17-Mar-2026 Key GST Compliances to Ensure Before the Close of the Financial Year

A. Close the Year Right — Ensure Complete GST Compliance

1. 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 2025-26. Verification of outward credit notes rejected by customers through IMS on the GST portal should also be carried out.

2. 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 that all transactions reflected in GSTR-2B are verified and recorded in the books and that due credit is taken.

3. 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 cancelled or suspended GSTINs.

4. 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. Simultaneously, if any such ITC reversal was made earlier and subsequently payment has been made to such supplier, then ITC re-availment to be checked and done accordingly.

5. Export Compliances

• (a) Where a refund has been claimed on account of unutilised Input Tax Credit (ITC) or IGST paid on export of goods, the exporter is required to realise the export proceeds in foreign exchange within 15 months from the date of export. In case the export proceeds are not realised within the prescribed period, the refund granted may be recovered by the department along with applicable interest.

(b) Where exports are made under LUT, goods must be exported within 3 months from the date of invoice. Further, in the case of export of services (under LUT), the payment must be received within one year from the date of invoice. If the export proceeds are not realised within the prescribed time, the exporter is required to pay GST along with applicable interest within 15 days after the expiry of such period. Failure to comply with the above provisions may result in payment of GST along with applicable interest.

6. Reconciliation of GST TDS and TCS:

Ensure that invoices on which GST TDS/TCS has been claimed are correctly reflected in the books of accounts, and that the claim of TDS/TCS returns have been duly accepted on GST portal. The invoices should also be reconciled with the reporting done in GSTR-1.

7. Documentation in relation to sales undertaken at concessional rate (SEZ, Exports, Merchant Exports, etc.):

The complete set of documentation in relation to such sales should be verified and maintained in records in order to avoid penal consequences in case any notice or scrutiny is undertaken by the department.

8. Reconciliation of closing balance of GST as per books with ECL and ECrL:

The final closing balance in the cash ledger and credit ledger on the GST portal should also be reflected in the books of accounts. Any differences should be identified and properly accounted for/reconciled.

B. Proactive GST Compliance Ensures a Smoother Financial Year Ahead

1. 1. Billing Series:

Initiate a new and unique billing series for FY 2026-27 starting from April 1, 2026 (sale invoices, debit notes, credit notes, RCM self-invoices for unregistered suppliers, etc.).

2. LUT:

Taxpayers are required to apply for a Letter of Undertaking (LUT) in Form GST RFD-11 for FY 2026-27 to undertake export of goods/services or supplies to Special Economic Zones (SEZ) without payment of GST. The deadline for furnishing the LUT is March 31, 2026.

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 taxpayers whose aggregate turnover exceeds Rs. 5 crore in any financial year from 2017-2018 to 2025-2026 are required to generate e-invoices for the supply of goods or services or both, or for exports.

Effective April 1, 2025, taxpayers with an aggregate annual turnover (AATO) of ₹10 crore and above are 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 inform the proper officer about any changes in information furnished during registration or thereafter, including legal name, principal place of business, additional places of business, or changes in directors or partners or authorized representatives, within fifteen days of such changes.

5. Composition Scheme:

Taxable persons with aggregate annual turnover in the previous financial year not exceeding Rs. 1.50 crore ( In cases where the supplier is engaged in sale of goods )  /  Rs. 50 lakhs ( in cases where the supplier is engaged in  supply of services ) may opt for the composition scheme. The effective date to intimate opting for the scheme using FORM GST CMP-02 is March 31, 2026. Taxpayers who want to opt for the composition scheme for FY 2026-27 should file Form CMP-02 by navigating to Services → Registration → Application to Opt for Composition Levy.

6. QRMP Scheme:

Taxpayers with aggregate turnover at the PAN level up to Rs. 10 crore can opt for quarterly GSTR-1 and GSTR-3B filing with monthly payments. The deadline to opt for the QRMP Scheme for FY 2026-27 is April 30, 2026.

7. ISD and Cross-charge applicability:

In the case of multi-location entities, whether registered under GST or not, the applicability of ISD and cross-charge mechanisms must be analysed. ISD registration, if applicable, must be mandatorily obtained to avoid any non-compliance.

Further, if any vendor/supplier updates their ISD GST number from a regular GST number, then the systems must be updated accordingly.

8. HSN/SAC:

Examination of the list of HSN/SAC codes applicable and updating the new HSN/SAC on the GST portal. The applicability of the number of digits of the HSN/SAC based on the turnover of the preceding financial year needs to be checked as under:

9. Aadhaar Authentication:

Aadhaar authentication is mandatory for filing refund applications under Rule 89 and Rule 96 of the CGST Rules and also for filing applications for revocation of cancellation of registration under Rule 23. Hence, if Aadhaar authentication of the authorized signatory, i.e., Proprietor/Partner/Director of the entity, is pending, it is advisable to complete the process at the earliest.

We advise you to carefully review the above points and take the necessary steps to ensure continued compliance with GST regulations. Addressing these matters in a timely manner, particularly before the commencement of the new financial year, will facilitate a smooth transition and significantly reduce the risk of future disputes, notices, penalties, or compliance issues.

For any assistance or detailed review, please feel free to reach out to us at info@apmh.in