A S BANKA ADVISORS

With just 13 days remaining until March 31, 2026, every GST-registered business in India faces a critical compliance window. Missing any of these six actions could result in ITC losses, export disruptions, or penalty exposure. Here is what your business needs to prioritize right now.

1. LUT Filing for Exporters (Form GST RFD-11)

Exporters and SEZ suppliers must file a fresh Letter of Undertaking in Form GST RFD-11 for FY 2026-27 before March 31. Without this, you will be required to pay IGST upfront on all exports and then claim refunds, creating a significant cash flow burden. File via the GST portal under Services, User Services, Furnish Letter of Undertaking. Eligibility requires no prosecution for tax evasion exceeding Rs. 250 lakhs.

2. Composition Scheme Opt-In (Form CMP-02)

Businesses with aggregate turnover up to Rs. 1.5 crore (Rs. 75 lakhs for special category states) can opt into the Composition Scheme before March 31. Tax rates are 1% for manufacturers, 5% for restaurants, and 6% for service providers. Note that switching requires ITC reversal on inputs, WIP, and finished goods stock via Form ITC-03 by May 30, 2026.

3. ITC Reversal Under Rules 37 and 42

Rule 37 requires reversal of ITC on vendor invoices unpaid beyond 180 days from the invoice date. Conduct an aging analysis of all outstanding payables as of March 31 and reverse ITC with applicable interest. Rule 42 applies to businesses making both taxable and exempt supplies, requiring proportionate ITC reversal for exempt supplies. Complete year-end reconciliation for FY 2025-26 now.

4. GSTR-2B Reconciliation

Match your ITC per books against GSTR-2B data for each month from April 2025 to February 2026. A single unfiled return blocks your ITC for that entire month. Critically, ITC for FY 2025-26 can only be claimed until the September 2027 GSTR-3B return. After that, those credits are permanently lost.

5. Invoice Series Reset and E-Invoicing Readiness

Under Rule 49 of the CGST Rules, configure your billing software to start a new invoice series from April 1, 2026. Separately, businesses with aggregate PAN turnover exceeding Rs. 5 crore in FY 2025-26 must register on the e-invoice portal by March 31 and begin mandatory e-invoice generation from April 1.

Your 13-Day Action Plan

This week (March 18-22): Complete ITC reconciliation, aging analysis for Rule 37, proportionate reversal under Rule 42, and GSTR-2B matching.

Next week (March 23-28): File LUT (RFD-11), submit Composition Scheme opt-in (CMP-02), register on the e-invoice portal, and configure invoice series.

Final days (March 29-31): Verify all pending GSTR-1 and GSTR-3B returns are filed, confirm bank accounts and authorized signatory details on the GST portal.

Download the full GST Year-End Compliance Carousel (PDF): Download PDF

Need help navigating your GST year-end compliance? Book a quick call with A S Banka Advisors Private Limited.