27-Mar-2025 Important points a GST registered taxpayer needs to review in year end March 2025

As the financial year 2024-25 comes to a close and we prepare to step into 2025-26, it is essential for GST-registered taxpayers to complete year-end compliance activities to ensure a smooth transition into the new financial year. Adhering to these key GST requirements will help in avoiding penalties and ensuring seamless operations.

Please find below the important GST compliance tasks that require your attention before the year-end.

1) Billing Series:

Initiate a new and unique billing series for FY 25-26 starting from April 1, 2025 for documents like sale invoices, debit notes, credit notes, RCM self invoices for unregistered supplier.

2)LUT (Letter of Undertaking):

The deadline for furnishing the LUT, essential for businesses involved in zero-rated supply (export of goods or services without IGST payment), is March 31, 2025.

Non-compliance with GST law may lead to severe penalties, so immediate action is advised to either initiate a fresh LUT or renew the existing one.

3)E-invoice:

GST taxpayer whose aggregate turnover exceeds Rs. 5 Crore in any financial year from 2017-18 to 2024-25 is mandatorily required to generate E–Invoice for supply of goods or services or both, or for export.

Effective April 1, 2025, taxpayers with an aggregate annual turnover of Rs. 10 Crore and above will be required to generate e-invoices within 30 days from the date of the invoice. The Invoice Registration Portal (IRP) will not accept e-invoices older than 30 days from the date of reporting. Taxpayers must ensure timely generation of e-invoices to avoid compliance issues and penalties.

4)Amendment in GST certificate:

Registered persons must update the GST portal for any changes in information furnished during registration or thereafter, including legal name, principal place of business, or additional places of business, within fifteen days of such changes. Registering additional places of business on the GST portal is necessary to avoid future litigation.

Any change in director details (like old director resignation, new director appointment, existing director contact details changed, etc) are to be updated on immediate basis. Same goes for any changes required in partner details. 

5)Reconciliation of Sales Turnover:

Reconcile sales turnover reported in GSTR-1, GSTR-3B, and books of accounts with e-invoices and e-way bills for FY 2024-25.

6)Composition Scheme:

Taxable persons with aggregate annual turnover not exceeding Rs. 1.50 crore in the previous financial year may opt for the composition scheme. The effective date to intimate about opting for the scheme using FORM GST CMP-02 is 31 March 2025. 

7)QRMP Scheme:

Taxpayers with aggregate turnover at PAN level up to Rs. 5 crore can opt for quarterly GSTR-1 and GSTR-3B filing and monthly payments. The deadline to opt for the QRMP Scheme filing for FY 2025-26 is April 30, 2025.

8)Reconciliation of ITC:

Reconcile input tax credit between books and GSTR-3B/GSTR-2B. Follow up with suppliers for transactions not reflected in GSTR-2B. Also ensure all transactions reflected in GSTR 2B are recorded in books and due credit is taken. Ensure all ledger balance in books of accounts matches with the GST electronic credit ledger and electronic cash ledger.

9)Ineligible ITC:

Review ITC claims to ensure compliance with provisions regarding ineligible or blocked ITC, including reversals under sections 42 or 43, on exempt supplies, or from canceled or suspended GSTINs.

10)Reversal of ITC for Delayed Payments:

Reverse ITC claimed on invoices if payment to suppliers is not made within 180 days, along with interest. Timely payments to suppliers are crucial to maintain compliance. 

Further if any payment has been made subsequently, which was reversed in current year or previous year, has to be checked so that such ITC can be re-claimed in GSTR 3B. 

11) Export Compliances

Make sure foreign payments for export services (exported without payment of tax under LUT) are received within 1 year from date of invoice to avoid payment of tax and interest. Make sure goods are exported out of India within 3 months of date of invoice to avoid payment of tax and interest. For receipt of foreign remittance, kindly check FIRC copy for services and BRC copy for goods has been received.  

12) ISD and Cross charge applicability

In case of multi-location entities whether or not registered under GST have to analyse applicability of ISD and cross-charge mechanisms. ISD registration, if applicable, to be mandatorily taken from 1st April 2025.

Further if any vendor/ supplier updates their ISD GST number from normal GST number then the systems have to be updated with the same. 

13) IMS (Invoice Management System)

To enable taxpayers to efficiently address invoice corrections/amendments with their suppliers through the portal, a new communication process is being brought at portal. This will also facilitate taxpayer in matching of their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). Kindly ensure to check and reject any not-applicable invoices. If not done then it will be deemed as accepted and then flow to GSTR 2B report.  

We urge you to review these points carefully and take the necessary steps to remain compliant with GST regulations. Timely action will help in avoiding any penalties or compliance issues in the upcoming financial year.

Note: Since GST is a monthly liability, it is recommended to close the books of accounts on a monthly basis, ensuring reconciliation with GSTR-3B. There should be no backdated entries to maintain accuracy and facilitate a smooth review process of transactions.

Should you require any assistance or clarification regarding these matters, please feel free to reach out to us at koral@apmh.in