GST Compliance Checklist for FY 2025-26

As we enter FY 2025-26, businesses across India need to gear up for another year of GST compliance. Whether you're running a small enterprise or managing a large corporation, staying on top of GST obligations is critical to avoid penalties, interest, and unwanted scrutiny from tax authorities.

This comprehensive checklist covers all key GST compliance requirements for FY 2025-26, including filing deadlines, ITC reconciliation steps, and common mistakes that can cost your business dearly.

Monthly Compliance Requirements

1. GSTR-1 Filing – Outward Supply Returns

Due Date: 11th of the following month (for monthly filers) or 13th of the month following the quarter (for quarterly filers).

GSTR-1 captures all your outward supplies — sales invoices, credit notes, debit notes, and amendments. Ensure that:

• All B2B invoices are reported with correct GSTIN and invoice details
• B2C invoices above ₹2.5 lakh are individually reported
• Export invoices (with and without payment of tax) are correctly categorized
• HSN/SAC codes are reported as per mandatory rules (4-digit for turnover above ₹5 Cr)
• Credit and debit notes are adjusted in the correct tax periods

2. GSTR-3B Filing – Summary Return and Tax Payment

Due Date: 20th of the following month (for monthly filers) or 22nd/24th for quarterly filers under QRMP scheme.

GSTR-3B is where you report your tax liability and pay the actual GST due. Critical points:

• Reconcile GSTR-3B liability with GSTR-1 data before filing
• Claim only eligible ITC — ensure vendor compliance via GSTR-2B
• Pay interest on delayed payments using the GST portal calculator
• Use the correct tax head (CGST, SGST, IGST) while making payments
• File nil returns even if there's no business activity in the month

3. GSTR-2B – Auto-drafted ITC Statement

GSTR-2B is system-generated and shows all ITC available to you based on supplier uploads. Review this monthly to:

• Identify missing invoices or vendor non-compliance
• Follow up with vendors who haven't filed their GSTR-1
• Reconcile your purchase records with auto-populated ITC

Quarterly Compliance Requirements

ITC-04 – Goods Sent to Job Worker

Due Date: 25th of the month following the quarter

If you send inputs or capital goods to a job worker, you must file ITC-04 to declare the details and track the goods. Non-filing can result in ITC reversal.

CMP-08 – For Composition Scheme Taxpayers

Due Date: 18th of the month following the quarter

Composition dealers must file quarterly returns and pay tax at concessional rates. Ensure accurate turnover reporting to avoid slipping out of the scheme.

Annual Compliance Requirements

GSTR-9 – Annual Return

Due Date: 31st December of the following financial year

Applicability: Businesses with turnover above ₹2 Crore

GSTR-9 is a consolidated annual return that summarizes all your monthly/quarterly filings for the year. It includes:

• Total outward and inward supplies
• ITC claimed and reversed
• Tax paid and refunds claimed
• Amendments made during and after the financial year

GSTR-9C – Reconciliation Statement and Audit

Due Date: 31st December of the following financial year

Applicability: Businesses with turnover above ₹5 Crore

GSTR-9C is a reconciliation statement certified by a Chartered Accountant. It reconciles:

• Turnover as per audited financials vs GST returns
• ITC claimed vs books of accounts
• Tax liability as per books vs GST filings

Critical Deadlines for FY 2025-26

ITC Reconciliation – The Most Critical Task

Input Tax Credit (ITC) is the backbone of GST, and incorrect claims are the #1 reason for GST notices. Follow this reconciliation process monthly:

Step 1: Match Purchase Register with GSTR-2B

Download your GSTR-2B and match it line-by-line with your purchase register. Identify invoices that are:

• Present in books but missing in GSTR-2B (vendor hasn't filed)
• Present in GSTR-2B but missing in books (data entry errors)
• Showing mismatches in amount, GSTIN, or invoice number

Step 2: Follow Up with Non-Compliant Vendors

ITC is only available if your vendor has filed their GSTR-1. Track vendor compliance and follow up immediately if invoices are missing from GSTR-2B.

Step 3: Reverse Ineligible ITC

ITC is not available on:

• Motor vehicles (except for specific business use)
• Food, beverages, outdoor catering
• Membership of clubs, health, and fitness centers
• Personal consumption goods
• Works contract services for immovable property (other than plant & machinery)

Common Mistakes to Avoid in FY 2025-26

1. Not Reconciling GSTR-1 and GSTR-3B

Many businesses file GSTR-1 and GSTR-3B independently without reconciliation. This creates mismatches that are flagged by the GST system and can lead to notices.

2. Claiming ITC Without Verifying GSTR-2B

Don't blindly claim ITC based on your purchase invoices. Always cross-check with GSTR-2B to ensure the vendor has uploaded the invoice.

3. Ignoring Reverse Charge Mechanism (RCM)

Under RCM, the recipient (not the supplier) is liable to pay GST. This applies to:

• Services from unregistered vendors
• Goods transport agency (GTA) services
• Legal and professional services from advocates
• Imports of services

Ensure you identify RCM transactions and pay tax accordingly in GSTR-3B.

4. Late Payment of GST

Interest on late payment is 18% per annum. Even one day of delay attracts interest. Set up reminders and file on time.

5. Not Maintaining Proper Documentation

GST demands rigorous documentation. Maintain:

• Tax invoices with all mandatory fields
• E-way bills for goods movement above ₹50,000
• Bill of supply for nil-rated or exempt supplies
• Credit/debit notes with proper references

Best Practices for Smooth GST Compliance

1. Use Accounting Software with GST Integration

Manual GST filing is error-prone and time-consuming. Use software like Tally, Zoho Books, or ClearTax that auto-generates GST returns from your invoices.

2. Maintain a Monthly Compliance Calendar

Set up automated reminders for all GST due dates. Create a checklist and tick off each compliance task as you complete it.

3. Conduct Quarterly GST Health Checks

Don't wait for the annual audit. Conduct quarterly reviews to identify and fix compliance gaps early.

4. Train Your Accounts Team

GST laws are dynamic. Ensure your team is updated on recent amendments, circulars, and notifications issued by the CBIC.

5. Engage a CA for Complex Transactions

For complex scenarios like export-import, e-commerce, or real estate, consult a GST expert to ensure compliance and optimize tax liability.

What If You Miss a Deadline?

If you miss a GST filing deadline:

• Late Fee: ₹50 per day (₹20 for nil returns) under CGST and SGST each = ₹100 per day
• Interest: 18% per annum on the outstanding tax amount
• ITC Blockage: Your buyers cannot claim ITC on your invoices until you file GSTR-1
• GST Registration Cancellation: Continuous non-filing can lead to suspension or cancellation of GST registration

Final Checklist for FY 2025-26

• ✅ File GSTR-1 by the 11th of every month
• ✅ Review GSTR-2B and reconcile ITC before filing GSTR-3B
• ✅ File GSTR-3B by the 20th and pay all taxes due
• ✅ Track vendor compliance and follow up on missing invoices
• ✅ Reverse ineligible ITC as per GST rules
• ✅ File quarterly returns (ITC-04, CMP-08) on time
• ✅ Prepare for GSTR-9 and GSTR-9C by maintaining proper books
• ✅ Maintain complete documentation for all transactions
• ✅ Conduct quarterly compliance audits
• ✅ Stay updated on GST amendments and notifications

Need Help with GST Compliance?

Managing GST compliance can be overwhelming, especially for growing businesses juggling multiple priorities. CA Keshav Agarwal specializes in GST advisory, compliance, and representation before tax authorities.

Whether you need help with monthly filings, annual reconciliation, or resolving GST notices, we've got you covered.

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