Therefore clarification is issued that, in Table 8C, details from April 18 to Mar 19 is to be given. However no notification is issued.
c	Particulars of the transactions for FY 2017-18 declared in returns between April 2018 to March 2019 shall be declared in Pt. V of FORM GSTR-9. Such particulars may contain details of amendments furnished in Table 10 and Table 11 of FORM GSTR-1.	The last date for making any corrections or amendments in the GST returns is September of the following year or filing of annual return whichever is earlier.  This time limit was extended to March 2019 by issue of Removal of difficulty order. However the Part V still required details of April 18 to Sep 18. Therefore clarification is issued that, in Part V details from April 18 to March 19 is to be given. However no notification is issued.
d	It may be noted that irrespective of when the supply was declared in FORM GSTR-1, the principle of declaring a supply in Pt. II or Pt. V is essentially driven by when was tax paid through FORM GSTR-3B in respect of such supplies. If the tax on such supply was paid through FORM GSTR-3B between July 2017 to March 2018 then such supply shall be declared in Pt. II and if the tax was paid through FORM GSTR- 3B between April 2018 to March 2019 then such supply shall be declared in Pt. V of FORM GSTR-9.	In case of mismatch in GSTR 3B and GSTR 1, GSTR 3B shall prevail. Supplies declared in July to March 18 in GSTR 3B shall be declared in Part II and Supplies declared in April 18 to March 19 in GSTR 3B shall be declared in Part V.
e	Any additional outward supply which was not declared by the registered person in FORM GSTR-1 and FORM GSTR-3B shall be declared in Pt.II of the FORM GSTR-9. Such additional liability shall be computed in Pt.IV and the gap between the “tax payable” and “Paid through cash” column of FORM GSTR-9 shall be paid through FORM DRC-03.	Outward supplies not declared in GSTR 3B and GSTR1 shall also be declared in Part II. The additional liability now payable shall also be declared in part IV. And paid through DRC 03
f	Many taxpayers have reported a mismatch between auto-populated data and the actual entry in their books of accounts or returns. One common challenge reported by  taxpayer is in Table 4 of FORM GSTR-9 where details may have been missed in FORM GSTR-1 but tax was already paid in FORM GSTR-3B and therefore  taxpayers see a mismatch between auto-populated data and data in FORM GSTR-3B. It may be noted that auto-population is a functionality provided to taxpayers for facilitation purposes, taxpayers shall report the data as per their books of account or returns filed during the financial year.	As per the instructions to Form GSTR 9, only as Table Entry 6A and Table Entry 8A shall be auto-populated. However in the portal in GSTR 9 many entries are being auto-populated. It says, in Form GSTR 9, “taxpayers shall report the data as per their books of account or returns filed during the financial year.” So again, with this clarification, they have confused whether to fill GSTR 9 as per books of accounts or Returns.
g	Many taxpayers have represented that Table 8 has no row to fill in credit of IGST paid at the time of import of goods but availed in the return of April 2018 to March 2019. Due to this, there are apprehensions that credit which was availed between April 2018 to March 2019 but not reported in the annual return may lapse. For this particular entry, taxpayers are advised to fill in their entire credit availed on import of goods from July 2017 to March 2019 in Table 6(E) of FORM GSTR-9 itself.	IN table 8 there was no entry fto show IGST on goods imported in F.Y. 17-18 but ITC in F.Y. 18-19. It is clarified that said details is to be mentioned in Table Entry No 6E. This may give difference, at Entry No 6J and also it will add un reconciled item for Form GSTR 9C. There was a mistake in the drafting of the form and through this clarification, there is a trail to cover the error. However the clarification will lead to mismatch at Entry No. 6J as provided above.
h	Payments made through FORM DRC-03 for any supplies relating to period between July 2017 to March 2018 will not be accounted for in FORM GSTR-9 but shall be reported during reconciliation in FORM GSTR-9C.	As per Para (e) the additional liability can be paid in Form GSTR 9. However in this para it is said that the additional liability shall not be reported in GSTR C7 but shall be reported  as reconciliation item in GSTR 9C. This is again a confusing clarification.
