Financial Year end GST Checkpoints

25-03-2026 CA Akshay M Hiregange, CA Mahadev R

Introduction

The financial year 2025-26 witnessed various significant GST rulings and modifications in GST Act & Rules. Yet again, we see an impact on the interpretation of law and the manner of filing GST returns. Additionally, taxpayers are expected to ensure their vendor compliances alongside their own. This would require the implementation of strong internal controls, implementation of technology, introduction of an indirect tax SOP and regular training and update to the GST compliance team.

In this article, we have noted down 99 GST checkpoints that one may consider for the financial year end, i.e. March 2026 to ensure GST compliance. 

 

Compliances on the GST portal

  1. File application for / renewal of LUT for FY 2026-27 (by 31st March 26) - applicable for supplies to SEZ and export transactions.
  2. Any person who wishes to opt for composition scheme for financial year 2026-27 should file form CMP-02 on the common portal on or before 31st March 2026
  3. A registered person who has opted for composition scheme for FY 25-26 should file FORM GSTR-4 on or before 30th June 2026.
  4. Time limits to apply for QRMP scheme to opt-in or opt-out by 30th April 2026
  5. Filing Annexure V & VI to opt for FCM/RCM for GTA supplies for FY 2026-27 by 31st March 2026.
  6. Filing Annexure VII & IX to opt in or opt out of ‘specified premises’ w.r.t restaurant services provided where accommodation services is less than INR 7,500 per day. Due date is 31st March 2026.
  7. Principal to file form ITC-04 for job work related transactions. [half yearly/annually based on turnover]
  8. GSTAT appeals to be filed by June 30th, 2026, for all past periods’ orders received till 31st March 2026.

 

Reconciliations & Actions for FY 2025-26       

  1. Outward supplies as per books must be matched with GST returns (Books vs GSTR-1 Vs GSTR-3B). This may help indicate if any amendments are required to be made to GST returns. [Turnover + Taxes incl. RCM]
  2. Rate wise reconciliations – Books Vs GSTR 1 (incl. tax ledgers vs 3B for RCM). [Helps confirm proper tax rates were utilized – major GST rates modification done in Sep ‘25]
  3. Reconciliation of E-Invoices issued during the year viz a viz tax invoices generated. E-invoices required even for GST credit notes & GST debit notes.
  4. HSN consolidated thru GSTR 1 Vs Books value [T/o + Taxes]
  5. E-way bill reconciliation with GSTR 1. In case EWB is not required against supply, document reasons for the same.
  6. Reconciliation of balance of credit and cash as per GST portal with balance appearing in books. Variance indicates monthly entry error, or possible missed out/excess claimed ITC.
  7. GSTR 2B Vs ITC Register (books) - Invoice-level tracking of eligible and ineligible ITC in books of accounts and reconciliation to ITC disclosures in GSTR 3B for the FY. Spillover transactions to be specifically tracked.
  8. IMS Vs ITC register (books) - Document level tracking to identify transactions (w.e.f Oct ‘25):
    • Invoices not pertaining to entity (reject)
    • Credit notes or any document creating liability in hands on recipient (accept/reject) (can keep pending for 1 month)
    • Invoices pertaining to entity (Accept/Keep pending) (eligible & ineligible)

IMS tool may help avoid keeping ITC under temporary reversals while filing GSTR 3B.

  1. Option available in IMS module (GST portal) to accept credit notes without reversal of ITC [where original invoice ITC was not claimed/ITC was reversed in GSTR 3B already]
  2. Modify tax clauses in agreement/MoU etc., liability on account of error or improper rejection on part of Customer (indemnify)
  3. Tracker for vendor invoices/CN/DN rejected in GST-IMS portal, and communication tracker for action taken by recipient on own records in GST-IMS portal.
  4. Identification of pending ITC (as per books & GSTR 2B) – Optimize ITC claim, follow up with vendors where required for updating/amending their GSTR 1. 
  5. Verification of credits temporarily reversed in past months, and action taken, i.e. claimed, or considered permanently ineligible.
  6. Ensure that Electronic Credit Reversal & Recredit Statement has been updated which appropriate data. ECRRS balance in GST Portal under scrutiny. Negative balances display a warning message and may lead to blocking of GST return filing in the future.
  7. Verification whether RCM paid matches to RCM ITC claimed? (other than ineligible ITC)
  8. RCM Ledger balance in GST portal under scrutiny. Negative balances display a warning message and may lead to blocking of GST return filing in the future.
  9. Books inventory Vs physical inventory - assess if ITC reversal to be required or may indicate accounting lapse + missed out ITC.
  10. Track ITC claimed on import of goods, bifurcate between ITC as per books and GSTR 2B. Bifurcation required for annual returns and disputing prescribed timeline u/s 16(4).
  11. TDS & TCS receivable check with books of accounts – transactions with E-Commerce Operators and Government/Govt. Organisations. [Accept where eligible and may utilise for tax payments/refund]

 

Note - Most of the above checks would also prove useful while preparing Annual returns in Form GSTR 9 & 9C due in December 2026 for FY 2025-26.

