8 Important GST Checks Before Closing Books for October 2026

Summary: Closing the books for October 2026 requires businesses to undertake a comprehensive review of GST records, return disclosures and outstanding compliance obligations, particularly in view of the statutory deadlines relating to FY 2025–26 and amendments effective from 1 November 2026. Taxpayers should first reconcile outward supplies reported in GSTR-1 and GSTR-3B with their books of account, identifying discrepancies in taxable turnover, invoice values, tax liabilities and adjustments. An invoice-wise reconciliation of input tax credit with GSTR-2B is equally important, especially because 30 November 2026 is the general statutory deadline for availing eligible FY 2025–26 ITC, subject to the earlier filing of the annual return. Businesses should examine outstanding trade creditors for compliance with the 180-day payment condition and identify any proportionate ITC reversal and applicable interest. Credit notes, debit notes and post-supply discounts require particular attention following the amendments to Sections 15 and 34 effective from 1 November 2026. Reverse charge liabilities, HSN classification, GST rates and export transactions must also be reconciled with supporting records. Exporters should verify foreign remittance arrangements, zero-rated supplies and refund claims, considering applicable RBI permissions and CBIC clarifications. Finally, businesses should compare e-invoices, e-way bills and GST returns to resolve reporting inconsistencies. Completing these checks before filing October returns can strengthen documentary compliance, reduce avoidable disputes and help businesses identify statutory corrections within the permitted timelines.

Relevant Provisions: CGST Act, 2017 – Sections 9, 15, 16, 17, 34 and 54; CGST Rules – Rules 37, 48 and 138; IGST Act – Sections 2(6) and 16

Relevant Period: October 2026 | Key FY 2025–26 Compliance Cut-off: 30 November 2026

Introduction: Why October 2026 GST Reconciliation Is Important

As businesses enter November 2026, closing the books for October requires more than routine accounting entries and filing GST returns. Recent GST amendments, evolving compliance requirements and departmental scrutiny of mismatches between returns and books of account make reconciliation particularly important. Discrepancies relating to outward supplies, input tax credit (ITC), outstanding creditors, reverse charge liabilities, credit notes and export transactions may result in tax demands, interest and penalties. This article discusses eight important GST checks businesses should undertake before closing their books and filing returns for October 2026 to ensure accurate compliance and minimise avoidable disputes.

8 Important GST Checks for October 2026: ITC Reconciliation | 180-Day Rule | RCM | Credit Notes | GST Return Compliance

1. Reconciliation of GSTR-1, GSTR-3B and Books of Account

Before closing the books for October 2026, taxpayers should reconcile outward supplies recorded in their books with the details reported or proposed to be reported in GSTR-1 and GSTR-3B. Particular attention should be given to differences in taxable turnover, tax liability, invoice values, credit notes, debit notes, advances and amendments relating to earlier periods. Businesses should also identify omitted or duplicated transactions and incorrect reporting under IGST, CGST or SGST. While mismatches between returns may attract departmental scrutiny, they do not automatically establish additional taxable supplies or short payment of tax. A transaction-wise reconciliation, supported by invoices and accounting records, can help identify genuine reporting errors and ensure that permissible corrections are made within statutory timelines.

2. ITC Reconciliation with GSTR-2B and Supplier Compliance

Businesses should undertake an invoice-wise reconciliation of ITC recorded in their purchase registers with GSTR-2B and the credit proposed to be claimed in GSTR-3B. The review should cover missing invoices, duplicate claims, incorrect GSTINs, credit notes, blocked credits under Section 17(5) and invoices relating to earlier financial years. Compliance with Section 16 of the CGST Act, including possession of valid invoices, receipt of goods or services and applicable supplier-related conditions, must also be verified. 30 November 2026 is the statutory cut-off for availing eligible ITC relating to FY 2025–26, subject to the earlier furnishing of the relevant annual return and applicable statutory provisions. Taxpayers should therefore identify unclaimed eligible credits and resolve supplier-related discrepancies before the deadline to minimise future ITC disputes.

3. Review of Outstanding Creditors and the 180-Day ITC Reversal Rule

Taxpayers should review outstanding trade creditors to identify invoices against which payment has not been made within 180 days from the invoice date. Under the second proviso to Section 16(2), read with Rule 37 of the CGST Rules, failure to pay the supplier the value of supply along with applicable tax within the prescribed period may require proportionate ITC reversal or payment, along with applicable interest. An outstanding creditor balance does not automatically establish a violation of the 180-day rule. Businesses should examine invoice-wise ageing, partial payments, advances, adjustments and statutory exceptions, including supplies liable to reverse charge. Where payment is subsequently made, the corresponding ITC may be re-availed in accordance with the law. Proper supplier ledgers and payment records are essential to establish the actual position during departmental scrutiny.

