Essential GST Reconciliations and Compliance Checklist for FY 2024-25

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.