GST Compliance Checklist 2025: Year-End Tasks & Common Mistakes to Avoid

 

Staying GST-compliant at the close of FY 2024-25 is critical to avoid penalties, safeguard input-tax credit (ITC) and ensure a smooth transition into FY 2025-26. Use this practical checklist—paired with real-world pitfalls businesses commonly face—to tighten your processes before 31 March 2025.

Key Year-End Tasks (Do These Before 31 March 2025)

Task	Why It Matters	Statutory Form / Rule	Deadline
Renew Letter of Undertaking (LUT) for zero-rated exports	Allows export or SEZ supply without upfront IGST	RFD-11 - Rule 96A, CGST Rules 2017	31 Mar 2025
Opt-in / Opt-out of Composition Scheme	Decide regime for FY 2025-26; wrong choice → higher tax cost	CMP-02 (option) - ITC-03 (reversal)	CMP-02 by 31 Mar 2025; ITC-03 by 30 May 2025
Select or change QRMP scheme	Choose quarterly filing with monthly payment if turnover ≤₹5 crore	GST Portal option	31 Mar 2025
Reconcile GSTR-1 vs GSTR-3B	Prevent demand notices, match outward supplies & tax paid	GSTR-1 & 3B	Before March return filing
Match ITC in GSTR-2B with books	Over-claimed ITC is top audit trigger	GSTR-2B auto-statement	Monthly/quarterly; year-end true-up
Clear reversals under Rule 42/43	Wrong proportion → interest liability	Annual computation in GSTR-9	Along with March 3B
Verify vendor GST status	Suspended vendors ⇒ ineligible ITC	GSTN search	Ongoing; final check before 31 Mar
Pay any pending interest/late fees	Reduces risk of DRC-01B notices	Section 50 CGST Act	Before annual return
Prepare for GST Audit (if turnover >₹2 crore)	GSTR-9C mandatory audit & reconciliation	GSTR-9C - Section 35(5)	31 Dec 2025 (for FY 24-25)

Five Costly Mistakes & How to Prevent Them

Mistake	Impact	Preventive Action
1. Inaccurate ITC claims (e.g., missing supplier invoices)	Reversal with 18% interest, penalty for excess claim	Reconcile GSTR-2B monthly; block ITC unless invoice reflected
2. Late or NIL returns not filed	₹100/day late fee (CGST+SGST) and loss of compliance rating	Use compliance calendar alerts; file even NIL returns promptly
3. Wrong GST rates applied on invoices	Short-payment demands, customer disputes	Maintain updated HSN-wise rate master; review after every GST Council change
4. Last-minute filings causing data errors	Higher error rate, portal downtime risk	Freeze books by D + 7; run test uploads at least 3 days before due date
5. Poor record-keeping ahead of audit	Disallowance of expenses/ITC, extended audit queries	Digitize invoices, payment proofs; index by month & tax ledger for quick retrieval

Pro Tips for 2025 Compliance

• Automate reconciliations: Accounting software that auto-matches GSTR-2B and vendor ledgers cuts ITC mismatches.
• Monitor GSTN suspension lists: A supplier’s suspended GSTIN after 5 January 2024 blocks ITC credit—check monthly.
• Enable multi-factor authentication (MFA): Mandatory from 1 April 2025 for all GST portal logins—update user credentials now.
• Watch the two-slab reform: Expected switch to 5% & 18% slabs later in 2025; prepare ERP rate tables for quick rollout.

Also Read: GST Due Dates in September 2025

Bottom Line

Treat 31 March not as a filing date but a control gate: complete reconciliations, scheme elections and documentation beforehand. Tight internal checks on ITC, timely returns, and readiness for audits will preserve cash flow and protect against FY 2025-26 notices.