Financial Year 2025–26 | A Comprehensive Guide for Businesses & Tax Professionals
CA Jagdeep Garhwal 7March 2026 Goods & Services Tax Articles
As FY 2025–26 draws to a close, GST compliance demands meticulous attention. Year-end is a critical juncture — mismatches, missed filings, and unclaimed credits can translate into significant penalties, interest costs, and cash-flow disruptions. This comprehensive checklist helps businesses and tax professionals systematically close out the financial year with zero gaps.
| Key Deadline Alert: The most critical GST year-end activity window runs from April 1 to September 30, 2026 — the last date to rectify FY 2025–26 errors in GSTR-3B and claim missed ITC under Section 16(4). |
1. GSTR Return Filing — Status Verification
Ensure all returns for FY 2025–26 are filed, reconciled, and free of errors before the year closes. Missing or late returns attract late fees and block ITC for recipients.
| Monthly / Quarterly Returns — Filing Checklist |
| ☐ GSTR-1: All months (Apr 2025 – Mar 2026) filed — verify nil returns where applicable |
| ☐ GSTR-3B: All months filed; cross-verify tax paid vs. liability declared in GSTR-1 |
| ☐ GSTR-2B auto-populated data reviewed for each month; discrepancies noted |
| ☐ QRMP scheme taxpayers: IFF (Invoice Furnishing Facility) filed for Q1, Q2, Q3, Q4 |
| ☐ GSTR-9 (Annual Return): Prepare & reconcile data — due by December 31, 2026 |
| ☐ GSTR-9C (Reconciliation Statement): Applicable if aggregate turnover > ₹5 crore |
| ☐ CMP-08 (Composition taxpayers): Quarterly statements filed for all 4 quarters |
| ☐ GSTR-7 (TDS deductors) & GSTR-8 (TCS collectors): All monthly filings completed |
| ☐ Verify auto-populated GSTR-2B for Apr 2025 – Mar 2026 for ITC eligibility |
2. Input Tax Credit (ITC) Reconciliation
ITC reconciliation is arguably the most consequential year-end activity. Unclaimed or incorrectly claimed ITC affects both cash flow and legal exposure. Section 16(4) of the CGST Act bars ITC claims after the September return of the next financial year.
| ITC Action Items — Column A | ITC Action Items — Column B |
| ☐ Match GSTR-2B ITC vs. books of accounts for all 12 months | ☐ Verify ITC on capital goods — proportionate credit under Rule 43 |
| ☐ Identify and follow up on missing invoices from suppliers | ☐ Check blocked credit u/s 17(5): motor vehicles, personal use, food, health |
| ☐ Reverse ITC on goods/services used for exempt supplies (Rule 42/43) | ☐ Ensure ITC on import of goods reconciles with ICEGATE / Bill of Entry data |
| ☐ Reverse ITC on goods written off, lost, or destroyed | ☐ ITC claimed by recipient matches outward supply filed by supplier in GSTR-1 |
| ☐ Check ITC reversal on non-payment to suppliers beyond 180 days | ☐ Verify ITC for job work materials sent / received (Form ITC-04 compliance) |
| ☐ Re-claim reversed ITC once supplier payment is made | ☐ Year-end provisional ITC claims: ensure finalisation before September 2026 |
3.Outward Supply & Liability Reconciliation
Reconciliation of outward supplies between your accounting records and GST returns is essential to identify undetected leakages or over-declarations.
