With the approach of March 31, 2025, it is essential for businesses to address various compliance requirements to facilitate a seamless transition into the new year and prevent any negative repercussions. Failure to file specific forms may result in the loss of numerous benefits. Therefore, businesses must remain attentive to the necessary compliance obligations.
In continuation of the last article, there is a list of other actions a business needs to take care of before the end of the financial year:
1. Opting for Composition Scheme
- The composition scheme under GST is a simplified mechanism that is available to taxpayers with turnover within the threshold limit.
- Under the Composition scheme, the taxpayer is allowed to pay GST at a nominal rate without availing of the corresponding ITC.
- However, to opt for the composition scheme for FY 2025-26, the taxpayer is required to furnish a declaration in form GST CMP-02 before 31st March 2025.
- A taxpayer who opts for a composition scheme is not required to file GST CMP-02 every year.
- Intimation filed in Form GST CMP-02 shall remain valid as long as the taxpayer is eligible for the scheme or until the taxpayer withdraws from the scheme.
2. Payment of Tax under Amnesty Scheme for GST DRC-01
- In line with the recommendation of the GST Council in the 53rd GST Council Meeting, a new Section 128A was inserted under the CGST Act, 2017 to provide a waiver of interest and penalties concerning GST DRC-01 issued under Section 73 of the CGST Act.
- As per Section 128A, where there is any amount of tax payable as per the statement or order and the taxpayer pays the full amount of tax payable by 31st March 2025 then:
- No interest under section 50 and penalty shall be payable, and
- all the proceedings concerning such notice order or statement shall be deemed to be concluded.
- This scheme applies for FY 2017-18 to FY 2019-20.
- Therefore, if any taxpayer has an order in form GST DRC-07 against GST DRC-01 issued under section 73 then the taxpayer may get a waiver of interest and penalty subject to payment of tax by 31st March 2025.
3. Obtain GST Registration as Input Service Distributor (ISD)
- So far, a registered person is allowed to distribute Input Tax Credit (ITC) to common Input Service through ISD or Cross Charge provisions.
- However, as per a recent amendment under the CGST Act, a registered person is mandatorily required to distribute ITC with respect to common Input Services through ISD provisions only with effect from 1st April 2025.
- Therefore, every person, having a common Input service, is required to obtain a separate GST registration as an Input Service Distributor before 1st April 2025.
- Now, all Input Tax Credits concerning common Input Services shall reflect in ISD GST and shall get distributed from there to the concerned GSTINs.
- All the vendors are required to be informed in advance about Input Service Distributor GSTIN so that common ITC is received in ISD GSTIN and gets distributed from there.
Read Also: Points To Be Taken Care of Before End of Financial Year 2024-25, i.e., 31st March, 2025| Part-1
4. New Invoice series under GST
- Every business is required to implement a new series of Invoices, Credit Notes, and Debit Notes in the new Financial year.
- Therefore, every business is required to make necessary changes in the software to ensure that a new and unique series is commenced in the new year.
5. Payment of Advance Tax
- As per provisions of the Income Tax Act, every person having a tax liability of INR 10,000 or more is required to make payment of such tax in the same financial year.
- Therefore, if any person is having tax liability exceeding INR 10,000 for FY 2024-25 then the payment of such tax (net of TDS) is required to be made in the form of Advance Tax by 15th March 2025.
6. Filing of Annual Return under RoDTEP
- The Remission of Duties and Taxes on Export Product Scheme (RODTEP Scheme) was introduced with effect from 1st January 2021 replacing the earlier export benefit schemes such as MEIS (Merchandise Export from India Scheme) and SEIS (Service Export from India Scheme).
- Under the RODTEP scheme, the exporter is given benefits in the form of scripts once the goods are exported.
- Annual returns for the RoDTEP Scheme are to be filed on the DGFT portal by 31st March of the next financial year, i.e., for FY 2023-24, annual returns are to be filed by 31st March 2025.
- In case of non-filing of the Annual Form by 31st March, the exporter shall have the option to file an annual return by the next 3 months, i.e., up to 30th June on payment of composition fee of INR 10000/-.
- After the expiry of 3 months, the annual return can be filed on payment of composition fee of INR 20000/-.
- Annual return is to be filed by the exporter whose total RODTEP claim exceeds INR 1 Crores in a financial year for all HSN Codes.
7. Updated Income Tax Return
- If a taxpayer fails to file the Income Tax Return by the due date or even misses the deadline for filing a belated return or files a return with an error or omission and the time limit to file the revised return has expired then the taxpayer shall have the option to file the updated return.
- ITR-U or Updated Income Tax Return allows taxpayers to update their ITRs by correcting errors or omissions or allows a taxpayer to file a belated return (after the time limit of filing of belated return expires.)
- ITR-U can be filed up to 4 years from the end of the relevant assessment year.
- Therefore, For FY 2019-20, 31st March 2025 is the last date for filing of updated return.
Conclusion:
The date is of paramount importance under legal statutes, and any actions undertaken after this specified date may lead to penalties or the forfeiture of benefits. Consequently, taxpayers must complete a range of necessary actions prior to March 31, 2025, in order to secure deductions and avoid penalties.