4. Verification of Credit Notes, Debit Notes and Post-Sale Discounts

Before finalising October 2026 accounts, taxpayers should review credit notes, debit notes, sales returns, price revisions and post-sale discounts to ensure their correct GST treatment. Particular attention should be given to the amendments to Sections 15(3)(b) and 34 of the CGST Act, effective from 1 November 2026, which modify the framework governing post-supply discounts and credit notes. Businesses should distinguish transactions governed by the earlier provisions from those covered by the amended framework and verify the conditions for reducing taxable value and output tax liability, including corresponding ITC reversal by recipients wherever applicable. Not every commercial credit note automatically permits a reduction in GST liability. Taxpayers should also reconcile financial and GST credit notes and review debit notes issued for additional consideration. The 30 November 2026 cut-off for reporting eligible credit notes relating to FY 2025–26, subject to earlier furnishing of the relevant annual return and other applicable conditions, makes this reconciliation particularly important.

5. Reconciliation of RCM Liabilities and Input Tax Credit

Businesses should reconcile transactions liable to GST under the Reverse Charge Mechanism (RCM) with their expense ledgers, vendor invoices, payment records and GSTR-3B. Particular attention should be given to legal services, sponsorship services, applicable goods transport agency services, director-related payments, import of services and other notified supplies. Taxpayers should verify the correct time of supply, applicable GST rates, place of supply and eligibility of corresponding ITC. RCM liability must be discharged through the electronic cash ledger, while ITC can be claimed only after satisfying the prescribed conditions. Transactions where suppliers have incorrectly charged GST despite the applicability of RCM should also be examined. Businesses dealing in notified scrap categories should separately review applicable reverse-charge notifications and their effective dates, distinguishing October transactions from subsequent changes. A transaction-wise review can help prevent missed tax liabilities, incorrect ITC claims and subsequent interest demands.

6. Review of HSN Classification, GST Rates and Outward Supply Reporting

Taxpayers should verify the HSN/SAC classification and applicable GST rates for supplies recorded during October 2026. The review should cover transactions affected by rate changes, composite and mixed supplies, exempt supplies and cases where incorrect classification may have resulted in short or excess payment of tax. Sales registers, tax invoices, e-invoices and GSTR-1 should be reconciled to identify discrepancies in HSN codes, taxable values and tax rates. Businesses must also verify compliance with applicable HSN reporting requirements and ensure that the HSN-wise summary accurately reflects their transactions. Where GST rates have changed, the applicable rate should be determined with reference to the relevant notifications and time-of-supply provisions. Correct classification and reporting can help reduce differential tax demands, interest liabilities and disputes concerning recipients’ ITC eligibility.

7. Export Transactions, Foreign Remittances and GST Refund Reconciliation

Exporters should reconcile export invoices, shipping bills, GSTR-1, GSTR-3B, customs records and foreign inward remittances before finalising their October accounts. The review should cover exports under LUT, exports on payment of IGST, zero-rated supplies to SEZ units or developers and corresponding refund claims. Businesses should identify discrepancies in invoice numbers, shipping bill details, taxable values and tax payments that may delay refunds. For export of services, compliance with Section 2(6) of the IGST Act, including receipt of consideration in convertible foreign exchange or Indian rupees wherever permitted by the RBI, should be verified. Receipt of export proceeds in Indian rupees through an RBI-permitted arrangement should not automatically result in denial of export benefits. Exporters should also review outstanding receivables, permitted write-offs, applicable Rule 96B adjustments and pending refund applications. The statutory conditions for export of services and export of goods must be examined separately to avoid incorrect conclusions regarding realisation of export proceeds.

8. Review of E-Invoicing, E-Way Bills and Other Reporting Discrepancies

Businesses should reconcile e-invoice records, e-way bills, sales registers and GST returns to identify reporting discrepancies before filing their October returns. Taxpayers covered by e-invoicing requirements must verify whether Invoice Reference Numbers (IRNs) have been generated for all applicable transactions and whether invoice details have been correctly reflected in GSTR-1. Particular attention should be given to differences in invoice dates, taxable values, GSTINs, HSN codes and tax amounts. E-way bill records should also be reviewed for missing documents, incorrect vehicle details, delivery locations and validity-related issues. A mismatch between an e-way bill, e-invoice and GST return does not automatically establish tax evasion. The nature of the discrepancy and supporting documents must be examined. For transactions occurring from 1 November 2026, businesses should separately assess any newly applicable e-way bill requirements, including requirements relating to transportation through metro rail systems. Proper reconciliation and documentation can help prevent avoidable scrutiny, detention proceedings and penalties.

Conclusion: Final GST Compliance Review Before Filing October 2026 Returns

Before filing GST returns for October 2026, businesses should complete a final reconciliation of outward supplies, ITC, outstanding creditors, RCM liabilities, credit notes, export transactions, HSN classifications, e-invoices and e-way bills. 30 November 2026 is a crucial statutory cut-off for certain compliances relating to FY 2025–26, including eligible ITC claims and credit note reporting, subject to applicable conditions. Taxpayers should also review GST amendments effective from 1 November 2026 and rectify permissible reporting errors within the prescribed timelines. A timely, transaction-wise and properly documented reconciliation can improve return accuracy, strengthen compliance and minimise avoidable GST demands, interest, penalties and litigation.