GST Financial Year-End Checklist: Everything You Need to Do Before March 31, 2025

With March already here, it’s time to wrap up your financial year. When it comes to GST, this is the time to review your records and reconcile your GST returns. You also need to ensure that all necessary filings and adjustments are completed right on time, and you don’t miss out on any crucial timeline given the number of things you will be addressing at this time. Missing any important step can cost you hefty penalties, ITC losses, or even trigger GST audits. To help you avoid any such consequences, here’s a GST year-end checklist covering everything you need to do before closing your books this March 31, 2025.

1. Calculate Your Aggregate Turnover

Before you get to other tasks, start by calculating your aggregate turnover for FY 2024-25. This figure is important as it determines your eligibility for schemes such as the Composition Scheme, e‑invoicing, QRMP, and the applicability of Rule 86B (1% cash payment).

What to do when calculating your turnover:

• Include all supplies: Add up taxable, exempt, and export supplies (minus exclusions as specified by the GST Act).
• Reconcile with your books: Ensure that your turnover figure in GST returns matches your financial statements.
• Opt in or out of schemes: As per the calculated turnover, opt in or out of composition or QRMP schemes.
• Check for e-invoicing applicability for FY 2025-26: If your turnover exceeds ₹5 crore in FY 2024-25, e-invoicing will be mandatory from April 1, 2025.

2. File Your Letter of Undertaking (LUT) for Zero‑Rated Supplies

If you engage in zero‑rated supplies like exporting goods or supplying to Special Economic Zones (SEZs) without paying IGST, you must file a Letter of Undertaking (LUT) in Form RFD‑11 for FY 2025-26 before March 31, 2025. Failure to do so means you will have to pay IGST on such supplies and then apply for a refund.

Here’s how you can review your supplies and file RFD-11:

• Review your zero‑rated transactions: Confirm which supplies qualify as zero‑rated.
• Prepare and file LUT: Complete Form RFD‑11 and submit it on the GST portal by March 31.
• Keep records: Retain a copy of your LUT filing for future reference and audits.
• Ensure refunds are claimed timely: If you have paid IGST on exports in the past year and are eligible for a refund, submit your refund application within two years from the date of export to avoid losing your claim.

3. Reconcile Your GST Returns with Your Books of Accounts and IMS Records

Before you close the financial year, make sure your GST returns match your books of accounts and IMS records as well. Any mismatches or errors can create major issues during audits or annual return filing.

Here’s what you need to check:

• Match GSTR‑1, GSTR‑3B, and GSTR‑9 with your sales register to ensure all outward supplies are correctly reported.
• Compare GSTR‑2B with your purchase register to confirm that the Input Tax Credit (ITC) you claimed aligns with what your suppliers have reported.
• Reconcile GST payments made throughout the year to verify that all taxes due have been paid correctly.
• Check credit notes and debit notes: Ensure all adjustments have been reported correctly in your GST returns.

4. Claim Any Pending ITC Before March 31

Even though the deadline for claiming ITC for FY 2024-25 extends until October 20, 2025 (for monthly filers) or October 22/24, 2025 (for QRMP filers), it’s best to finalize your ITC claims by March 31, 2025. This ensures that your records are accurate before the new financial year begins.

What you need to do:

• Check for any unclaimed ITC in your purchase register and compare it with GSTR‑2B.
• Follow up with vendors for any missing invoices or incorrect details that are blocking ITC claims.
• Reverse ITC if required for non‑payment to suppliers beyond 180 days.
• Review blocked ITC: Identify any ITC that may be ineligible under Section 17(5) and ensure it is not claimed incorrectly.

5. Reset Your Invoice Number Series for the New Financial Year

Starting from April 1, 2025, you need to reset your invoice number series to maintain clarity and avoid any overlap with previous years’ invoices.

