Here is a comprehensive GST Closing Checklist for March 2025, keeping in mind that the Financial Year 2024-25 is ending:
I. Reconciliations:
- Outward Supplies:
- Reconcile the turnover reported in GSTR-1 with GSTR-3B for each month of FY 2024-25. Identify any under or over-reporting of taxable supplies.
- Reconcile the turnover reported in GSTR-1 and GSTR-3B with your books of accounts (sales register). Ensure all outward supplies are correctly reported.
- Reconcile e-way bill data with outward supplies declared in GSTR-1.
- Reconcile e-invoice data with the sales register and GSTR-1 (ensure e-invoices were generated where applicable). If any e-invoices were missed, generate them now and pay applicable GST to avoid penalties.1
- Make necessary amendments in GSTR-1 for any discrepancies. Pay any differential tax liability through Form DRC-03, if applicable, along with interest for late payment.
- Check and report other incomes such as sales of fixed assets and miscellaneous income in the relevant GST returns.
- Reconcile tax paid on advances received for services.
- Ensure realization of export proceeds within one year from the date of invoice for export of services. For goods, ensure export is done within 3 months from the invoice date.
- Verify compliance for supplies to merchant exporters at a concessional rate of 0.1%.
- Input Tax Credit (ITC):
- Match ITC claimed in GSTR-3B with GSTR-2B and your purchase register for FY 2024-25. Identify any mismatches.
- Reconcile your ITC register (as per books) with the Electronic Credit Ledger on the GST portal.
- Review expense ledgers to identify any eligible ITC that might have been missed. For example, GST on bank charges.
- Reverse any ineligible ITC that was claimed, including ITC on exempt supplies, goods/services for personal use, and blocked credits as per Section 17(5) of the CGST Act. Ensure these reversals are done in the GSTR-3B for March 2025 to avoid interest implications.
- Check for any ITC that was not claimed due to supplier non-compliance (suppliers not filing their GSTR-1 or GSTR-3B). Follow up with vendors for any missing invoices or incorrect details that are blocking ITC claims.
- Reverse ITC if payment has not been made to the supplier within 180 days from the date of the invoice.
- Verify ITC for capital goods and ensure proper accounting of depreciation including the GST component.
- Reconcile import-related ITC by comparing Bills of Entry (BOE) from ICEGATE with import invoices and GSTR-3B/GSTR-2B.
- Reverse Charge Mechanism (RCM):
- Identify all transactions where RCM is applicable during FY 2024-25.
- Ensure GST was paid under RCM, and the corresponding ITC (if eligible) was claimed in GSTR-3B.
- Reconcile RCM invoices with GSTR-2B where applicable.
- Cross-check payment dates, tax amounts, and the timing of ITC claims for RCM transactions.
- Electronic Cash Ledger:
- Reconcile the cash balance as per your books of accounts with the balance in the electronic cash ledger on the GST portal.
- GST Payments:
- Verify that all GST liabilities for FY 2024-25 have been fully paid before the due dates, including payments for RCM.
- Ensure any pending interest or late fees (if applicable) are paid.
- Reconcile GST payments made throughout the year to verify that all taxes due have been paid correctly.
- Credit and Debit Notes:
- Ensure all credit and debit notes issued during FY 2024-25 have been correctly accounted for in your GST returns (GSTR-1 and consequently in GSTR-3B). Credit notes for the previous financial year should ideally be issued and reported before the due date of filing the annual return (though it’s good practice to finalize this by March).
- Stock:
- Conduct a physical stock count as of March 31, 2025.
- Reconcile the physical stock with your accounting records.
- Adjust any discrepancies with proper documentation.
- Reverse ITC on unsold goods if applicable under Rule 42 & 43.
- Verify ITC reversal for expired or obsolete stock.
- TDS/TCS Credit:
- Reconcile any GST TDS and TCS credit availed during the financial year with the corresponding details available on the GST portal.
II. Filings and Other Compliance:
- Letter of Undertaking (LUT): If you are involved in zero-rated supplies (exports or supplies to SEZs) without paying IGST, file a Letter of Undertaking (LUT) in Form RFD-11 for FY 2025-26 before March 31, 2025. Failure to do so may require you to pay IGST on such supplies and then claim a refund.
- Opting for Composition Scheme: If your aggregate turnover in FY 2024-25 is within the prescribed limit and you wish to opt for the Composition Scheme for FY 2025-26, file an intimation in FORM GST CMP-02 on the GST portal before March 31, 2025.