| Outward Supply Reconciliation Tasks |
| ☐ Reconcile GSTR-1 figures vs. books of accounts — gross turnover, taxable turnover, tax collected |
| ☐ Verify tax collected on advances and its adjustment upon invoice issuance |
| ☐ Check credit notes / debit notes issued — reported correctly in GSTR-1 Table 9B |
| ☐ Export invoices: verify LUT/Bond validity; zero-rated supplies correctly classified |
| ☐ E-invoicing compliance: all B2B invoices above threshold generated via IRP portal |
| ☐ HSN Summary (Table 12 of GSTR-1): verify HSN-wise reporting for March 2026 |
| ☐ Reconcile e-way bill data with GSTR-1 outward supply details — flag mismatches |
| ☐ Reverse charge mechanism (RCM): all inward supplies from unregistered dealers declared |
| ☐ Identify any supplies wrongly treated as exempt or non-GST — rectify before year-end |
| ☐ Verify GST on related-party transactions at open market value (Rule 28) |
4. Annual Return (GSTR-9) — Preparation Checklist
| 📅 Due Date: GSTR-9 for FY 2025–26 is due by December 31, 2026. Start preparation early — data gaps from Q1 are harder to reconstruct months later. |
| GSTR-9 Data Collection & Validation |
| ☐ Compile turnover data: taxable, nil-rated, exempt, non-GST, and zero-rated separately |
| ☐ Aggregate ITC availed across all GSTR-3B filings vs. GSTR-2B for the full year |
| ☐ Identify ITC reversed during the year — RCM payable but not paid, Rule 42/43 reversals |
| ☐ Taxes paid table: IGST, CGST, SGST/UTGST, cess — match to GSTR-3B monthly data |
| ☐ Reconcile HSN-wise summary of inward supplies for GSTR-9 Table 18 |
| ☐ Refunds: amounts claimed, pending, and sanctioned during FY 2025–26 |
| ☐ Demands and arrears: any outstanding demand orders to be reflected in GSTR-9 |
| ☐ Late fees paid: verify against actual filing dates for each return in the year |
5. Reconciliation With Financial Statements
Your GST data must reconcile with audited financial statements. Divergences often arise from accounting policy differences, timing of recognition, or treatment of GST on certain transactions.
| Reconciliation Area | Key Risk / Gap | Action Required |
| Turnover | Timing difference: revenue recognition vs. invoice date | Adjust for advances, deferred revenue, unbilled revenue |
| ITC in Books | ITC claimed but not appearing in GSTR-2B | GSTR-2B vs. ledger match; provisionally claimed ITC to be regularised |
| GST Payable | Reversal entries not reflected in GSTR-3B | Cross-check monthly liability; pay differential with interest |
| Expenses & RCM | RCM liability not disclosed on certain expenses | Review import of services, GTA, legal fees, etc. |
| Fixed Assets | ITC on capital goods — partial credit per Rule 43 | Maintain asset register with ITC apportionment details |
| Creditor Ageing | ITC reversal missed for invoices unpaid > 180 days | Run ageing report; reverse and reclaim ITC systematically |
6. Refund Management
Year-end is the right time to assess pending and prospective GST refund claims, particularly for exporters, inverted duty structure cases, and excess cash ledger balances.
| Refund Checklist |
| ☐ Export refunds (zero-rated supplies): file RFD-01 for all eligible shipping bills / invoices |
| ☐ Inverted duty structure refunds: calculate ITC accumulation per Section 54(3) |
| ☐ Excess cash ledger balance: apply for refund if balance is unlikely to be utilised |
| ☐ Refund applications filed but pending: track status on GST portal; respond to queries promptly |
| ☐ Ensure FIRC / BRC available for export of services refund claims |
| ☐ Verify that zero-rated supplies are backed by valid LUT for FY 2025–26 and FY 2026–27 |
| ☐ LUT renewal for FY 2026–27: file on GST portal before April 1, 2026 |
| ☐ Rejected refund orders: evaluate appeal timelines and fresh applications |
7. E-Invoicing & E-Way Bill Compliance
| E-Invoicing Checklist | E-Way Bill Checklist |
| ☐ Verify e-invoicing applicability threshold for FY 2025–26 | ☐ E-way bills generated for all inter-state supplies > ₹50,000 |
| ☐ All B2B invoices above ₹5 crore threshold generated via IRP | ☐ E-way bill data reconciled with GSTR-1 and GSTR-3B |
| ☐ IRN (Invoice Reference Number) captured in records | ☐ Expired e-way bills: check for any outstanding disputes |
| ☐ E-invoicing for export invoices and credit notes — compliant | ☐ Consolidated e-way bills for bulk movement — compliant |
| ☐ QR code mandatory on B2C invoices (if applicable) — verified | ☐ Transporter ID updated in all outward supply e-way bills |
8. Notices, Audits & Litigation
Any pending notices or audit proceedings should be reviewed and tracked as part of the year-end exercise. Unaddressed notices can escalate into adjudication and recovery proceedings.
