Essential GST Compliance Checklist for FY 2025-26: Deadlines & New Portal Updates
Essential GST Compliance Checklist for FY 2025-26: Stay ahead with key deadlines, new portal updates, and compliance requirements—scroll down for a quick summary
With the financial year 2025-26 approaching, businesses must ensure compliance with the latest Goods and Services Tax (GST) regulations. Several important deadlines, procedural requirements, and portal enhancements have been introduced to streamline tax administration, This article provides a detailed checklist categorized into two parts: Important Compliance Actions businesses must...
With the financial year 2025-26 approaching, businesses must ensure compliance with the latest Goods and Services Tax (GST) regulations. Several important deadlines, procedural requirements, and portal enhancements have been introduced to streamline tax administration,
This article provides a detailed checklist categorized into two parts: Important Compliance Actions businesses must complete before the new financial year and New GST Portal Updates, which introduce system changes affecting filings and reporting.
PART 1: KEY COMPLIANCE ACTIONS FOR FY 2025-26
1. Filing of Letter of Undertaking (LUT) for Zero-Rated Supplies
Businesses engaged in exports or supplies to Special Economic Zones (SEZs) without payment of Integrated GST (IGST) must submit a Letter of Undertaking (LUT) for FY 2025-26 by March 31, 2025. Filing the LUT ensures that exporters do not have to pay IGST upfront on zero-rated supplies. The option is now available on the GST portal.
2. Opting for the GST Composition Scheme
Eligible small businesses wishing to avail of the Composition Scheme for FY 2025-26 must submit Form CMP-02 by March 31, 2025. This scheme allows businesses to pay GST at a fixed rate with reduced compliance requirements. Those transitioning from a regular taxpayer to a composition taxpayer must reverse the Input Tax Credit (ITC) on inputs, work-in-progress, and finished goods stock as of March 31, 2025, by filing Form ITC-03 on or before May 30, 2025.
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3. Opting In or Out of the QRMP Scheme
The Quarterly Return Monthly Payment (QRMP) schemeis available for businesses with an aggregate turnover of up to Rs. 5 crores. It allows taxpayers to file quarterly returns while making monthly tax payments. Those wishing to opt in or out of the scheme for FY 2025-26 must do so by April 30, 2025, via the GST portal.
4. Resetting Invoice Number Series
As per GST regulations, businesses must reset their invoice number series at the start of each financial year. This requirement applies to all types of invoices, including tax invoices, credit notes, debit notes, and bills of supply. A new series must be implemented from April 1, 2025, to maintain consistency and compliance.
5. Recalculation of Aggregate Turnover
Businesses must reassess their aggregate turnover for FY 2024-25 to determine their eligibility for various GST schemes, including the Composition Scheme, QRMP Scheme, and e-Invoicing mandates. This evaluation also helps businesses determine whether Rule 86B (1% cash payment rule) applies to them.
6. Reconciliation of Input Tax Credit (ITC)
A thorough reconciliation of Input Tax Credit (ITC) is crucial to avoid discrepancies and financial liabilities. Businesses must verify their books of accounts, GSTR-2B, and GSTR-3B to ensure that:
- Eligible ITC is fully claimed
- Ineligible ITC is reversed
- Any mismatches are corrected before filing annual returns
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7. Settlement of Reverse Charge Mechanism (RCM) Liabilities
Businesses must review all purchases and expenses to identify transactions subject to the Reverse Charge Mechanism (RCM). Any RCM liabilities should be paid in GSTR-3B, and corresponding self-invoices should be maintained for proper documentation.
PART 2: NEW GST PORTAL UPDATES & CHANGES FOR FY 2025-26
1. Mandatory HSN Code Selection in GSTR-1 & GSTR-1A
From February 2025, taxpayers will no longer be allowed to enter HSN codes manually in GSTR-1 and GSTR-1A. Instead, they must select the correct HSN code from a dropdown list. Additionally, Table 12 of GSTR-1 has been split into B2B and B2C supply sections for clearer reporting. Although new validation checks have been introduced, they will initially remain in warning mode and will not block return filings.
2. Introduction of E-Way Bill Requirement for Gold in Kerala
Starting January 20, 2025, businesses involved in intrastate movement of gold in Kerala must generate E-Way Bills (EWB) for transactions related to goods classified under Chapter 71 (excluding imitation jewelry). This new requirement is expected to enhance transparency in the gold trade.
