Key GST Reconciliations
At the end of the financial year 2024-25, businesses must conduct the following reconciliations to ensure accurate GST filings and compliance:
| Sr. No | Reconciliation | Purpose | Remarks |
|---|
| 1 | GSTR-3B vs. Books of Accounts | Identifies discrepancies and ensures accurate records. | Regular review prevents tax liability issues. |
| 2 | GSTR-2B vs. GSTR-3B | Monthly matching is legally mandated. | Ensures correct ITC claims and avoids mismatches. |
| 3 | E-way Bill vs. GSTR-1 (Sales) | Helps detect unreported sales and tax evasion. | Important for audit compliance. |
| 4 | E-way Bill vs. Books (Purchase) | E-way Bill is proof of delivery; ensures ITC validity. | Helps prevent disputes on ITC claims. |
| 5 | Import IGST vs. GSTR-2B | Ensures ITC is claimed only if IGST is paid. | Avoids ineligible ITC claims. |
| 6 | E-invoice Reconciliation for Sales | Mandatory for businesses with turnover > ₹5 Cr. | Non-compliance may lead to penalties. |
| 7 | E-invoice Reconciliation for Purchase | No ITC without a valid e-invoice. | Ensures seamless ITC credit. |
| 8 | 26AS/AIS-TIS vs. Books vs. GSTR-1 | Reconciles income with government records. | Excess TDS means excess income declared. |
| 9 | TDS and TCS Reconciliation with Books | Ensures tax deductions are correctly reflected. | Prevents errors in tax filing. |
| 10 | GSTR-1 vs. Sales Register | Identifies discrepancies in reported sales. | Helps avoid notices from tax authorities. |
| 11 | Books vs. Electronic Cash Ledger | Ensures cash balance reconciliation. | Reduces cash flow mismatches. |
| 12 | Books vs. Electronic Credit Ledger | Ensures accurate credit utilization. | Prevents errors in ITC claims. |
| 13 | Table 5O of GSTR-9C vs. Books | Reconciles sales for annual return filing. | Ensures accurate turnover reporting. |
Key ITC Compliance Checks
To ensure proper ITC claim and GST compliance, businesses should review the following:
| Action Point | Description | Remarks |
| Ineligible ITC in GSTR-2B | Review ITC bifurcation in GSTR-2B and maintain records for ineligible ITC. | Essential for audit purposes. |
| No ITC on provisionally booked expenses | ITC should not be claimed on provisional entries. | Prevents non-compliance with GST rules. |
| Reversal of ITC under Rule 42/43 | ITC reversal must be computed and paid by March GSTR-3B. | Avoids interest liability. |
| ITC Reversal for unpaid invoices | If invoices remain unpaid beyond 180 days, ITC must be reversed. | Critical for compliance to avoid penalties. |
| ITC Reversal for rejected goods/services | ITC should be reversed for returned or cancelled purchases. | Prevents undue credit claims. |
| ITC Blocked across locations | Analyze ISD and cross-charge mechanisms to unblock ITC. | Ensures smooth credit utilization. |
Key Checks for Job Work Compliance
| Action Point | Description | Remarks |
| Reconciliation of goods sent to job workers | Goods sent before 1st April 2024 must be received back within 1-3 years. | Avoids tax liability on unreturned goods. |
Financial Statement Considerations
| Action Point | Description | Remarks |
| Valuation of closing stock and ITC calculations | ITC on stock, consumables, and semi-finished goods should be assessed. | Ensures correct closing stock valuation. |
| Inventory reconciliation | Compare physical inventory with books to check for losses or theft. | Essential for financial accuracy. |
| Fixed asset verification | Review physical verification of assets and adjust records accordingly. | Prevents discrepancies in financial statements. |
Related Party Transactions Compliance
| Action Point | Description | Remarks |
| Valuation of related party transactions | Follow prescribed valuation methods under Rule 28. | Prevents tax underreporting. |
| Open market value (OMV) check | Verify that declared values meet OMV standards. | Avoids potential tax disputes. |
Critical Deadlines and Actions Before 31st March 2025
| Action Point | Description | Remarks |
| Hotel Tax Rate Declaration | Hotels must declare tax rate options to the jurisdictional authority. | Ensures compliance with tax structure. |
| ITC Reversal on Construction Expenses | Review ITC claims based on the Safari Retreats judgment. | Prevents non-compliance risks. |
| GST Amnesty Scheme under Section 128A | Waiver of interest/penalties on tax dues (2017-2020) if paid before March 31, 2025. | Helps businesses reduce tax liabilities. |
| Annexure V for GTA | GTA providers must submit Annexure V by 15th March for forward charge tax option. | Ensures smooth compliance with GST rules. |
| ISD Registration and RCM ITC Distribution | Mandatory ISD registration for businesses availing common ITC. | Prevents ITC losses and enhances credit flow. |
This checklist ensures businesses stay compliant with GST regulations and avoid penalties. Reviewing these action points before the financial year-end will help maintain accurate records and optimize tax planning.