- Quarterly Return Monthly Payment (QRMP) Scheme: Taxpayers with an aggregate turnover of up to ₹5 crore can opt in or out of the QRMP scheme for FY 2025-26. The selection for the first quarter (April-June 2025) can be done between February 1, 2025, and April 30, 2025. However, it’s good to decide and take action in March itself.
- Goods Transport Agency (GTA) Declaration: If you are a GTA and wish to opt for the Forward Charge Mechanism (FCM) instead of the Reverse Charge Mechanism (RCM) for FY 2025-26, you need to file a declaration (Annexure V) on the GST portal by March 31, 2025. Recipients of GTA services should also collect declarations from GTAs opting for FCM.
- GST Amnesty Scheme: If you have any pending GST dues related to demand orders under Section 73 for FY 2017-18, 2018-19, and 2019-20, the last date to pay the full tax demanded to avail the waiver of interest and penalty under the Amnesty Scheme is March 31, 2025. The application in FORM GST SPL-01 or SPL-02 needs to be filed by June 30, 2025.
- Input Service Distributor (ISD) Registration: If you have common input services and need to distribute the ITC to your distinct units, ensure you have the mandatory ISD registration before April 1, 2025, as it becomes mandatory from this date. If already registered, ensure ITC is correctly distributed.
- Reset Invoice Series: Ensure that you start a new and unique invoice series for all your invoices, credit notes, debit notes, and bills of supply from April 1, 2025. The invoice series should ideally have a maximum of 16 alphanumeric characters.
- E-invoicing Applicability: Re-assess your aggregate turnover for FY 2024-25 to determine if e-invoicing will be applicable to you from April 1, 2025. If your turnover exceeds ₹5 crore in FY 2024-25, e-invoicing will be mandatory. Ensure your systems are ready for e-invoice generation. Also, note the advisory regarding generating e-invoices within 30 days for taxpayers with a turnover of ₹10 crore or above in the previous financial year.
- E-way Bill Applicability: Review your transactions to ensure compliance with e-way bill requirements for the transportation of goods valued above ₹50,000.
- Pending GST Notices and Replies: Address any pending GST notices, show-cause notices, or demand orders received from the GST department before the financial year ends.
- GST Refunds: Review any potential GST refund claims for excess ITC, exports, or inverted duty structure and ensure that they are filed within the stipulated time (generally two years from the relevant date). Verify export documentation and LUT status for refund claims related to exports.
- GST Rate Changes and Amendments: Ensure you are aware of any GST rate changes or amendments that were effective during FY 2024-25 and that they have been correctly implemented in your transactions and returns.
- Books of Accounts and Record Keeping: Ensure all GST-related records (invoices, debit/credit notes, payment vouchers, refund vouchers, returns filed, etc.) are maintained as per the GST law. These records must be preserved for at least six years from the due date of filing the annual return for the relevant financial year.
- Physical Verification of Inventory: Conduct a physical stock count as of March 31, 2025, and reconcile it with your books of accounts.
- Payment to MSMEs: While not strictly GST-related, review outstanding payments to Micro and Small Enterprises (MSEs) registered under UDYAM and ensure timely payments as per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
- RoDTEP Returns: If applicable, file the annual Return of Duties and Taxes on Exported Products (RoDTEP) for FY 2023-24 by March 31, 2025 (or by June 30, 2025, with a late fee of ₹10,000).
- Update IEC: Update your Importer-Exporter Code (IEC) on the Directorate General of Foreign Trade (DGFT) portal between April and June 2025.
- Multi-Factor Authentication for e-way bill/E-invoice: Be aware that Multi-Factor Authentication (MFA) will be mandatory for logging into the e-way bill and e-invoice systems from April 1, 2025. Ensure you are prepared to use OTP via SMS, the ‘NIC-GST-Shield’ app, or the ‘Sandes’ app for login.
III. Annual Return and Reconciliation Statement:
- Prepare for filing GSTR-9 (Annual Return) for FY 2024-25, which is due by December 31, 2025 (unless extended). The reconciliations done in March 2025 will be crucial for accurately preparing this return.
- If your aggregate turnover exceeds ₹5 crore, you will also need to prepare and file GSTR-9C (Reconciliation Statement), which requires a GST audit. The due date is also December 31, 2025.
By diligently following this checklist, you can ensure a smooth and compliant closure of GST for March 2025 and the financial year 2024-25. Remember to keep all supporting documents properly organized for future reference and audits.