i	All the taxpayers are requested to file their Annual Return (FORM GSTR-9) at the earliest to avoid last minute rush.	The due date was already extended twice, there does not seem to be any further extension in spite of the various confusions in the form

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GST Audit Checklist

GST Audit Check list covers following Points – GST Registration Certificate, Invoicing documentation, Goods Sent to Job Work, Supply, Time of supply, Input Tax Credit,Classifications,Input Tax Service Distributor, Returns, GST collections and payment verification, Reverse Charge, Value of Supply, Place of supply, Refund, Inward supply, Maintenance of Books of Accounts And other General Points

Client’s Name
Financial / Accounting Year
Audit Check List
S.NO.	Points To be Checked	Checked By	Yes	No	NA	Remark
1	GST Registration Certificate
1.1	Have you checked whether the Supplier has applied for New Registration or has he Migrated?
1.2	Have you checked the registration details of: Registered Person, Business Verticals, Factory / Warehouse / Godown, ISD and in respect of Other place of business?
1.3	Whether GSTIN is displayed in Name Board viz., Godown /Branches / other places of business?
1.4	Whether the additional place of business within the State is incorporated in the Registration Certificate?
1.5	Whether the Separate Registration is taken for Input Service Distributor?
1.6	Whether any amendment is required to be made to the Registration Certificate?
2	Invoicing documentation
2.1	Whether Tax Invoice or Bill of supply is issued as per GST law? Whether it contains all the relevant particulars as required under law?
2.2	Whether Tax Invoice for supply of goods is issued on or before the removal / delivery of goods?
2.3	Whether Tax Invoice for supply of services is issued within 30 days from date of supply of service?
2.4	Whether bill of supply is issued for exempt supplies/ non- GST supplies?
2.5	Whether the Revised Invoice is issued in case of New Registration?
2.6	Whether Receipt voucher is issued for receipt of advance?
2.7	Whether Self-invoice and payment voucher is issued in case of RCM transactions under Section 9(4)?
2.8	Whether refund voucher is issued for refund of advance received?
2.9	Whether Credit note/ Debit notes are issued as per the provisions of the GST law as per Section 34?
2.10	Whether Credit note/Debit Note is issued before 30th September of the Subsequent Financial Year?
2.11	Have you checked correctness of Tax Invoice /Bill of supply with the appropriate Supply Register/ GSTR 1?
2.12	Whether the Tax Invoice/Bill of supply is cancelled for genuine reasons, if any like Name of party /details where applicable?
2.13	Whether any Invoice cum Bill of supply is raised for specific transactions?
2.14	Whether the transport documents are maintained and verified?
2.15	Whether any copies of Credit Note and Debit Note are raised otherwise than as specified in Section 34?
2.16	Whether the Delivery challans/E- way bill Register is maintained?
2.17	Whether Series of documents issued as per clause 13 of GSTR 1 matches with the Books of Account from July 2017 to March 2018?
3	Goods Sent to Job Work
3.1	Whether the conditions are fulfilled for claiming input tax credit on goods (including capital goods) sent for job work?
3.2	Whether the Principal has sent goods to the job worker under the cover of delivery challans?
3.3	Whether the registered person has furnished FORM ITC 04 for the quarters in which goods were sent out for job work?
3.4	In case the registered person has supplied goods directly from the place of business of job worker, whether he has satisfied the conditions laid down in proviso to Section 143 (1) of GST Act?
3.5	In case the job worker is unregistered, and such job worker has supplied any waste/ scrap generated during the job work from his place of business directly, whether the registered person has paid tax on such supply?
3.6	Have you checked any goods are sent for job work and returned within specified time?
4	Supply
4.1	Whether the kind of outward supplies like Taxable supply, Exempted supply, Zero- rated supply, NIL rated supply, Supplies to SEZ unit / developers / Deemed Export and Merchant Export etc. are appropriately classified under GST law?
