GST Year-End Checklist: 15 Things Every Business Must Do Before March 31

The GST financial year runs from April 1 to March 31, and year-end reconciliation is not optional. Every GST-registered business must complete ITC reconciliation, reverse ineligible credits, ensure returns match books of accounts, renew export documentation, and prepare the groundwork for annual return filing. This checklist covers 15 critical GST tasks to complete before March 31, 2026, with step-by-step procedures, common pitfalls to avoid, and the penalty consequences of each missed item.

Task 1: ITC Reconciliation with GSTR-2B

The single most important GST year-end task is reconciling your ITC claims with GSTR-2B data. GSTR-2B is the auto-generated statement showing ITC available based on your suppliers' GSTR-1 filings. Any ITC you claimed on invoices not appearing in GSTR-2B is at risk of denial during assessment.

Step-by-Step Reconciliation Process

1. Download GSTR-2B for April 2025 to February 2026 from the GST portal (Table 3: ITC available, Table 4: ITC not available)
2. Export your purchase register from the accounting software for the same period
3. Match GSTIN, invoice number, invoice date, and taxable value for each entry
4. Identify mismatches: invoices in books but not in 2B (vendor hasn't filed), invoices in 2B but not in books (missed recording), and amount differences
5. Contact vendors for missing invoices and get them to file/amend their GSTR-1
6. Reverse ITC on invoices that cannot be reflected in GSTR-2B by the GSTR-9 deadline

Task 2: Rule 42 and Rule 43 ITC Reversal

If your business makes both taxable and exempt supplies (including zero-rated supplies and non-GST supplies), you must reverse proportional ITC on inputs, input services, and capital goods used commonly.

Rule 42: Inputs and Input Services

The annual Rule 42 reversal formula:

• Common ITC = Total ITC − ITC exclusively for taxable supplies − ITC exclusively for exempt supplies − ITC on blocked items (Section 17(5))
• ITC to reverse = Common ITC × (Exempt turnover + Non-business use) ÷ Total turnover
• Annual adjustment = Compare monthly provisional reversals with the annual figure; pay the difference if under-reversed

Rule 43: Capital Goods

For capital goods used for both taxable and exempt supplies:

• Useful life = 60 months (5 years) from date of invoice
• ITC per quarter = Total ITC on capital good ÷ 60 × months in the quarter
• ITC to reverse per quarter = ITC per quarter × (Exempt turnover ÷ Total turnover)
• Annual adjustment applies at year-end

Task 3: GSTR-1 and Sales Register Reconciliation

Reconcile GSTR-1 (outward supplies reported to government) with your books of accounts for all 12 months. Key items to check:

Task 4: LUT Renewal for Exporters

Every exporter supplying goods or services without payment of IGST must have a valid Letter of Undertaking (LUT). The current LUT expires on March 31, 2026.

Renewal Steps

1. Login to GST portal → Services → User Services → Furnish LUT
2. Select FY 2026-27 as the year for which LUT is being furnished
3. Fill in bond amount and bank guarantee details (if applicable)
4. Submit Form GST RFD-11 through DSC or EVC
5. Download the acknowledgement for records

Task 5: E-Way Bill Reconciliation

E-way bill data is increasingly used for cross-verification during GST audits and assessments. Before March 31, reconcile:

• E-way bills generated vs invoices raised: Identify e-way bills without corresponding invoices (suggests goods movement without billing)
• Invoices above ₹50,000 without e-way bills: These should have e-way bills for goods movement
• Cancelled e-way bills: Verify cancellation reasons and corresponding invoice adjustments
• Branch transfer and job work e-way bills: Ensure delivery challans and job work returns are documented

Task 6: RCM Liability Verification

Reverse Charge Mechanism (RCM) transactions are frequently missed during regular return filing. Before year-end, verify all RCM-liable transactions are correctly identified, GST paid, and ITC claimed:

