Procedural Compliance under GST: formula sheet

Key formulas

Compulsory registration

Section 24 categories must register irrespective of the section 22 threshold

Opens with the words 'Notwithstanding anything contained in sub-section (1) of section 22'. Use this phrase in answers.

Amendment (section 28)

Registered person informs the proper officer of changes in particulars; officer approves or rejects

Approval is not needed for prescribed particulars. Rejection needs an opportunity of being heard.

Cancellation on application or own motion (section 29(1))

Business discontinued/transferred/amalgamated/demerged; change in constitution; or no longer liable to be registered or opting out of voluntary registration

Can be on the officer's own motion or on application by the registered person or legal heirs on death.

Cancellation by officer (section 29(2))

Contravention of prescribed provisions; composition person not filing return for a financial year beyond three months from due date; non-filing for prescribed continuous tax period; voluntary registrant not commencing business within six months; fraud, wilful misstatement or suppression

Can be from any date, including retrospective. Hearing is mandatory. Registration may be suspended during pendency.

Effect of cancellation

Liability for tax and dues before cancellation continues (s.29(3)); pay higher of ITC on stock and capital goods or output tax on them (s.29(5))

For capital goods, ITC reduced by prescribed percentage points, or tax on transaction value, whichever is higher.

Revocation (section 30)

Applies where the proper officer cancelled on his own motion; apply in prescribed manner, time and conditions

Application cannot be rejected without hearing. Revocation is subject to prescribed conditions.

Invoice for goods (s.31(1))

Issue tax invoice before or at the time of removal (goods move) or delivery/making available (other cases)

Description, quantity, value, tax charged and prescribed particulars must appear.

Invoice for services (s.31(2))

Issue tax invoice before or after the service, within the prescribed period

The period is in the rules. Do not quote a number of days unless the question gives it.

Revised invoice (s.31(3)(a))

Within one month from the date of the registration certificate, for supplies from the effective date of registration to the certificate date

Applies to invoices already issued in that gap.

Small value (s.31(3)(b))

Value of supply < ₹200: tax invoice may be skipped, subject to conditions

Same ₹200 limit applies to a bill of supply.

Bill of supply (s.31(3)(c))

Exempted supply or section 10 composition → bill of supply instead of tax invoice

No tax is charged on it.

Advance receipt (s.31(3)(d), (e))

Advance received → receipt voucher; no supply and no invoice → refund voucher may be issued

Receipt voucher is mandatory; refund voucher is optional (may).

Reverse charge documents (s.31(3)(f), (g))

Invoice for supply from unregistered supplier; payment voucher at time of payment

A supplier registered only for TDS under section 51 counts as unregistered for this purpose.

Continuous supply of goods (s.31(4))

Invoice before or at the time of each statement of account or each payment received

Applies where successive statements or payments are involved.

Continuous supply of services (s.31(5))

Due date ascertainable → on or before due date; not ascertainable → before or at receipt of payment; linked to an event → on or before completion of event

Advance receipt rules in s.31(3)(d) still apply.

Cessation of service (s.31(6))

Invoice at the time supply ceases, to the extent of supply made

Covers contracts ending before completion.

Sale on approval (s.31(7))

Invoice before or at the time of supply, or six months from date of removal, whichever is earlier

Applies to goods sent on approval for sale or return.

Credit note (s.34(1), (2))

Issued where value/tax is excessive, goods are returned, or goods/services are deficient; declare in the return for the month of issue, not later than 30 November following the end of the financial year of supply or the date of annual return, whichever is earlier

No reduction in output tax if the incidence of tax and interest has been passed on to another person.

Debit note (s.34(3), (4))

Issued where taxable value or tax is less than it should be; declare in the return for the month of issue

Includes a supplementary invoice. No cut-off date like credit note.

Section 35(1) accounts

True and correct account at principal place of business of: production, inward and outward supplies, stock, ITC availed, output tax payable and paid, other prescribed particulars

If more than one place of business is shown in registration, accounts of each place are kept there. Electronic form is allowed in the prescribed manner.

Section 35(2) third-party records

Warehouse or godown owners, operators and transporters: records of consigner, consignee and other details of goods

Applies whether or not they are registered.

Section 36 retention

Retention period = until 72 months from due date of annual return for the relevant year

If in appeal, revision, other proceedings or offence investigation: one year after final disposal, or the 72-month period, whichever is later.

Section 65 audit timelines

Notice: not less than 15 working days before audit. Completion: within 3 months from commencement, extendable by up to 6 months. Findings: within 30 days of conclusion

Commencement is the later of the date records called for are made available or actual institution of audit at the place of business. Extension is by the Commissioner, for reasons recorded in writing.