Here’s how to do it right:

• Choose a consistent format: For example, you might use “FY25-26/INV/001”. This format clearly indicates the financial year and makes it easier to track transactions.
• Keep it distinct: Ensure that the new series does not overlap with any numbers from the previous year. This prevents accidental duplications to your records.
• Update your systems: Whether you’re using accounting software or manual logs, update your invoice templates and inform all relevant departments about the new numbering system.

6. Review Your Reverse Charge Mechanism (RCM) Liabilities

Transactions under the Reverse Charge Mechanism (RCM) require extra attention because you’re responsible for paying GST directly to the government. This can include services like legal fees, transportation from unregistered suppliers, or imports of services.

To review all your RCM transactions:

• Identify RCM transactions: Go through your purchase records and highlight all transactions where the supplier is unregistered or where the law mandates RCM.
• Confirm payment: Make sure you have paid the GST on these transactions and that the amounts are accurately reported in your GSTR‑3B.
• Claim available ITC: Where applicable, check if you can claim ITC on these payments, provided you meet the eligibility criteria.
• Keep documentation handy: Maintain clear records and self‑invoices for RCM transactions so that you’re prepared in case of audits.

7. Calculate Annual ITC Reversal Calculations as Per Rule 42 & 43

If your business makes both taxable and exempt supplies, you need to reverse a portion of your ITC. This calculation is crucial because any errors can affect your overall tax liability and lead to penalties.

What to do:

• Review your input details: Identify which ITC portions relate to exempt supplies (for example, inputs used for zero‑rated or exempt goods and services).
• Calculate the reversal: Use the prescribed percentage as per Rule 42 and Rule 43 of the CGST Rules to compute the correct reversal amount.
• Adjust in your returns: Ensure that you reflect the final ITC reversal in your March GSTR‑3B filings.
• Reclaim ITC on Earlier Reversals: If you had to reverse ITC due to non‑payment to suppliers beyond the 180‑day limit, remember that once you make the payment, you can reclaim that ITC. Also, update your records and adjust your GSTR‑3B so that you recover any ITC that was reversed prematurely.

8. Check Your GST Composition Scheme Eligibility

If you are a small business considering the GST Composition Scheme, check your eligibility before March 31, 2025.

This is how you can check your eligibility for GST composition scheme:

• Verify turnover: Ensure it does not exceed ₹1.5 crore (for goods) or ₹50 lakh (for services).
• File Form CMP-02 before March 31, 2025, if opting for the Composition Scheme.
• Understand restrictions: Composition taxpayers cannot collect GST from customers or claim ITC.

9. Correct Any Errors in Past GST Returns

Even if businesses are extremely careful, minor errors can slip through in your monthly or quarterly filings. March is your last opportunity to correct these mistakes before entering the new financial year.

Steps to correct any previous GST errors:

• Review past filings: Go through your GSTR‑1 and GSTR‑3B returns to identify mismatches, such as misreported sales figures or incorrect invoice details.
• Rectify instantly: File amendments or corrections as soon as you find errors. Remember, you have until the September return of the following financial year to correct past mistakes.
• Keep a log: Document the errors you find and how you correct them. This record can help you avoid similar mistakes in the future and provides a clear audit trail.

10. File Any Pending GST Refunds

If you have an eligible GST refund, whether from excess ITC claims, export refunds, or other reasons, you need to ensure your refund application is complete and submitted on time.

What you should do:

• Review your refund claims: Check your records for any pending refunds and ensure that all required documents are in order.
• Meet deadlines: File your refund applications within two years from the relevant tax period.
• Follow up: If there’s any discrepancy in the refund amount or if there is a requirement for additional documentation, resolve it instantly.

Next Steps

Once you do everything as advised in this GST year-end checklist, you won’t just avoid fines but also lay a strong foundation for the upcoming financial year. With each task, you ensure all your records are accurate and all your tax liabilities are in order.

If you’re ready to make the process even more efficient, try GSTrobo^®. This tool performs automated GST reconciliations at PAN-level in seconds and tracks eligible ITC seamlessly. Get started with a free demo and take the next step toward seamless closing of your financial year.