Lalit Saini & Associates

🔹 Opening Window of GSTR-1A

The option to file GSTR-1A opens:

👉 After filing GSTR-1
👉 Before filing GSTR-3B for the same period

Proviso to Section 16(2) – Key Concept

The proviso states:

👉 If the recipient fails to pay the supplier within 180 days from the date of invoice, then:
The Input Tax Credit (ITC) availed must be reversed, along with interest u/s 50

📌 Where to Reverse ITC

In GSTR-3B:

Table 4(B)(2) → “Others (ITC reversal)”

📌 Re-availment of ITC

Also reported in:
Table 4(A)(5) → “All other ITC”

Amended form no from Apr 26

Proposed Change in Budget 2026

Under the Code on Wages, 2019 (part of the New Labour Codes):

🔑 Core Rule – “50% Wage Rule”
Wages must be at least 50% of total remuneration (CTC)

If Basic + DA + Retaining Allowance < 50% of CTC,
👉 the excess allowances are deemed as wages
What counts as Wages
✅ Basic Pay
✅ Dearness Allowance (DA)
✅ Retaining Allowance

What is excluded (subject to 50% cap)
❌ HRA
❌ Bonus
❌ PF contribution by employer
❌ Conveyance, overtime, commissions, allowances

➡️ Total exclusions cannot exceed 50% of CTC

Practical impact
📈 Basic salary increases
📈 PF, Gratuity, Leave Encashment liability increases
📉 Net take-home may reduce

Accounting & Audit angle (Ind AS 19)
Higher Basic = higher Defined Benefit Obligation (DBO)
Recognised immediately as Past Service Cost (if structure is revised)
P&L impact without cash outflow

💥 A ₹956 Cr exceptional item in P&L
➡️ A classic case of Past Service Cost under Ind AS 19
What’s driving this?
📌 Notification of New Labour Codes
📌 The 50% Wage Rule – Basic pay must be at least 50% of CTC

Impact:
🔹 Higher Basic = Higher Gratuity & Leave Encashment
🔹 Sharp jump in PVDBO overnight
🔹 No immediate cash outflow, but a significant hit to PBT

⚠️ Message for CFOs & Finance Heads:
If actuarial valuations haven’t been updated with the new wage assumptions, surprises may already be building in your books.

📉 BoAt Audit Red Flags — What’s Actually Happening

Recent disclosures in boAt’s updated IPO filing show that the company’s statutory auditors raised several concerns about its financial reporting and internal controls. These include:

🔹 Quarterly financials filed with banks didn’t match the company’s books for FY23–FY25 📊

🔹 Short-term funds were used for long-term purposes in some subsidiaries 💰

🔹 Remuneration paid to directors exceeded limits under the Companies Act (later regularised) 👥

🔹 Compliance gaps like missing audit-trail records, backups of financial data and physical asset verification were pointed out 🧾

The company states it has taken corrective steps — like reconciling figures and improving systems — but auditors still see risks going forward.

👉 Important: These are audit observations disclosed by the company itself in its IPO documents — not random rumors.

The Ministry of Corporate Affairs has revised the definition of a Small Company through Notification G.S.R. 880(E) dated 01.12.2025. A company now qualifies as a Small Company if its paid-up capital is up to ₹10 crore and turnover up to ₹100 crore. These new thresholds take effect upon Gazette publication.

The Institute of Chartered Accountants of India (ICAI) has announced relaxations in compliance with two Guidance Notes for the annual reporting period 2024-25. The Guidance Notes are:
- Guidance Note on Financial Statements of Non-Corporate entities
- Guidance Note on Financial Statements of Limited Liability Partnerships

These Guidance Notes were issued in August 2023 and are effective for financial statements covering periods beginning on or after April 1, 2024. Considering the interests of members, the ICAI Council has decided to provide relaxation in compliance with these Guidance Notes for the 2024-25 reporting period.

Last Reminder