• Legal services: GST on advocate/law firm fees paid under RCM by any business entity
• GTA (Goods Transport Agency): If GTA did not opt for forward charge, RCM applies
• Import of services: All services received from outside India
• Rent from unregistered persons: Commercial property rent from unregistered landlords
• Government services: Services received from government departments
• Insurance agents: Commission paid to insurance agents

Task 7: E-Invoice Reconciliation with GSTR-1

For businesses required to generate e-invoices, verify that all e-invoices are correctly reflected in GSTR-1. Known issues include:

• Auto-population delays: E-invoices generated close to the GSTR-1 filing date may not auto-populate
• Cancelled e-invoices: Cancelled IRNs should not appear in GSTR-1; verify removal
• Amended invoices: E-invoices cannot be amended on IRP; verify credit notes are issued and reported
• Threshold invoices: Invoices below the e-invoice threshold (currently ₹5 crore aggregate turnover threshold, changing to lower limits from April 2026) should be separately reported

Task 8: HSN Code and Tax Rate Verification

Review your HSN/SAC code mapping for all product and service lines. From April 1, 2026:

• Businesses with turnover above ₹5 crore: Report 6-digit HSN codes in GSTR-1
• Businesses with turnover up to ₹5 crore: Report 4-digit HSN codes
• Verify tax rates: Check for any GST Council notifications during the year that changed rates for your product/service categories

Task 9: GSTR-3B and GSTR-1 Cross-Reconciliation

The GST department routinely compares GSTR-3B (summary return with tax payment) and GSTR-1 (invoice-level details). Differences trigger automated notices. Before year-end, reconcile:

Task 10: GST Refund Claim Review

Before March 31, review all pending and eligible GST refund claims:

• Export refunds: ITC accumulated on zero-rated supplies (make within 2 years of export date)
• Inverted duty structure: Where input tax rate exceeds output tax rate
• Electronic cash ledger excess: Any over-deposit in the cash ledger
• Pre-deposit refund: For dismissed appeals, apply for pre-deposit refund

Tasks 11–15: Additional Year-End GST Items

Task 11: Composition Scheme Review

If you are under the composition scheme, verify your aggregate turnover stays within ₹1.5 crore (₹75 lakh for services). If you exceeded the limit during the year, you must opt out and register as a regular taxpayer from the next financial year.

Task 12: GST Registration Details Update

Verify all registration details are current: business address, authorised signatory, bank accounts, additional places of business, and nature of business activity. Outdated details create compliance issues during audits.

Task 13: Job Work Reconciliation

If you sent goods for job work during the year, ensure: all goods sent are tracked in the job work register, goods returned within one year (inputs) or three years (capital goods) from date of dispatch, and applicable GST is paid on goods not returned within the time limit.

Task 14: ISD (Input Service Distributor) Reconciliation

For businesses with ISD registration, verify that ITC distributed to branches matches the methodology prescribed under the GST law (pro-rata based on turnover). Over-distribution or under-distribution must be corrected before annual returns.

Task 15: Document and Record Keeping

Ensure all GST records are preserved: invoices, debit/credit notes, e-way bills, e-invoices, payment proofs, bank statements, import/export documentation, and refund acknowledgements. Records must be maintained for 72 months (6 years) from the due date of annual return.

Summary

GST year-end compliance is not a single-day activity. Starting reconciliation and verification in early March gives you time to resolve mismatches, communicate with vendors, and correct errors before they crystallize into annual return discrepancies. The 15 tasks in this checklist cover every aspect of GST year-end compliance: ITC reconciliation, Rule 42/43 reversals, LUT renewal, e-way bill verification, RCM compliance, e-invoice reconciliation, HSN code review, cross-return matching, refund claims, and documentation. Complete each task before March 31, 2026, and your GSTR-9 annual return filing later in the year becomes straightforward. For comprehensive GST compliance management, IncorpX handles everything from monthly returns to annual reconciliation.