 

Outward (liability)

  1. E-invoice applicability check – Aggregate turnover crossed INR 5 crore in any of the past financial years (starting from FY 2017-18). [this threshold value may be further reduced & also inclusion of B2C transactions in the future]
  2. Verify if any GST DN / CN should be issued for any value short/excess charged or any sales returns by the customer. Time limit applicable only for CN (latest by 31st October).
  3. Raise Credit Notes after obtaining informal acceptance. Avoid rejection of CN in IMS, train Customers/modify T&Cs (this would lead to liability add back in GSTR 3B).
  4. The credit notes will be de-linked from prior invoice or agreement requirement. [yet to be notified – Finance Bill 2026]. Study utility of financial credit notes (without GST) , may help avoid certain procedural difficulties (ex: IMS)
  5. Intermediary services – place of supply has been modified from location of service provider to location of service recipient. [yet to be notified – Finance Bill 2026]. Re-look at taxation matrix and pricing.
  6. Verify compliance of section 18(6) for transfers/sale of Plant & Machinery (P&M). Consider a valuation check in case of related party transactions.
  7. Verify supply of old vehicles including possibility of payment of GST only on profit margin in terms of noti.no.8/2018-CT. [Changes in rate of old MVs incl. EVs (disputable) 18% from January 2025]
  8. Reviewing the debtors' ageing report - Tax implication on customers, i.e. their ITC would not be eligible until payment + MSME non-compliance (useful for realization).
  9. Review of outstanding amounts towards export of services and in case of goods where refund claims are being made [e-BRC linked invoice level]. Exports proceeds (e-BRC receipt) within 15 months (from Nov 25 onwards) can be verified (linked to FEMA). If not, the eligibility of ‘zero-rated supply’ is questionable.
  10. Amendments to GSTR 1 – Changing the outward supplies from B2C to B2B or the type of tax – Passing on the credit to the customers before time limit. (incl time limit for change in T&C) [Ideally to raise Credit Note and Fresh Invoice - E-inv. applicable]
  11. Update details correctly where recipient/ECO are liable to pay the tax. Correct disclosures are key to avoid disputes with department. Use table 14 where appropriate.
  12. Ensure tax liability against receipt of advances (services) and adjustment thereof to derive at unadjusted advances [clarified refund voucher in GSTR-1 Adv Adj.]
  13. Cross-charge to distinct person and related parties for supply of common services. [ISD transactions are not included from 1st April 2025 onwards]
  14. Verify CGST/SGST paid instead of IGST and vice-versa. Understand if sec 77 (CGST Act) / sec 19 (IGST Act) would be applicable (no interest implication).
  15. Verify Income from other sources – if any liable/not liable under GST. Tax position to be clear [Ex: employee recoveries not payable recently clarified; Incentive Vs Discounts; GST liable on Interest charged for delayed receipts, vendor balance written back leading to ITC reversal, GST not paid on scrap sales/assets written off]
  16. Verify expenses which are credited in books of accounts, may indicate income accounted as part of expenditure. Verify and ensure applicable GST is paid on the same.
  17. Study nature of supply in terms of GST provisions –
    • GTA services liable under RCM includes ancillary services as composite supply to the extent it forms part of freight transaction. Where ancillary services are provided on standalone basis GST liability may arise.
    • GST on extended warranty, composite supply when provided along with goods by original supplier, if not may be treated as a separate supply.
  18. Various changes in goods and services rates, Cess removal for most products (major changes in Sep’25). Refer updated rate notifications.
  19. Change in GST valuation and rates (incl cess removal) for tobacco products form 1st February 2026.
  20. HSN codes to be selected from a predefined list within Table 12 of GSTR-1. Manual entry of HSN codes is no longer permitted. Additionally, to be bifurcated into B2B & B2C tabs.
  21. Ensure GSTR 1 matches GSTR 3B. In case of mismatch, ensure reply to DRC-01B notice is done within 7 days. Periodic check of portal for notices necessary. 

