GST Compliance: End-of-Year Checklist

Introduction

As the fiscal year comes to a close and a new one begins, businesses must complete several Goods and Services Tax (GST) compliance activities to remain compliant and optimize operations. Key tasks include registration updates, invoice management, filing GST returns, and maintaining accurate records. Following these steps ensures legal compliance and streamlines business workflows. Auriga Accounting pvt. ltd. provides expert guidance to make GST compliance simple and hassle-free.

GST Composition Scheme

Eligible taxpayers planning to adopt the Composition Scheme must submit Form CMP-02 via the GST portal before March 31 for the upcoming financial year. Additionally, verify all business locations and update your GST Registration Certificate to reflect any new or closed branches promptly.

Invoice Compliance Guidelines

Ensure your invoicing system is updated and fully compliant with GST regulations to support smooth and uninterrupted business operations.

New Invoice Series
Start a fresh and unique invoice series or serial numbering for the new financial year to avoid duplication with invoices from the previous year. Businesses holding multiple state-wise GST registrations should maintain separate and distinct invoice series for each state.

Invoice Details
GST-compliant invoices must include all mandatory particulars, such as:

GSTIN of the supplier and recipient
Complete addresses of both parties
Place of supply
Applicable GST rate and tax amount
Invoice number (restricted to a maximum of 16 characters)

HSN Codes

Businesses with an aggregate turnover of up to ₹5 crore in the preceding financial year must mention a 4-digit HSN code on invoices.
Entities with turnover exceeding ₹5 crore are required to use a 6-digit HSN code.
E-invoicing is mandatory for businesses with turnover above ₹5 crore, and all e-invoices must include a 6-digit HSN code.

Adhering to these invoicing guidelines helps ensure GST compliance and minimizes the risk of errors, penalties, or disruptions.

Reverse Charge Mechanism (RCM) Documentation

For transactions covered under the Reverse Charge Mechanism, especially where supplies are received from unregistered persons, maintaining proper documentation is critical:

Self-Invoicing: A self-generated invoice must be issued for every RCM transaction. Failure to do so may invite scrutiny during assessments or audits and could impact the validity of Input Tax Credit (ITC) claims.
Payment Vouchers: A payment voucher must be issued for every payment made to an RCM supplier, irrespective of whether the supplier is registered or unregistered, to ensure accurate records and compliance.

GST Returns and Bookkeeping Guidelines

Maintain accurate books and timely filings by following these GST return and accounting best practices:

Reconciliation of Financials with GST Returns

Match sales turnover, credit notes, and output tax as per your books with the figures reported in GSTR-1 and GSTR-3B for the previous financial year.
Identify and resolve discrepancies between GSTR-1 and GSTR-3B, documenting reasons to address them effectively during audits or assessments.

Input Tax Credit (ITC) Reconciliation

Reconcile ITC as per financial records with the ITC claimed in GSTR-3B and ensure it aligns with GSTR-2B downloaded from the GST portal.
Complete reconciliation of GSTR-2B with GSTR-3B and books by November 30 of the following financial year to correct any unclaimed or excess ITC within the prescribed timelines.

Supplier Confirmations

Follow up with suppliers who have filed GSTR-1 but not GSTR-3B to avoid future ITC disallowances once they file their returns. Retain all correspondence as audit evidence.
For suppliers who have filed GSTR-3B but not GSTR-1, request immediate filing of GSTR-1 so that ITC reflects in your GSTR-2B.
If suppliers have not filed either return, urge them to file both promptly and maintain proper documentation of all communications.

Review of ITC and RCM Liabilities

Review your books for ineligible or wrongly claimed ITC and reverse such credits wherever required.
Verify RCM liabilities recorded in your books and ensure they have been correctly reported in GSTR-3B and paid along with applicable interest, if any.

Addressing Pending Liabilities and Credits

Any unreported output tax liabilities or credit notes relating to the previous financial year must be disclosed by November 30 of the following year or by the date of filing the annual return, whichever is earlier.
Review vendor payments made within 180 days from the invoice date. Reverse ITC where payments remain outstanding and re-claim the ITC once the payment is completed.

GST on Other Income and Asset Sales

Ensure GST compliance on other taxable incomes and the sale of capital assets by paying applicable GST along with interest, if delayed.

Other Key Considerations for GST Compliance

Renewal of Letter of Undertaking (LUT): Exporters supplying goods or services without payment of IGST must renew their LUT at the end of every financial year to continue exports in the next year.
GST Refund Applications: File GST refund claims within the prescribed two-year period to avoid losing refund eligibility.
Filing of ITC-04: Businesses with turnover above ₹5 crore must file ITC-04 semi-annually, while those with turnover up to ₹5 crore must file it annually.
QRMP Scheme Option: Businesses can opt in or out of the QRMP scheme for the first quarter of FY 2024–25 until April 30, 2024.
Maintenance of Records: Ensure all books of accounts, documents, and records are maintained as per GST law requirements.

About the Author

Dakesh

Dakesh simplifies complex legal regulations into clear, actionable guidance, empowering entrepreneurs to stay compliant while building sustainable and scalable businesses.

January 8, 2026