The financial year closes on March 31. After that, most adjustments to your FY 2025-26 GST returns become either impossible or attract penalties. Here are the 10 critical GST tasks every business must complete before year-end.
March 31 is not just the accounting year-end — it is a hard cutoff for several GST compliance actions. Under the CGST Act, certain credits, adjustments, and amendments can only be made up to the due date of the September return of the following financial year (September 30) or the date of filing the annual return (GSTR-9), whichever is earlier.
However, many practical adjustments are better made before March 31 itself, because: annual return GSTR-9 requires reconciliation between your books and your GST returns, and unexplained differences attract scrutiny. Credit notes must be matched to the original invoices within the same financial year for clean reconciliation. Ineligible ITC that was inadvertently claimed must be reversed before year-end to minimize interest exposure.
We put together this 10-task checklist based on the most common year-end GST issues we see businesses face. Work through each item systematically in the last two weeks of March. If you use myBillPlease, most of these tasks are automated — your GSTR-2B reconciliation, ITC reversal calculations, and credit note tracking are built into the platform.
Complete all 10 before March 31, 2026 to close FY 2025-26 cleanly
GSTR-2B is the auto-populated inward supplies register showing all invoices declared by your suppliers in their GSTR-1. ITC can only be claimed on invoices that appear in GSTR-2B — provisional ITC claims made on invoices not in GSTR-2B must be reversed under Rule 37A of the CGST Rules.
How to reconcile: Download GSTR-2B for every month from April 2025 to March 2026. Compare each month's GSTR-2B with your actual purchase invoices recorded in your accounting software or billing system. You are looking for three categories of differences:
Category A: Invoices in your books but NOT in GSTR-2B. This means your supplier has not filed their GSTR-1 or has filed it incorrectly. You cannot claim ITC on these. Follow up with the supplier to have them file their GSTR-1 correctly. If they do not comply, you must reverse the provisional ITC you may have claimed.
Category B: Invoices in GSTR-2B but NOT in your books. A supplier has declared an invoice in their return that you have not recorded. Verify whether you actually received the goods/services and whether payment was made. If it is a genuine purchase, record it in your books and claim ITC. If it is an erroneous entry by the supplier, ask them to amend it.
Category C: Matching invoices with value differences. The amount in GSTR-2B differs from your invoice. Typically happens due to rounding or data entry errors. Reconcile and use the GSTR-2B value for ITC purposes.
Complete this reconciliation for all 12 months of FY 2025-26 before filing your March GSTR-3B. The same reconciliation data forms the basis for GSTR-9C (reconciliation statement) if your turnover exceeds Rs 5 crore.
Section 17(5) of the CGST Act blocks ITC on a specific list of purchases, regardless of whether you have a tax invoice. If you inadvertently claimed ITC on any of these during FY 2025-26, reverse it before March 31 to minimize interest (18% per annum from the date of wrongful claim).
Blocked credits under Section 17(5) — ITC cannot be claimed on:
ITC on exempt supplies: If any portion of your turnover is from exempt supplies (for example, a hospital that also provides taxable pharmacy services), you must calculate the proportional ITC reversal using the formula in Rule 42 and Rule 43 of the CGST Rules. The reversal is: (Exempt turnover / Total turnover) × Total ITC claimed.
Calculate your Rule 42/43 ITC reversal for the full year and declare it in your March GSTR-3B. Your CA can assist with this calculation if your business has a mix of exempt and taxable supplies.
Credit notes issued after March 31 for transactions from FY 2025-26 create a timing mismatch in GST returns. While the CGST Act allows credit notes up to the due date of the September 2026 return (September 30, 2026) or annual return, whichever is earlier, best practice is to issue all credit notes within the same financial year for clean reconciliation.
Common reasons for year-end credit notes:
For each credit note, the original invoice number must be referenced. The GST on the credit note reduces your output tax liability in the month you issue it. If you issue a credit note after April 1, 2026 for an FY 2025-26 transaction, it will show up in FY 2026-27 returns and require explanation during GSTR-9 reconciliation.
Similarly, debit notes for short billing, price escalation, or additional charges must be issued before year-end wherever possible. Use your invoice generator to create properly formatted credit and debit notes with all mandatory fields.
Three quick but important compliance checks before the financial year closes
GST 2.0 (September 2025) changed rates for many product categories. If items moved between slabs, verify their HSN codes and current rates are updated in your billing software. Wrong HSN code on invoices can attract Rs 50 per invoice penalty under Section 125 of the CGST Act, up to Rs 25,000 per year.
If your FY 2025-26 aggregate turnover crossed Rs 5 crore, you must generate e-invoices from April 1, 2026. E-invoicing requires IRN (Invoice Reference Number) from the IRP (Invoice Registration Portal) for every B2B invoice. Check your turnover now and ensure your billing software is e-invoice ready before April 1.
If you are an exporter, your current LUT (Form GST RFD-11) is valid only for FY 2025-26 — it expires March 31, 2026. File a fresh LUT for FY 2026-27 on the GST portal before March 31. If you forget, you will need to either pay IGST on exports and claim a refund, or file the LUT immediately and ensure no exports are made in the gap period without either IGST payment or a valid LUT.
Conduct a physical stock count before March 31. If you find damaged, expired, or destroyed goods, ITC claimed on those goods must be reversed. Under Section 17(5)(h), ITC is blocked on goods destroyed or lost. Calculate the ITC attributable to the damaged stock and reverse it in your March GSTR-3B.
GST is payable on advances received for supply of goods and services. Reconcile all advances received during FY 2025-26 against invoices raised. Any advance on which GST was paid (via GSTR-3B Form GST ADV-1) but for which supply has not yet been made must be tracked for the new year. Advances outstanding at year-end need clear documentation.
Check that GSTR-1 and GSTR-3B are filed for every single month from April 2025 to February 2026, and prepare March 2026 returns before due date. Unfiled returns block e-way bill generation, attract late fees, and complicate GSTR-9 annual return preparation. Log in to GST portal and verify return status for all 11 completed months.
Once FY 2025-26 closes, the next major compliance milestone is the GSTR-9 annual return for FY 2025-26, due December 31, 2026 (typically). GSTR-9 is a reconciliation of your monthly returns — it compares what you declared in all 12 months of GSTR-1 and GSTR-3B against your books of accounts.
Completing the 10-task year-end checklist above makes GSTR-9 preparation significantly easier. Specifically:
GSTR-9C (Reconciliation Statement): If your FY 2025-26 aggregate turnover exceeds Rs 5 crore, you must also file GSTR-9C — an audited reconciliation statement prepared and certified by a CA or CMA. This statement compares GSTR-9 data with the audited financial statements and explains all differences. Start preparing GSTR-9C documentation well before December.
We built myBillPlease to make your GSTR-9 preparation straightforward. Your full year's invoices, credit notes, ITC claims, and reversals are stored in one place. One click generates the GSTR-9 data extract — reducing the annual return preparation from days to hours.
myBillPlease keeps your full year's invoices, ITC data, and GSTR-2B reconciliation in one place. Year-end GST review takes minutes, not days.
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