GST Compliance Checklist for 2025: Important Things To Do

Let us understand the GST compliance checklist for 2025, businesses must stay proactive to avoid penalties and ensure smooth tax operations. From filing the Letter of Undertaking (LUT) to opting for schemes like QRMP and Composition, timely action is key. This GST compliance checklist 2025 highlights essential updates to help businesses stay compliant in the new financial year.

1. 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), are required to submit a Letter of Undertaking for the upcoming financial year by March 31, 2025. This submission facilitates tax-free transactions under GST regulations.

2. Opting for the Composition Scheme:

Eligible businesses intending to avail themselves of the Composition Scheme for FY 2025-26 must file Form CMP-02 by March 31, 2025. Transitioning from a regular taxpayer to a composition taxpayer necessitates reversing the Input Tax Credit (ITC) claimed on stock and capital goods as of March 31, 2025, through Form ITC-03, to be submitted by May 30, 2025.

3. Quarterly Return Monthly Payment (QRMP) Scheme Selection:

Taxpayers with an aggregate turnover up to ₹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.

4. Implementation of New Invoice Series:

In compliance with GST regulations, businesses are advised to initiate a fresh invoice series starting April 1, 2025. This applies to all transactional documents, including tax invoices, credit notes, debit notes, and bills of supply, ensuring systematic record-keeping for the new financial year.

5. Reassessment of Aggregate Turnover:

It’s prudent for businesses to reassess their aggregate turnover for FY 2024-25 to determine applicable compliance requirements for FY 2025-26. This evaluation impacts decisions related to GST registration, eligibility for the Composition Scheme, QRMP scheme participation, e-invoicing mandates, and adherence to Rule 86B concerning 1% cash payment.

6. Reconciliation of Input Tax Credit (ITC):

A thorough reconciliation between the company’s financial records, GSTR-2B, and GSTR-3B is essential to identify and rectify discrepancies. Ensuring that all eligible ITC for FY 2024-25 is claimed, ineligible credits are reversed, and mismatches are addressed will maintain compliance and accuracy in tax filings.

RCM Liabilities:

Businesses should review all transactions to identify those subjects to Reverse Charge Mechanism (RCM), ensure timely payment of these liabilities, report them accurately in GSTR-3B, and claim corresponding ITC where applicable. Maintaining self-invoices for RCM-applicable transactions is also crucial for compliance.

Timely compliance with GST regulations is essential for businesses to maintain smooth operations and avoid legal complications. As FY 2025-26 approaches, understanding and implementing these key updates—such as ITC reconciliation, RCM settlement, and invoice series renewal—will help ensure tax efficiency and regulatory adherence. By staying informed and acting ahead of deadlines, businesses can navigate the evolving GST landscape with confidence and compliance.

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