The Goods and Services Tax (GST) landscape in India is always changing. The government keeps making updates to simplify processes, improve transparency, and reduce tax evasion. As we approach 2025, it’s important for every business, whether large or small, to check their GST compliance systems. Are you really “GST-Ready”? This checklist will help you pinpoint the key areas to focus on for a smooth and compliant year.
Your Essential GST Compliance Checklist for 2025
To make sure your business is fully ready for GST this year, go through this checklist:
I. Annual & Periodic Compliance Actions (Ongoing & Year-End Preparation)
Annual Turnover Review: Recalculate your total turnover for FY 2024-25 to check your eligibility and obligations for FY 2025-26, especially regarding e-invoicing, the Composition Scheme, and the QRMP Scheme.
Composition Scheme Opt-in/out (if applicable): If you qualify and want to join the GST Composition Scheme for FY 2025-26, file Form CMP-02 by March 31, 2025. If you are switching from regular GST to composition, make sure to reverse ITC via Form ITC-03 by May 30, 2025.
QRMP Scheme Opt-in/out: Decide whether to opt in or out of the Quarterly Return Monthly Payment (QRMP) scheme by April 30, 2025, for FY 2025-26.
Letter of Undertaking (LUT) for Zero-rated Supplies: If your business deals with zero-rated supplies (exports, supplies to SEZ), ensure your LUT for FY 2025-26 is filed by March 31, 2025.
Reset Invoice Number Series: Start a new, unique invoice number series (up to 16 alphanumeric characters) on April 1, 2025, for all invoices, credit notes, and debit notes.
Physical Verification of Inventory: Perform a physical stock count as of March 31, 2025, and match it with your records, while adjusting any discrepancies with proper documentation.
II. Return Filing & Reconciliation
Timely Filing of Returns: Stick to the due dates for GSTR-1, GSTR-3B, GSTR-7, GSTR-8, and any other relevant returns.
GSTR-1 (Outward Supplies):
Monthly filers (turnover > ₹1.5 Cr): 11th of the following month.
Quarterly filers (QRMP): 13th of the month after the quarter.
GSTR-3B (Summary Return):
Monthly filers (turnover > ₹5 Cr): 20th of the following month.
Quarterly filers (QRMP): 22nd or 24th of the month after the quarter (depending on state category).
GSTR-9 & GSTR-9C (Annual Returns): The deadline for FY 2024-25 is December 31, 2025. Although it’s optional for smaller businesses (turnover below ₹2 crore), reconciliation is strongly recommended.
Reconcile GSTR-1 with GSTR-3B: Regularly compare the outward supplies reported in GSTR-1 with the tax paid in GSTR-3B to find and fix any mismatches.
Reconcile ITC (GSTR-3B with GSTR-2B/2A & Purchase Register): Match your claimed Input Tax Credit in GSTR-3B with the data in GSTR-2B/2A and your purchase records. Reverse any ineligible ITC immediately to avoid penalties.
Reconcile RCM Liabilities: Identify all transactions under the Reverse Charge Mechanism (RCM), make sure GST is paid, and eligible ITC is claimed. Keep self-invoices when necessary.
Address Time-Barred Returns (Urgent!): If you have any GST returns pending for over three years from their due date, file them before July 2025 to avoid permanent blocking.
Prepare for Non-Editable GSTR-3B (from July 2025): Ensure your GSTR-1/IFF filings are correct before submission since GSTR-3B will be locked. Understand GSTR-1A for making corrections.
III. E-invoicing and E-Way Bill Management
E-invoicing Compliance (AATO ₹10 Cr+):
30-Day Deadline: Set up systems to generate and report e-invoices to the IRP within 30 days of the invoice date. Late submissions will be rejected.
Software Upgrades: Ensure your ERP or billing software can automatically create e-invoices and connect with the IRP.
HSN Code Accuracy: Select the right HSN codes from the dropdown menu in GSTR-1.
E-Way Bill Compliance:
Document Age Limit: Make sure e-Way Bills are created for documents not older than 180 days.
Extension Limit: Remember the 360-day limit on e-Way Bill extensions.
Two-Factor Authentication (for E-Way Bill/E-Invoice portals): Use multi-factor authentication for all users accessing these systems.
Case-Insensitive IRN: Note that the IRP will treat invoice numbers as case-insensitive starting June 1, 2025.
IV. Internal Processes & Training
Regular Internal Audits: Carry out audits of your GST data, returns, and reconciliations regularly to find and correct errors.
Staff Training: Offer ongoing training to your finance, sales, and logistics teams about the latest GST updates, compliance needs, and how to use the software. Awareness across departments is important.
Automated Solutions: Use GST compliance software and accounting tools that provide automation for invoicing, return filing, and reconciliation to reduce manual errors and save time.
Maintain Records: Keep all GST-related documents, invoices, and records organized and accessible for future audits or inquiries.
Stay Updated: Regularly check official GSTN advisories, CBIC notifications, and reliable tax websites for the latest updates and clarifications. Consider signing up for GST news alerts.
Professional Assistance: If your business operations are complex or you are unsure about certain compliance issues, think about hiring tax experts or consultants.
Why Being GST-Ready Matters More Than Ever
In 2025, the GST framework is shifting toward more automation, transparency, and stricter enforcement. Failing to comply can lead to:
Penalties and Fines: For late filing, incorrect reporting, or failing to meet e-invoicing/e-way bill requirements.
Loss of Input Tax Credit (ITC): Due to mismatches or delayed reporting, which can hurt your cash flow.
Audit and Scrutiny: An increased chance of tax authority scrutiny and audits if discrepancies arise.
Business Disruption: E-invoice rejections or issues generating e-way bills can disrupt your operations.
By addressing the points in this checklist proactively, your business can confidently navigate the changing GST landscape and maintain smooth operations and strong financial health in 2025 and beyond. Don’t just comply; be GST-ready!