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3. Waiver Scheme under Section 128A
The GST portal now facilitates the filing of waiver applications under Forms GST SPL-01 and GST SPL-02. However, businesses applying for waivers must first withdraw any appeal applications filed against demand orders. If an appeal was filed before March 21, 2023, and remains pending, the taxpayer must request withdrawal through the appellate authority.
4. Introduction of GST DRC-03A for Demand Payment Adjustments
A new Form GST DRC-03A has been introduced to allow businesses to adjust payments made under DRC-03 against demand orders. Many taxpayers had mistakenly used DRC-03 instead of the “Payment Towards Demand” facility, leading to inconsistencies in their electronic liability registers. The new form enables proper adjustments and linking of payments to outstanding demands.
5. Time Limit for Reporting E-Invoices for Businesses with AATO of Rs. 10 Crores and Above
From April 1, 2025, businesses with an annual aggregate turnover (AATO) of Rs. 10 crores and above must report their e-invoices within 30 days of the invoice date. The previous limit applied only to businesses with an AATO of Rs. 100 crores and above, but now a larger group of taxpayers must adhere to this rule. For example, an invoice dated April 1, 2025, must be reported by April 30, 2025. The Invoice Registration Portal (IRP) will not accept invoices older than 30 days, making it essential for businesses to report invoices promptly.
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Quick Summary
| Compliance Requirement | Details | Deadline |
| File LUT for Zero-Rated Supplies | Submit LUT for exports & SEZ supplies to avoid IGST payment. | March 31, 2025 |
| Opt-In for GST Composition Scheme | File Form CMP-02 if opting for the Composition Scheme. | March 31, 2025 |
| Transition to Composition Scheme | Reverse ITC & file Form ITC-03. | May 30, 2025 |
| Opt-In/Out of QRMP Scheme | Choose quarterly return & monthly tax payment option. | April 30, 2025 |
| Declarations from Goods Transport Agencies (GTA) | Collect GTA declarations for forward charge mechanism. | Before FY 2025-26 starts |
| Reset Invoice Number Series | Start a new invoice series for FY 2025-26. | April 1, 2025 |
| Recalculate Aggregate Turnover | Assess eligibility for various GST schemes & compliance. | Before FY 2025-26 starts |
| Reconcile ITC (Input Tax Credit) | Match GSTR-2B, GSTR-3B & books to ensure ITC accuracy. | As early as possible |
| Settle Reverse Charge Mechanism (RCM) Liabilities | Identify and pay RCM liabilities; maintain self-invoices. | Ongoing |
| Update HSN Codes | Ensure compliance with the latest HSN requirements. | Before filing GSTR-1 for April 2025 |
| Implementation of HSN Code Validation in GSTR-1 & GSTR-1A | Manual HSN entry replaced with dropdown selection. | From Feb 2025 onwards |
| Cross Charge for Common Expenses | Allocate ITC for common expenses between related entities. | Ongoing |
| E-Way Bill for Gold (Kerala) | New rule for intrastate gold movement in Kerala. | Effective Jan 20, 2025 |
| Waiver Scheme under Section 128A | File GST SPL 01 & SPL 02 for waiver applications. | As per GST Portal timelines |
| Application for Rectification under Notn. 22/2024-CT | Rectify ITC demand orders where ITC is now eligible. | Available on GST Portal |
| New Form GST DRC-03A | Adjust payments made under DRC-03 against demand orders. | Use GST Portal functionality |
| Time Limit for e-Invoice Reporting (AATO ≥ 10 Cr) | e-Invoices must be reported within 30 days. | From April 1, 2025 |
New GST Updates
E-Invoice Reporting: From April 1, 2025, businesses with an annual turnover of Rs. 10 Cr+ must report e-invoices within 30 days.
Waiver Scheme for Taxpayers: Taxpayers can file GST SPL 01 & SPL 02 under the waiver scheme, subject to withdrawal of pending appeals.
HSN Code Validation in GSTR-1 & 1A: From February 2025, HSN codes will be chosen from a drop-down menu instead of manual entry.
New E-Way Bill (EWB) for Gold in Kerala: Effective January 20, 2025, Kerala has introduced mandatory EWB for Gold, excluding imitation jewelry.
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New GST Form DRC-03A: Taxpayers should use Form GST DRC-03A to adjust voluntary payments (made via DRC-03) against demand orders.
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