 

Inward (ITC)

  1. Timing of availing credit - receipt of goods/service+ Sec 16, RCM credits, credit on advances ineligible etc.
  2. Rule 37 – Check for ITC reversal required on account of non-payment within 180 days or reclaim of any ITC in respect of supplies for which payment has been made. [Recently clarified ITC reversal in table 4B]
  3. Rule 37A – Check (in GSTR 2A) whether vendors have filed their GSTR 3B. This will help satisfy S16(2)(c) of the CGST Act. Where not filed, ITC must be temporarily reversed and can be reclaimed once GSTR 3B is filed by the vendor (irrespective of time limit)
  4. Expense + ITC not accounted – identified through GSTR 2B.
  5. ITC reversal against purchased goods rejected and returned or other credits to the expense ledgers (ensure the impact of the same has been considered in GST returns). Verify against vendor CN reflecting in the GSTR 2B.
  6. Ensure vendor CNs reflecting in GSTR 2B are correct, and ITC is reversed against the same. Where no ITC reversal required option available in IMS portal for disclosure (from Oct 2025). If no other solution, communicate with taxpayer to amend/rectify such details in GST returns.
  7. Accounting of credit where details are not reflected in GSTR 2B – Deferred input account – re-evaluate before October of coming year and consider charge to vendor and passing of as expenses.
  8. Rule 42 – Impact of annualized ITC reversal in case of exempted as well as taxable supplies to be considered (re-computation) [Ensure ‘exempt supply’ is correctly taken in line with S17(3), R43 explanation and R45(4) explanation] (due by September returns, interest for excess claim starts from 1st April)
  9. Rule 43 computation for capital goods as per formula. If performed like R42 impact to be analyzed.
  10. To verify the correctness of accounting treatment of capital assets prior to closure of books, to optimize input tax credits. [Building Vs P&M; Motor Vehicles eligibility; civil works w.r.t P&M Vs other civil works – capex? Safari Retreat SC decision]
  11. To verify whether ITC has been reversed on entries passed due to writing off inventories, assets, theft, samples, destruction, obsolete, etc.
  12. Verify compliance with ISD provisions – Mandatory from 1st April 2025. Additional includes RCM also to be distributed through ISD. Modification of procurement process, vendor communication, readiness to file GSTR 6 and distribute ITC in compliance with GST laws to be reviewed. [Ineligible ITC also can be distributed through ISD]
  13. Credit - CGST/SGST availed as IGST or vice versa, must be rectified within the time limit. [Rejimon (KL HC) applicable for bona-fide errors causing no revenue loss]
  14. Credit availed in a different GSTIN of the same assessee (PAN), to be rectified in GST returns within prescribed timelines. 
  15. Re-verify ITC masters and conditions used for classification of eligible ITC. Ensure not incorrectly classified under ineligible ITC.
  16. Ensure GSTR 2B is higher than ITC claimed in GSTR 3B. In case of mismatch ensure reply to DRC-01C notice is done within 7 days of issue. Regularly go through the portal to identify such notices. 
  17. Import of goods-BOE Vs ICEGATE Vs GSTR 2B – Check periodically to ensure no ITC loss.
  18. Ensure E-invoice is available for procurements. If not, declaration from vendor that E-invoicing provisions are not applicable/exempt from E-inv provisions (check portal).
  19. For procurements from unregistered persons, suggest obtaining a declaration from vendor that he is below the threshold limit/exempt from GST registration. (with PAN) 
  20. Refund with payment of tax enabled from October 2024 w.r.t EOU, EPCG, AA transactions which previously were restricted under Rule 96(10) which was omitted without a savings clause.
  21. Verify electronic credit ledger to identify any ITC reversals / freezing by dept. for any specific issues.

 