4.2	Whether any transaction which falls within the scope of supply has not been identified by the Registered Person?
4.3	Have you checked Interstate supply as per Section 7(5) of the IGST Act 2017?
4.4	Have you checked Intra State supply as per Section 8 of the IGST Act 2017?
4.5	Whether the Zero-rated supply is verified as per the provisions of the law?
4.6	Whether the supplies made by a registered person falls within the meaning of Composite /non- composite/ Mixed supply? If yes, whether the same has been offered to tax as per Section 8 of the CGST Act?
4.7	Have you checked for sale of capital goods and the GST charged and as to whether they are included in the returns filed?
4.8	Whether Interstate supply is regarded as Intra state supply and vice versa?
4.9	Whether abatement provisions, if any, are applicable (like one third for land) is compiled with?
4.10	Whether the transactions are correctly classified as supply of goods or supply of services?
4.11	Have you checked the deemed supply as per schedule I?
4.12	Are there any transactions wherein the goods sent for job work not received back are treated as supply?
5	Time of supply
5.1	Whether time of supply is compiled for Reverse charge?
5.2	Whether time of supply is compiled for goods sent on approval?
5.3	Whether Time of supply provisions have been complied as per Section 12 and 13 of the CGST Act?
5.4	In case of change in rate of tax in respect of goods or services, whether the time of supply has been determined as per Section 14 of the CGST Act?
5.5	Whether time of supply is compiled for continuous supply of goods/Continuous supply of services should be verified?
6	Input Tax Credit
6.1	Have you checked the input tax credit availed with invoices from vendors like Bill of Entry, Tax Invoice, Debit Note, Self-Invoice, ISD Invoice?
6.2	Have you checked entries in Inward supplies records for input tax and reconciled with Invoices from the vendors?
6.3	Have you checked the inward supplies records with Monthly return and ascertained reasons for variations, if any?
6.4	Have you made a list of restricted input tax credit items as per the GST law?
6.5	Have you tallied monthly return with Input tax credit receivable, if any?
6.6	Have you reconciled tax collections with payments and transfer of the balance to appropriate accounts?
6.7	Have you checked adjustment of tax set-off by relevant journal entries?
6.8	Have you checked that input tax credit on capital goods is correctly availed?
6.9	Whether Input Tax credit is reversed for the sale of capital goods as specified in GST law?
6.10	Any Reversal of input tax credit for the goods sent for job work?
6.11	Whether the recipient of supply has effected payment for such inward supply within 180 days from the date of Invoice?
6.12	Whether input tax credit availed is debited to recoverable account for availing re-credit?
6.13	Whether the supplier has availed both benefits of depreciation and input tax credit?
6.14	Whether the documents (tax invoice/ debit note) on the basis on which input tax credit is claimed contains the mandatory details of the recipient such as Name, GSTIN, Address and all other particulars as prescribed?
6.15	Whether Input tax credit is reversed against the receipt of Credit Note?
6.16	Whether input tax credit is bifurcated in to eligible, ineligible,blocked and common credits?
6.17	Whether the common credits are reversed as per Rule 42 of the CGST Rules?
6.18	Whether input tax credit is availed on capital goods? If yes, whether credit is reversed as per Rule 43 of the CGST Rules?
6.19	Whether reconciliation of input tax credit between GSTR 3B and GSTR 2A is done?
6.20	Whether any ineligible transitional credit is reversed as per the law?
6.21	Have you tallied monthly return with Input tax credit receivable?
6.22	Any Reversal of Input Tax Credit for change in scheme from composition to Regular?
6.23	Whether transitional Credit is availed as per the provisions of the law?
7	Classifications
7.1	Whether the classification of goods/ services is in conformity with Schedules / Notifications?
7.2	Whether the HSN classification is verified to confirm the rate of tax on goods and services?
7.3	Whether the HSN details for inward and outward supply are verified?
7.4	Whether the SAC code/HSN code is as per the law?
7.5	Whether the HSN/SAC classification is the same as was followed in the erstwhile law if applicable?
7.6	Is there any specific Advance Ruling applicable?
7.7	Whether there has been any change in rate of tax during the period by way of amendment in the rate of tax notification or exemption notification?