Section 65(7) follow-up

Tax not paid, short paid, erroneously refunded, or ITC wrongly availed or utilised: action under section 73 or 74 or 74A

Section 66(6) has the same follow-up for special audit.

Section 66 special audit

Officer not below Assistant Commissioner + prior approval of Commissioner + written direction. Report within 90 days, extendable by 90 days

Triggers: value not correctly declared or credit availed not within normal limits. Auditor is a CA or cost accountant nominated by the Commissioner. Expenses are determined and paid by the Commissioner.

Section 71 production of records

Records to be made available within 15 working days of demand, or further period allowed

Authorisation is by an officer not below Joint Commissioner's authorisation level: the proper officer authorising must be not below the rank of Joint Commissioner.

Late fee for GSTR-1, GSTR-3B and similar returns (s. 47(1))

Late fee = ₹100 × days of delay, capped at ₹5,000

₹100 per day of failure for the return or outward details due under section 37, 39, 45 or 52. Check notifications for reduced fee rates, which may apply by turnover or nil returns.

Late fee for annual return (s. 47(2))

Late fee = ₹100 × days of delay, capped at 0.25% of turnover in the State or Union territory

Applies to the annual return under section 44.

Interest on delayed tax (s. 50(1), (2))

Interest = Tax unpaid × rate × days ÷ 365

Rate cannot exceed 18% a year and is notified by the Government. It runs from the day after the due date. Use the notified rate given in the question.

Interest on wrongly availed and utilised ITC (s. 50(3))

Interest rate not exceeding 24% a year

Applies where ITC is wrongly availed and also utilised. Rate is notified.

Order of utilising ITC (s. 49(5))

IGST → IGST, CGST, SGST/UTGST. CGST → CGST, IGST. SGST → SGST, IGST. UTGST → UTGST, IGST

CGST credit cannot pay SGST or UTGST. SGST or UTGST credit cannot pay CGST. SGST or UTGST credit pays IGST only where CGST credit balance is not available.

Order of discharge of dues (s. 49(8))

(a) Self-assessed tax and other dues of earlier periods; (b) self-assessed tax and other dues of the current period; (c) any other amount, including demands under section 73, 74 or 74A

Tax dues mean tax only. Other dues mean interest, penalty, fee and any other amount.

Assessment of non-filers (s. 62)

Assessment order within 5 years from the annual return due date for the year. Valid return within 60 days of service withdraws the order

A further 60 days is allowed on an additional late fee of ₹100 per day after the first 60 days. Interest and late fee still continue.

Time limit for refund claim

Application before expiry of 2 years from the relevant date

Section 54(1). For UN bodies, embassies and notified persons, two years from the last day of the quarter in which the supply was received (section 54(2)).

Refund of unutilised ITC

Allowed only for (i) zero-rated supplies without payment of tax; (ii) inverted rate structure

Section 54(3). Inverted rate refund excludes nil rated or fully exempt output supplies and notified supplies. No refund if the supplier avails drawback of central tax or claims refund of integrated tax.

Provisional refund on zero-rated supplies

90% of the amount claimed

Section 54(6). Final order follows after verification of documents. Notified categories of registered persons are excluded.

Time to pass refund order

Within 60 days from receipt of a complete application

Section 54(7).

Unjust enrichment exemption

Claim below ₹2,00,000: a declaration is enough

Section 54(4) proviso. For ₹2,00,000 or more, documentary evidence that incidence of tax was not passed on is needed.

Minimum refund

No refund under section 54(5) or (6) if amount < ₹1,000

Section 54(14).

Relevant date, common cases

Goods exported by sea/air: date ship or aircraft leaves India. Services exported: receipt of payment in convertible foreign exchange (or INR where RBI permits), or invoice date if paid in advance. Any other case: date of payment of tax.

Explanation (2) to section 54. For inverted duty refund, it is the due date for filing the return under section 39 for the period of the claim.

Withholding of refund

Officer may withhold if return not filed or tax, interest or penalty unpaid beyond last date to appeal

Section 54(10). He may also deduct unpaid dues from the refund.

Minor breach test

Breach is minor if tax involved < ₹5,000

Section 126(1) Explanation (a). Exactly ₹5,000 is not less than ₹5,000, so it is not a minor breach under this test.

Easily rectifiable test

Easily rectifiable = error apparent on the face of record

Explanation (b). Also needs no fraudulent intent and no gross negligence for the protection in sub-section (1).

Proportionality

Penalty ∝ facts, degree and severity of breach

Section 126(2). The penalty must be commensurate with the breach, not mechanical.

Hearing rule

No penalty without opportunity of being heard

Section 126(3). Section 127 also requires a reasonable opportunity of being heard.