RCM

  1. Accounting of entries passed for transactions covered under reverse charge. Some systems do not allow compound entry in direct expenses (Ex: Freight RCM).
  2. RCM liability on foreign associated enterprises based on provision entry in books.
  3. Analyze GST provisions by verifying expenses:
    • Freight & transportation Payments (even if under 5%, ITC eligible).
    • Residential dwelling by commercial entities for business purposes.
    • Advocate Payments - Legal Expenses
    • Security services (not applicable when provider is body corporate)
    • Renting of motor vehicle from non-body corporates (refer sl 15 in GST Circular 177/09/2022 for clarity). Analyse the difference between renting of vehicle and passenger transportation services. Liability arises only in case of renting.
    • Import of services (with or without consideration) (useful sources - Form 27Q & Form 15CA/CB)
    • Sponsorship/Advertisement & marketing [sponsorship other than by body corporate from Jan 25].
    • Commercial property rentals from unregistered persons, other than to composite dealers.
    • Residential property rentals to registered person (used for business function)
    • Fees & licences to various Governments (by CG/SG/LA only, various exemptions available in NN 12/2017-CTR)
  4. Analyze GST on Section 9(4) expenses – Real estate sector only.
  5. Identify RCM service expenses attributable to 2 or more GSTINs – to be distributed through ISD from April 2025. Liability to be paid in regular GSTIN and then passed on to ISD GSTIN for further distribution. 
  6. RCM liability that is displayed in GSTR 2B. Confirm if appropriate and discharged accordingly. If not, communicate with the taxpayer to amend his return.
  7. Rule 47A (Introduced Nov’24 onwards) – Self-invoice to be raised within 30 days. ITC could be restricted now to such time limit + s16(4) timeline. This overcomes Circular 211 which allowed for raising of self-invoice on a delayed basis and thereby enabled credit for past periods.
  8. Verify RCM liability in terms of GSTR 2B. If any entries are not applicable, ensure vendor amends record/ raise dispute through GST portal (communication with taxpayers).
  9. All RCM paid is not automatically eligible for ITC. ITC may be blocked under GST law or partially eligible where it is used for taxable and non-taxable activities.
  10. RCM-related turnover would not form part of the aggregate turnover for computation under GST law.

 

Note – GST returns for a FY can be amended with above corrections/deletions or modification latest by 30th November 2026, i.e. October 2026 GST returns.

 

Others

  1. Section 74A applicable from FY 2024-25 onwards, done away with section 73 & 74.
  2. Due date to issue Order for FY 2021-22 passed as on 31st December 2025 & for FY 2022-23 the due date to issue order is 31st December 2026 (s73). Where SCN is raised under s74, there must be clear reasons for wilful mistatement, fraud, etc.
  3. Empowerment to Regularize Tax Discrepancies/Interpretational Ambiguities vis-à-vis Industrial practice. Representations from Industry/Taxpayers/Association may help model the law based on business functions through Section 11A.
  4. Filing of application for refund claims. Time limit to be considered. Where it is tax inadvertently paid, now not in the nature of ‘tax’, time limit may not apply.
  5. Stay updated on the GST portal for notices/dept. communications. Ignoring the same could have gross consequences.
  6. Ensure mobile no. & email ID on GST portal is functional and valid to avoid miscommunications.
  7. Ensure Aadhar authentication is completed on the GST portal.
  8. Track status of goods sent on job work or goods sent on approval whether all the goods have been received back within the due time period. (1+1 yr inputs/ 3+2 years CG). If not received in time, the invoice must be raised appropriately.
  9. Verify year-end accrual/provision entries for transactions with related parties and evaluate the GST implications. (import of service possibility)
  10. HSN 6-digit level – mandatory requirement from 01.04.2021. Ensure correctness and display in tax invoice. (T/o > Rs. 5 cr). ITC claims being rejected based on HSN usage.
  11. Obtaining GST registration in other States where supplies are made. Compliance with concept of fixed establishment, supply, etc.
  12. Interest to be paid on utilization of ITC only, that too at 18% p.a.
  13. Tax paid under protest (pre-notice/dept. visit); ITC reversed under protest – ensure documentation of letter of protest.
  14. Documentation of notices, letter cover, replies/responses (mail + RPAD) in a separate correspondence file.
  15. Maintain data of inward, outward, RCM, EWB, documents (tax invoice, e-inv, vouchers, etc.) for 6 years from annual return due date of FY (ex: for FY 25-26 6 years from 31-12-2026).
  16. Annual RoDTEP return - FY 23-24 (with composition fees of Rs. 15,000) and FY 24-25 both due by 31st March 2026
  17. Start with new series for Invoices/documentation for the new FY 26-27.
  18. Verify applicability - B2C dynamic QR code (AATO > INR 500 cr).
  19. Returns not filed for 3 consecutive years – cannot be filed now.
  20. GST returns are expected to implement hard locking of GSTR 3B Outward tables (linked to GSTR  1) and subsequently ITC tables (linked to IMS>GSTR 2B). Ensure appropriate filing on monthly basis.  

 

Conclusion

The burden of proof is directly proportional to GST compliance now. This helps avoid/dispute departmental notices and ensure the taxpayer can focus on his business.

Acknowledge CA Chandana Reddy for contribution towards this article

 

Suggestions or feedback can   be sent to [email protected] or [email protected]

 

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