The GST Health Checklist — 15 checks every business must run

1.Reconcile GSTR-1 vs GSTR-3B vs GSTR-9 with books

Your GSTR-1, GSTR-3B and GSTR-9 must tie out with your books of accounts, and any mismatch should carry a written justification on file. Mismatches are the most common reason for notices and enquiries.

CA’s tip: reconcile every month, not just at year end — it saves time, prevents notices, and protects cash flow.

2.Reconcile ITC — GSTR-2A vs GSTR-2B vs GSTR-3B

ITC claimed in GSTR-3B should never exceed what appears in GSTR-2B. After year-end, cross-check with GSTR-2A as well — prior-period invoices sometimes appear in 2B while only current-year invoices show in 2A. Any gap between 2A, 2B and 3B needs a documented reason.

Why it matters: ITC is one of the most scrutinised areas in GST; proper reconciliation avoids future demands, interest and penalties.

3.Credit notes & debit notes

Every credit and debit note must be supported by relevant documents — including the e-way bill for movement of goods and a note explaining price differences where applicable. Notes without supporting evidence are the first thing an assessing officer questions during scrutiny.

4.Review of other income

The department frequently questions GST on other-income heads: discounts, incentives, scrap sales, cancellation charges, interest income. Review each item, determine GST applicability with proper legal reference, and keep a brief working note explaining why GST is or is not applicable.

5.Export sales & sales @ 0.1% GST

For exports, keep the LUT (if made without IGST), shipping bill, e-way bill to port, and FIRC on file. For sales to merchant exporters at 0.1%, goods must leave India within 90 days — obtain the exporter’s shipping bill and keep sales-return documentation clean.

6.Creditors outstanding over 180 days

Under Rule 37(1) of the CGST Rules, 2017, ITC must be reversed with interest (18% p.a.) on any invoice left unpaid to the supplier beyond 180 days from the invoice date. Prepare a supplier-wise ageing of sundry creditors and review it monthly.

7.Fixed asset additions & deletions

On additions, confirm the asset is used for business before availing ITC. On sale or disposal where ITC was claimed, GST must be reversed as per the prescribed calculation under Rule 43 of the CGST Rules, 2017. Maintain asset-wise records of ITC, usage and disposals.

8.Reverse charge (RCM) scrutiny on expenses

Scrutinise every indirect expense in the P&L for RCM applicability under Section 9(3) of the CGST Act. Commonly missed heads: legal expenses (advocate), freight (transporter), and rent paid to an unregistered landlord. RCM can apply even when the supplier is unregistered.

9.Vendor GST registration status

ITC is available only if the supplier is registered and has furnished returns (Rule 36(4), Section 16(2)(c)). Verify vendor GSTINs on the GST portal, monitor cancellations — including retrospective ones — and keep evidence of payment through banking channels.

10.Import purchases

Keep complete Bills of Entry with assessment order, duty payment and IGST details. Reconcile IGST paid on imports with GSTR-2B and books, and retain the full document set for the statutory retention period (72 months).

11.Invoice date vs GSTR-3B filing month

Report invoices in GSTR-1 of the correct month based on invoice date. If a prior-dated invoice is reported in a later month, interest under Section 50 becomes payable on the tax liability. Reconcile the invoice register with GSTR-1 and GSTR-3B monthly.

12.HSN-wise stock ledger

Rule 56 of the CGST Rules requires true and correct quantitative stock records. Ensure every item has the correct HSN code, reconcile opening stock + purchases − sales = closing stock for every HSN, and conduct regular physical verification.

13.Rule 86B — 1% cash payment of output tax

Where monthly taxable turnover exceeds ₹50 lakh, at least 1% of output tax liability must be paid in cash (subject to exceptions, e.g. income tax paid over ₹1 lakh in each of the last two years, or refunds over ₹1 lakh). Cash payment must be made before filing GSTR-3B.

14.Sales vs e-invoice vs e-way bill reconciliation

Reconcile the sales register with e-invoice and e-way bill reports every month. Common gaps that trigger scrutiny: sales in books missing from the e-invoice report, e-invoices not recorded in the sales register, e-way bills without invoices, and unreviewed cancelled or duplicate documents.

15.Blocked ITC — Section 17(5), CGST Act, 2017

Not all ITC can be claimed. Section 17(5) blocks ITC on items such as motor vehicles (with exceptions), food and beverages, health insurance (unless employer-mandated), construction on own account, goods for personal use, gifts and free samples, and purchases from composition dealers. Review expenses against Section 17(5) before availing ITC and ensure blocked credit is not claimed in GSTR-3B.