8	Input Tax Service Distributor
8.1	Whether separate registration is taken as per the Provisions of law?
8.2	Whether any tax is payable under reverse charge and obtained separate Registration?
8.3	Whether eligible and ineligible input tax credit is apportioned as per the GST law?
8.4	Is there is any reversal of Input tax credit and credit note is issued?
8.5	Whether the calculation of Turnover for allocating the input tax credit is as per the law?
8.6	Whether the ISD invoice containing the relevant particulars is issued correctly as per the provisions of the law?
9	Returns
9.1	Whether the copies of the GST returns filed by the registered person are reviewed?
9.2	Whether reconciliation of GSTR 9 with GSTR1 and GSTR 3B is done?
9.3	Whether interest which was due, has been paid while filing the Return?
9.4	Whether any late fee which is due is paid while filing the return or any late fee which was waived?
9.5	Whether transitional credit Returns are filed within the due date?
9.6	Whether transitional credit Returns are not filed due to technical glitches?
9.7	Whether the amendment details are filed correctly in the Returns?
10	GST collections and payment verification
10.1	Have you checked whether tax payable is paid within the prescribed time as per the GST law?
10.2	Have you checked whether tax is being collected beyond tax payable? If yes, whether Sec. 76 is complied.
10.3	Whether the tax payer charged wrongly IGST in place of CGST/SGST or vice versa?
10.4	Have you followed the provisions of Rule 35 of the CGST Rules in respect of collection of taxes?
10.5	Is there any excess collection of taxes?
11	Reverse Charge
11.1	Whether Reverse charge tax is paid under 9(4) of the CGST Act 2017 up to 12th October 2017?
11.2	Whether Reverse charge tax on notified supplies under Section 9(3) and 9(5) of the CGST Act 2017 is duly paid?
11.3	Whether Reverse charge tax has been paid wrongly in lieu of CGST/SGST as IGST or vice versa?
11.4	Whether corresponding input tax credit is availed on Reverse charge?
11.5	Whether conditions of paying tax for RCM are fulfilled?
12	Value of Supply
12.1	Whether all the inclusions to the value of supply as per Section 15 of the Act have been verified?
12.2	Whether discount offered to customers (pre/ post supply) is not included in the value of supply after fulfillment of conditions under Section 15(3) of the Act?
12.3	Whether valuation rules have been applied as per the GST law?
12.4	Whether the registered person has claimed any pure agent deduction as per Rule 33?
12.5	In case the value of supply is inclusive of the GST, whether the taxable value and tax amount is determined as per Rule 35 of the CGST Rules, 2017?
12.6	In case of exports, whether the rate of exchange of currency is determined as per Rule 34 of the CGST Rules, 2017?
12.7	Whether the rate of tax charged for the supplies is as per the GST rate notifications issued/ amended from time to time?
12.8	Whether CGST/SGST/IGST is charged in accordance with place of supply provisions?
12.9	Whether the tax collected from the customers has been entirely remitted to Government?
13	Place of supply
13.1	Whether the supply is inter- State/Intra State has been identified based on the policy document of the entity?
13.2	Whether the conditions for inter- State supply are fulfilled as per IGST Act, 2017?
13.3	Whether the conditions for intra- State supply are fulfilled as per IGST Act, 2017?
13.4	Whether the conditions for export of goods are fulfilled?
13.5	Whether the conditions are fulfilled for export of services?
13.6	Whether there are any imports of goods/import of services?
13.7	Whether the Zero-rated supply is with or without payment of taxes?
13.8	Whether the conditions for location of supplier are fulfilled?
13.9	Whether the supplier is intermediary under the GST Act and the conditions are fulfilled?
13.10	Whether the supplier has declared sale in course of Imports, Non- territory supply, High Sea supply in the Return correctly?
