As the financial year draws to a close, businesses must prioritize GST compliance to avoid potential issues and ensure smooth operations. This checklist provides actionable steps for seamless compliance.
1. Sales Reconciliation
- Compare GSTR 3B and GSTR 1: Identify any differences in outward liability. Resolve discrepancies promptly.
- Align GSTR 3B with Books: Ensure total taxable supply in GSTR 3B matches your financial records.
2. Input Tax Credit (ITC) Reconciliation for FY 2024-25
- Reconcile ITC claims in Books/GSTR 3B with GSTR 2B to confirm accuracy.
- Verify that the ITC closing balance in the Electronic Credit Ledger matches your books.
- Record ITC utilization for FY 2024-25 consistently.
- Confirm that all import ITC entries are reflected in GSTR 2A/2B.
- Avoid availing blocked ITC on ineligible items, such as motor vehicles for personal use or works contracts for immovable properties.
- Perform the annual reversal of ITC under Rule 42 of the CGST Rules, 2017, where applicable.
- Reverse ITC in GSTR 3B for March 2025 if supplier payments exceed 180 days.
3. Reverse Charge Mechanism (RCM) Compliance
- Match RCM liability in books with payments made in GSTR 3B.
- Reconcile RCM liability in GSTR 2B with GSTR 3B payments.
- Claim eligible RCM ITC and ensure self-invoices support such claims.
- Verify compliance with RCM rules for specific services like legal or sponsorship services.
4. Letter of Undertaking (LUT) Application
- Apply for LUT on the GST portal for FY 2024-25 to facilitate tax-free exports.
5. Refund Claims
- File refund claims within the two-year limit specified under GST regulations.
6. Advances in Service Supply
- Confirm GST payment at the time of receiving advances for services.
7. Composition Scheme
- Opt in or out of the Composition Scheme for FY 2024-25 by submitting Form GST CMP 03 before March 2025.
8. QRMP Scheme
- Decide by April 30, 2025, whether to opt for the QRMP scheme for Q1 of FY 2025-26.
9. E-Invoicing and QR Code Applicability
- Check e-invoicing or QR code applicability for your business and comply accordingly.
10. Invoice Series
- Implement a new invoice series for FY 2024-25 as per GST rules (up to 16 characters).
11. Late Fees and Penalty Review
- Address any pending late fees or penalties related to GST filings.
12. GST Registration Updates
- Ensure GST registration details, including business locations, are accurate.
13. HSN Code Accuracy
- Verify correct HSN code reporting based on your turnover slab.
14. GST Rate Adjustments
- Confirm that any GST rate changes are correctly reflected in your billing systems.
15. Annual Return Preparation
- Begin preparing GSTR 9 and GSTR 9C (if applicable) to meet the December 31, 2025, deadline.
16. Monthly and Quarterly Compliance
- Complete monthly filings (e.g., GSTR 1, GSTR 3B) on time.
- Reconcile supplies and ITC quarterly to identify errors early.
17. Record Maintenance
- Retain required documents, including invoices and e-way bills, for six years.
18. Compliance with Blocked Credits
- Ensure no ineligible ITC is claimed, such as those related to personal consumption or composition scheme supplies.
19. RCM-Specific Service Compliance
- Adhere to RCM rules for services like director fees, sponsorships, or goods transport.
Conclusion
By following this checklist, businesses can remain compliant and avoid penalties. Proactive engagement with tax consultants ensures all processes are completed efficiently and accurately.
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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: January 21, 2025