Speaking order

Order must state nature of breach + law/procedure fixing the penalty

Section 126(4).

Voluntary disclosure

Disclosure before discovery → may be a mitigating factor

Section 126(5). Discretion of the proper officer, not automatic relief.

Exclusion

Section 126 does not apply to fixed-sum or fixed-percentage penalties

Section 126(6).

Assignment of score, section 149(1)

Every registered person may be assigned a score by the Government, based on his record of compliance with the Act

Applies to registered persons. The basis is the compliance record under the CGST Act.

Parameters, section 149(2)

Score may be determined on such parameters as may be prescribed

Parameters come from the rules, not from the Act itself.

Update and publication, section 149(3)

Score may be updated at periodic intervals, intimated to the registered person, and placed in the public domain in the prescribed manner

Three actions: update, intimate, publish.

Contrast with confidentiality, section 158(1)

Particulars in returns, statements and accounts shall not be disclosed, save as provided in section 158(3)

Section 158(3)(l) allows publication of information about a class of taxable persons or transactions if the Commissioner thinks it desirable in the public interest.

Quick revision

• IGST Section 20 applies CGST procedure rules, such as registration, returns and payment, to integrated tax mutatis mutandis.
• A credit note may be issued where the invoice value or tax exceeds what is payable, goods are returned, or supplies are deficient.
• A credit note must be declared in the return for the month of issue, but not later than 30 November after the financial year of supply or the annual return date, whichever is earlier.
• No reduction in output tax liability on a credit note if the incidence of tax and interest has been passed on to another person.
• A debit note is issued where the invoice value or tax is less than payable. It includes a supplementary invoice.
• Cash ledger is credited by deposits. Credit ledger is credited with self-assessed input tax credit.
• Integrated tax credit is used first for integrated tax, then central tax, then State or UT tax.
• Central tax credit pays central tax first, then integrated tax. It cannot pay State or UT tax. State or UT tax credit cannot pay central tax.
• Dues order: earlier periods' self-assessed tax and dues, then current period's, then other amounts including demands.
• Under Section 126, no penalty for minor breaches: tax involved below five thousand rupees and an easily rectifiable error without fraud or gross negligence.
• No penalty without a hearing. The order must state the nature of the breach and the law applied.
• Voluntary disclosure before the officer discovers the breach may be a mitigating factor. Section 126 does not apply to fixed-sum or fixed-percentage penalties.

Common mistakes

• Applying the threshold limit to every supplier. Fix: Always scan the section 24 list before checking turnover.
• Saying the officer can cancel registration without notice. Fix: Section 29(2) proviso requires an opportunity of being heard. Suspension may happen during pendency of proceedings.
• Saying a bill of supply is issued for all small supplies. Fix: Bill of supply is for exempt supplies and composition persons. The ₹200 relaxation is separate and subject to conditions.
• Treating a credit note as compulsory. Fix: Section 34(1) says the supplier 'may' issue a credit note, while 34(3) says 'shall' issue a debit note.
• Treating section 65 audit as the taxpayer's own audit by a CA. Fix: Under the supplied text, section 65 is an audit by tax authorities. Section 66 is the one that uses a CA or cost accountant, and only on the officer's direction.
• Counting the 72-month retention from the end of the financial year. Fix: Count from the due date of furnishing the annual return for that year. Then check the proviso for pending appeals or investigation.
• Using ITC to pay interest or late fee. Fix: Remember section 49(4): credit pays output tax only. Interest, penalty and fee come from the cash ledger.
• Using CGST credit to pay SGST, or SGST credit to pay CGST. Fix: Write the allowed paths first. CGST and SGST credit each pay their own tax or IGST, never each other.
• Counting the two years from the date of payment in every refund case. Fix: Find the relevant date first. For exports of goods it is the date the ship or aircraft leaves India.
• Saying all unutilised ITC is refundable. Fix: Remember only two cases: zero-rated supplies without payment of tax, and inverted rate structure.

Exam tips

• Quote the section number and the clause, for example section 24(i) or 29(2)(e). Examiners reward precision.
• Begin threshold answers with the override: section 24 applies notwithstanding section 22(1).
• In cancellation answers, always include the hearing proviso and the consequences under section 29(3) and (5).
• Prescribed time limits and forms come from the rules; do not state them unless you are sure.
• Always cite the sub-section: 31(1) goods, 31(2) services, 31(3) special cases, 34(1) credit note, 34(3) debit note.
• Use the 'may' versus 'shall' contrast for credit and debit notes; it is a common point to earn marks.
• In case studies, state the provision, apply facts, then conclude in one line. List each document separately.
• Do not quote prescribed time periods, rates or e-invoice thresholds from memory unless the question supplies them. Say 'within the prescribed period'.