GST Books closure in March-April 2026 assume signigficance due to the implementation of GST 2.0 in FY 25-26. In this article we synthesize the key issues and pointers to take into account, into a single operational framework so that it acts as a ready reference:
1. KYC of vendors registered under New 3 Day GST Registration framework:
- Flag new vendors who have been registered under the new 3-day registration scheme under Rule 14A of CGST Rules.
- Ensure KYC validation for those vendors including physical verification of their premises incase deemed fit. This is because there has not been much verification at the Department's end before granting registration to these dealers.
2. Discounts & Credit Notes
- Review incentive schemes (In consonance with Circular 251 of 2025).
- Distinguish post-sale commercial CNs in promotional schemes vs. services received from dealers by the suppliers (Circulars 92 & 105/2019). Incase recipients of these schemes do an act (activity like marketing/ promotion/ etc), then services invoice has to be raised by such dealers to the suppliers of original goods/ services.
- Link CNs with invoices for audit trail as the amendments to Section 15 of CGST Act is not notified still.
3. GST Rates & HSN
- Sanitize HSN codes & GST rates (outward & inward), for changes as per GST 2.0.
- Verify GST Rates used in CN/DN rates post GST 2.0 rate changes. Where original invoices date before rate changes, then the CN/DN have to use the GST rates as in the original invoices.
4. GSTR-2B & Vendor Compliance
- Reconcile ITC with books.
- Check CN reflection in GSTR-2B, for ITC reversal.
- Identify non-compliant vendors (3B not filed, wrong POS).
- Match imports: Books vs. ICEGATE vs. GSTR-3B.
- Forex paid vs. GST-RCM on import of services.
- RCM on services: No ITC after time-barred period calculated on the basis of date of invoice of the supplier, irrespective of date of self invoice.
5. Outward Supply Reconciliation
- Books → GSTR-1 (B2B, B2C, SEZ, exports, exempt).
- GSTR-1 ↔ IRP Portal ↔ GSTR-3B ↔ EWB Data.
- CN issued → GSTR-1 → declaration receipt from recipients that they have reversed ITC.
- Track CNs rejected on IMS.
6. Place of Supply (POS)
- Validate bill-to-ship-to TRNs.
- Review TRNs with goods dispatched from different states.
- Special focus on the implementation of the POS for services by intermediaries where one of the parties is outside India when the changes in Section 13(8)(b) of The IGST Act comes into effect.
7. State-wise Trial Balance
Prepare state-wise P&L balances if trial balance is unavailable. For this in SAP/ERP, combine business areas for state-level reporting. Use “consignment-like” accounts for inter-branch receivables/payables.
8. Income Tax Reconciliation
- Match 26AS / AIS / TIS with GST returns.
- Address Table 5 of GSTR-9C issue (works contractors, service industry).
- Review TDS u/s 194R of Income Tax Act 1961 vs. GST liability.
9. Inverted Duty Structure & Refunds
- Scrutinize refunds under IDS incase any.
- Ensure GST 2.0 benefits availed (insurance, cement, canteen, coal, vehicles, packaging).
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