| Notice & Litigation Tracker Tasks |
| ☐ Review all GST notices received during FY 2025–26 — ASMT-10, DRC-01, DRC-01A, SCN |
| ☐ Ensure timely replies filed for all show-cause notices — check response deadlines |
| ☐ Track departmental audit (Section 65) proceedings — documents submitted, hearing attended |
| ☐ Special audit (Section 66): expert assessor report and response filed |
| ☐ Demands confirmed: deposit under protest or file appeal before due date |
| ☐ Appeal before Appellate Authority: track hearing dates and pre-deposit compliance |
| ☐ Refund rejection orders: evaluate appeal under Section 107 within 3 months |
| ☐ Prosecution matters: ensure legal counsel engaged for Section 132 cases |
9. Registration & Profile Management
| GST Registration Hygiene Checklist |
| ☐ Principal place of business address correct and updated on GST portal |
| ☐ Additional places of business registered if new godowns / offices opened during the year |
| ☐ Directors, partners, authorised signatory details — current and updated |
| ☐ Digital Signature Certificates (DSC) renewed and valid for e-filing |
| ☐ Bank account details verified on portal; cancellation of old/closed accounts |
| ☐ Amendment applications for any changes during FY 2025–26 filed via Form REG-14 |
| ☐ Cancelled registrations: final return in GSTR-10 filed within 3 months of cancellation |
| ☐ Review composition scheme eligibility for FY 2026–27; opt in/out via Form CMP-02 by March 31 |
10. Inter-State Supplies, SEZ & Special Transactions
| Inter-State & Import/Export | SEZ & Specialised Transactions |
| ☐ IGST correctly applied on all inter-state B2B supplies | ☐ SEZ supply invoices: zero-rated; endorsed by proper officer |
| ☐ Place of supply determined correctly for service transactions | ☐ High seas sale documentation and GST treatment reviewed |
| ☐ Cross-border transactions: import of services under RCM declared | ☐ Works contract classification reviewed: immovable vs. movable |
| ☐ GST on OIDAR services received from outside India — complied | ☐ Voucher / gift card GST treatment correctly determined |
| ☐ Stock transfers between branches — GST applied if distinct persons | ☐ Non-monetary consideration transactions valued correctly |
11. Key Dates — FY 2025–26 Year-End Calendar
| Date | Activity | Applicable To |
| Mar 31, 2026 | Last date to opt into/out of Composition Scheme | Regular taxpayers |
| Mar 31, 2026 | LUT filing for zero-rated supplies in FY 2026–27 | Exporters |
| Apr 11, 2026 | GSTR-1 for March 2026 | Monthly filers |
| Apr 13, 2026 | GSTR-1 for Q4 (Jan–Mar 2026) | QRMP / Quarterly filers |
| Apr 20, 2026 | GSTR-3B for March 2026 | Monthly filers |
| Apr 22–25, 2026 | GSTR-3B for Q4 2025–26 | QRMP filers |
| Jun 30, 2026 | GSTR-4 Annual Return — Composition taxpayers | Composition dealers |
| Sep 30, 2026 | Last date to rectify FY 2025–26 errors in GSTR-3B | All registered taxpayers |
| Sep 30, 2026 | Last date to claim ITC for FY 2025–26 (Sec 16(4)) | All registered taxpayers |
| Dec 31, 2026 | GSTR-9 & GSTR-9C — Annual return filing | All regular taxpayers |
12. Common Year-End Errors to Avoid
| Common Mistake | Consequence & Remedy |
| ITC claimed in books but not in GSTR-2B | Excess ITC claim — attracts demand + 24% interest. Match and adjust before Sep 30. |
| Missed RCM liability on import of services | Tax + interest + penalty. Declare in GSTR-3B and pay cash; avail ITC in same month. |
| GSTR-1 vs GSTR-3B mismatch | Triggers auto-scrutiny notices. Rectify in April 2026 return. |
| ITC not reversed on 180-day non-payment | Interest liability from date of ITC availed. Reverse and reclaim on payment. |
| LUT not renewed for FY 2026–27 | Exports become taxable; refund route required. Renew before March 31, 2026. |
| Advance received — GST not paid | Demand + interest. Issue receipt voucher and pay GST in month of receipt. |
| Credit notes issued post-September cut-off | ITC reversal by recipient not possible — supplier bears the cost. Issue before cut-off. |
| 💡 Final Word
A disciplined year-end GST review protects working capital, avoids penalties, and prepares your business for a seamless FY 2026–27 start. Begin early, reconcile systematically, and consult a qualified GST practitioner for complex transactions.
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