13.11	Whether the conditions for location of the recipient are fulfilled?
13.12	Whether the wrong payment of tax i.e. IGST in lieu of SGST/CGST is claimed as refund?
13.13	Whether the wrong payment of tax i.e. SGST/CGST in lieu of IGST is claimed as refund?
13.14	Whether the Supply by SEZ to DTA is treated as inter-State subject to fulfilment of conditions?
14	Refund
14.1	Whether the Supplier is eligible for Refund as per Section 54?
14.2	Whether the supplier has applied for Refund and whether it is sanctioned?
14.3	Whether any Refund is Rejected or pending before the Authority?
14.4	Whether the Refund is Re-credited to Electronic Credit Ledger?
14.5	Whether the Manual /Electronic documents for Refund are verified?
14.6	Whether the Accounting impacts are given for Refund applied,pending rejected or appealed?
14.7	Whether any Refund is wrongly applied like input services/Capital goods credit for inverted duty structure?
14.8	Whether Refund and Input Tax credit is claimed for the same transactions?
14.9	Whether interest on delayed refund is receivable?
15	Inward supply
15.1	Have you made a list of inward supply invoices for which there are no corresponding entries in inward supply records and GST return?
15.2	Have you checked that inward supplies are classified between intra-State, inter-State, Imports etc.?
15.3	Have you checked that purchases of capital goods are booked as fixed assets and the GST is paid thereon? Have you checked Assets which have depreciated 100%?
15.4	Have you checked the purchase invoice/ delivery challans with purchase register?
15.5	Have you checked the HSN Classification for inward supplies?
15.6	Have you checked Inward supply with the Monthly returns?
15.7	Have you checked whether any input tax is added to the cost of purchase where input tax credit is not allowable?
15.8	Have you checked sale / deletion of fixed assets?
16	Maintenance of Books of Accounts
16.1	Whether books of accounts are maintained as specified in Section 35 r/w Rules 56, 57 and 58 of the GST Law?
16.2	Whether Books of accounts are maintained electronically / Manually?
16.3	Whether books of accounts are maintained at each place of business?
16.4	Whether books of accounts are maintained Manually or Electronically? If the same are maintained Electronically, whether the software used complies with the requirements of the law?
16.5	Whether the copies of Agreements/Agent agreement and other supporting documents are obtained?
16.6	Whether copies of the Audited Financial Statements for each registration have been obtained?
16.7	Whether Transporter/Warehouse keeper has maintained the books of Account as per the law?
16.8	Whether the Register E-way Bill/Delivery challan is maintained as per the law?
16.9	Whether E- Way bills are used for Valid purpose?
16.10	Whether the register of ITC-01, ITC-02, ITC-03 and ITC-04 is maintained as per the GST law?
16.11	Whether the supplier maintains the Cash/Bank Register for recording the transactions entity wise?
16.12	Whether the books of Accounts maintained are centralized or decentralized?
17	General
17.1	Whether the registered person has complied with Anti-Profiteering clause?
17.2	Whether reliance is placed on any notifications / clarifications / advance ruling / judgement in respect of rate of tax charged and collected. Whether any conflicting Advance Ruling order is applicable?
17.3	Are there any departmental inspection proceedings for Transitional Credits or any other demands created?
17.4	Have you checked for any adverse points in reports issued by Internal/ Statutory auditors or any other such reports?
17.5	Have you checked for any adverse points in reports in the previous year?
17.6	Have you checked that assessment orders / appeal orders/notices issued by the department, if any?
17.7	Is there any judicial pronouncement that could be applicable to the dealer?
17.8	Have you discussed any adverse issues arising out of the audit with the client?
17.9	Have you obtained the letter of appointment / issued the letter of acceptance of audit?
17.10	Have you come across any unusual transactions?
17.11	Have you checked miscellaneous receipts / other income?
17.12	Have you come across any huge or unusual inward or outward supply transactions / tax credits / tax payments etc.?
17.13	Have you noticed any comments on internal controls, periodicity of updating of accounts / records etc.?
17.14	Whether the registered person has availed the facility of digital signature?
17.15	Whether the Auditor has used appropriate Audit tools?

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