Activities to be Undertaken for GST Compliances of FY 2024-25
As the FY 2024-25 comes to an end, businesses need to complete important tasks to stay GST-compliant and smooth transition into the new financial year. Key important points to consider:
Submission of Letter of Undertaking (LUT) Entities involved in zero-rated supplies, such as exports or supplies to Special Economic Zones (SEZs), without paying Integrated GST (IGST), must submit a Letter of Undertaking (LUT) in Form RFD -11 for the upcoming FY by March 31, 2025.
Compliance with Rule 96A of CGST Rules, 2017 In the case of exporting goods or services under a bond or Letter of Undertaking, a taxpayer must comply with the conditions below; otherwise, the supply will be treated as a domestic supply. For the export of goods, the export must be completed within 3 months from the date of the invoice issue. For the export of services, payment for such services must be received by the exporter in convertible foreign exchange or in Indian rupees, as permitted by the Reserve Bank of India, within one year from the date of issue of the invoice for export. It is recommended that such conditions be reviewed on each invoice regularly; however, as the FY is ending, taxpayers should revisit and ensure there are no defaults.
Opting for the Composition Scheme Eligible businesses opting for the Composition Scheme for FY 2025-26 must electronically file an intimation in FORM GST CMP-02, duly signed or verified with an electronic verification code, on the common portal. This should be done either directly or through a Facilitation Centre notified by the Commissioner before the start of the financial year for which the option is exercised. Additionally, they must submit the statement in FORM GST ITC-03, as per sub-rule (4) of Rule 44 of the CGST Rules, within sixty days from the start of the relevant financial year, i.e., by 30th May 2025.
Quarterly Return Monthly Payment (QRMP) Scheme Selection Taxpayers with an aggregate turnover of up to INR 5 crores can opt into or out of the QRMP scheme, which allows for quarterly return filing with monthly tax payments. The selection for FY 2025-26 should be completed by April 30, 2025.
Implementation of the New Invoice Series Businesses are advised to initiate a fresh invoice series starting from April 01, 2025. This applies to all transactional documents, including tax invoices, credit/debit notes, and bills of supply (exempted supplies), ensuring systematic record-keeping for the new financial year.
Reassessment of Aggregate Turnover Businesses should reassess their aggregate turnover for FY 2024-25 to determine the applicable compliance requirements for FY 2025-26. This evaluation impacts decisions related to GST registration and eligibility for the various measures, including the Composition Scheme, the QRMP scheme, e-invoicing mandates, and adherence to Rule 86B of the CGST Rules concerning 1% cash payment.
Check Applicability of E-Invoice Any entity is required to generate an E-invoice in the new financial year if its turnover exceeds the prescribed threshold limit of INR 5 Crore in any of the financial years starting from July 2017.
Check the Applicability of the E-Way Bill E-Way Bills are required for transporting goods valued above INR 50,000 in a single consignment. Review your transactions to determine if they meet this threshold and check for any exemptions as different limits are applicable in different states. A new feature has been introduced in the E-Way Bill (EWB) system for the enrolment of unregistered dealers supplying goods, effective from February 11, 2025. As per Notification No. 12/2024 – Central Tax dated July 10, 2024, Form ENR-03 allows unregistered dealers involved in goods transportation to generate e-Way Bills using a unique Enrolment ID, which replaces the GSTIN for generating e-Way Bills.
Reconciliation of Outward Supplies Reconciliation of income reported along with taxes in FORM GSTR 1, GSTR 3B, and Books of accounts shall be done and in case of any correction such as below: – Interchange of the SGST /CGST paid as IGST and vice versa, POS wrongly reported, GSTIN wrongly mentioned for any other party, Value wrongly punched for any invoice/ debit note/ credit note/ bill of supply, etc. Reconciliation of the supply as per books shall also be reconciled with the E-invoice and E-way bill generated during the period as per the applicability.
Issuance of Credit Notes To comply with GST regulations, ensure that any credit notes for returns or refunds are issued before November 30, 2025.
GST TDS/TCS credit A taxpayer shall check for any GST TDS/TCS credit available on our GST Portal and claim the same after checking its authenticity from the books of accounts.
Reconciliation of Input Tax Credit (ITC) A thorough reconciliation of the company’s financial records, including the credit and purchase register, FORM GSTR-2B, and GSTR-3B, is essential to identify and rectify discrepancies. This ensures that all eligible ITC for FY 2024-25 is claimed, ineligible credits are reversed, and mismatches are addressed, maintaining compliance and accuracy in tax filings
Common ITC Reversal at the year-end As per Rules 42 and 43 of the CGST Rules, 2017, every registered person is required to reverse the ITC claimed on inputs and input services used for purposes other than business, or for effecting exempted supplies, in the prescribed manner.
Compliance with Goods Sent on Approval Basis Ensure compliance for goods sent on an approval basis, including proper documentation and the timely return of such goods, to avoid tax liabilities.
Check the requirement to register as an Input Service Distributor (ISD) Any office of the supplier of goods or services or both that receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under reverse charge, for or on behalf of distinct persons referred to in Section 25 of the CGST Act, shall be required to be registered as Input Service Distributor and shall distribute the input tax credit in respect of such invoices. The Finance Act, 2024, has substituted the definition of ISD under Sections 2(6) and 20 of the CGST Act to include the distribution of common ITC. As this section is effective from April 01, 2025, vide Notification No. 16/2024-Central Tax, dated August 06, 2024, a taxpayer must identify such entities and apply for ISD registration.
Reconciliation of Electronic credit/cash/reclaimable ITC Ledgers A reconciliation between the electronic credit and cash ledger as per the GST portal and the books of accounts as of year-end must be performed. Additionally, a reconciliation of the reclaimable ITC statement as per the GST portal and the ITC pending to be claimed as per FORM GSTR-2B must also be carried out.
Settlement of Reverse Charge Mechanism (RCM) Liabilities Businesses should review all transactions to identify those subjects to RCM, ensure timely payment of these liabilities, report them accurately in FORM GSTR-3B, and claim corresponding ITC wherever applicable. Raising & maintaining self-invoices for RCM-applicable transactions procured from unregistered suppliers is also crucial for compliance. Additionally, businesses should regularly check all advisories and updates on the GST Portal to ensure accurate RCM payments.
Obtain Declarations from Goods Transport Agencies (GTA) For FY 2025-26, collect declarations from GTA that opt to pay GST under the forward charge mechanism. This documentation is crucial to justify the non-payment of GST under RCM.
GST Amnesty Scheme 2025 The government has introduced an amnesty scheme to encourage businesses to clear outstanding GST dues under Section 73 of the CGST Act. The deadline for payment of outstanding GST dues is March 31, 2025, and the deadline for submitting the relevant form is June 30, 2025. This scheme offers a waiver of interest and penalties for the past financial years 2017-18, 2018-19, and 2019-20, as per Section 128A of the CGST Act. By addressing these key activities, businesses can ensure compliance with GST regulations, avoid penalties, and maintain smooth tax operations as they transition to the new financial year.
