GST Compliance Checklist for the Year Ended 2026

As the financial year draws to a close, businesses must prioritize their GST compliances to avoid potential issues and ensure smooth operations. Non-compliance can result in Interest @18%, ITC blocking, notices and penalties under the provisions of the Act.

Keeping the same in consideration, we have jot down some checklist to be taken care of before the end of the financial year for seamless compliances.

1. Sales Reconciliation

Identification of any differences in Outward Turnover and tax liability paid between GSTR 3B and GSTR- 1 and align it with the books of account. Any discrepancy between them to be reported in the subsequent return to be filed.

2. Input Tax Credit (ITC) Reconciliation for FY 2025-26

• Reconcile ITC availed in Books/GSTR 3B with GSTR 2Bto confirm accuracy and verify that the ITC closing balance as per the Electronic Credit Ledger matches the books of accounts. Any ITC not availed till date but shown in GST Portal shall be considered in March 2026 GST Return and any ITC Available in books but not in GSTR-2B, follow up shall be done with respective parties to file their return timely to avail such ITC.
• Examine any Blocked ITC availed earlier on ineligible items, such as motor vehicles for personal use or employee benefit expenses, composite scheme supplies etc. If done so, reverse such ITC.
• Perform the annual reversal of ITC under Rule 42/43 of the CGST Rules, 2017, where applicable.
• Reverse ITC in GSTR 3B for March 2026 if payment to supplier exceed 180 days. And thereafter avail the same in the month in which the payment is made to the supplier.

3. Reverse Charge Mechanism (RCM) Compliances

• Adhere to the compliance rules under Reverse Charge Mechanism for specific services like legal, Rental, director fees, sponsorship fees or goods transport services. Match & Reconcile RCM liability in books with payments made in GSTR 3B. Any amount payable, shall be recorded in March 2026 GST Returns.

4. Letter of Undertaking (LUT) Application

• Apply for LUT on the GST portal for FY 2026-27 to facilitate tax-free exports before 31^st March, 2026.

5. Refund Claims

• File any refund claim pending within the two-year limit specified under GST regulations.

6. Advances Received in Service Supply

• Advances received for services before the issuance of an invoice, at the time of receipt of such advance GST becomes payable in that period. Verify if any such payment of tax is pending and correct in the March 2026 Return.

7. Composition Scheme

• If turnover is within prescribed limits under GST law, businesses may opt for the Composition Scheme File CMP-02 by31^st March 2026.

8. QRMP Scheme

• Taxpayers having Turnover below Rs 5 Crores shall have an option to select the frequency of GST return filing for FY 2026-27 till 30th April 2026. So, if the taxpayers have opted for Jan – Mar 2026 and want to opt out from the QRMP Scheme and continue monthly filing of returns from FY 2026-27, they need to choose the option by 30th April 2026.

9. E-Invoicing and QR Code Applicability

• Businesses should verify whether e-invoicing or dynamic QR code requirements apply to them based on their turnover and nature of supplies under the CGST Act, 2017 and ensure timely compliance.

10. GST Registration Updates

• Ensure GST registration details, including business locations, are accurate.

11. Reset Invoice Number Series

• Invoice numbering must restart from 1 April 2026 for the new financial year. Incorrect invoice series may result in compliance mismatches.

12. Update HSN/SAC Codes
Businesses must correctly report HSN codes in B2B and B2C invoices. Incorrect HSN reporting may result in departmental notices.

Conclusion

By adhering to this checklist, businesses can ensure compliance with applicable regulatory requirements and minimize the risk of penalties. Proactive consultation with qualified tax professionals further facilitates the accurate and timely completion of all necessary procedures.

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For any further information or clarification, the author can be reached at cashubhikhandelwal@gmail.com.

DISCLAIMER: The views expressed are strictly of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.