The Institute of Chartered Accountants of India (ICAI), through its GST & Indirect Taxes Committee, has released the revised edition of the “Handbook on Finalisation of Accounts with GST Perspective (June 2026)” to provide comprehensive guidance on integrating GST compliance into the financial statement finalisation process. The publication has been updated up to 31 May 2026 and incorporates the latest legislative, procedural and technological developments under the GST regime.
The Handbook emphasizes that GST compliance is no longer a standalone tax function but a critical component of financial reporting and statutory audits. It highlights the necessity for businesses to reconcile turnover, input tax credit (ITC), tax liabilities, reversals, refunds, and GST disclosures with books of accounts before finalisation of financial statements.
The publication notes that while mandatory GST Audit under Section 35(5) of the CGST Act has been discontinued with effect from 1 August 2021, taxpayers having aggregate turnover exceeding ₹5 crore are still required to file a self-certified reconciliation statement in Form GSTR-9C along with the Annual Return. The Handbook stresses that auditors and management should proactively identify GST-related discrepancies prior to issuance of audit reports to ensure that financial statements present a true and fair view.
The revised guidance provides detailed recommendations on reconciliation of Electronic Credit Ledger balances, Electronic Cash Ledger balances, GST liabilities, refunds, input tax credit claims, turnover reporting, and compliance under Reverse Charge Mechanism (RCM), TDS, and TCS provisions. It also highlights the importance of reconciling books of accounts with GSTR-1, GSTR-3B, GSTR-2B, e-Way Bills, and annual return disclosures.
A dedicated section of the Handbook focuses on GST implications arising during the review of Balance Sheet items, including property, plant and equipment, inventories, trade receivables, GST assets and liabilities, and trade payables. The publication provides practical guidance on treatment of blocked credits, GST on disposal of capital assets, job work transactions, goods in transit, import of services, and export realisation requirements.
The Handbook further addresses critical GST considerations in the Statement of Profit and Loss. Special attention has been given to turnover reconciliation, inter-branch supplies, deemed supplies, HSN classification, treatment of discounts, advances received, foreign exchange fluctuations, sales promotion schemes, reimbursements, and accounting adjustments under Accounting Standards and Ind AS.
One of the significant developments highlighted in the publication is the amendment introduced through the Finance Act, 2026 regarding post-supply discounts under Section 15(3)(b) of the CGST Act. The revised framework simplifies GST treatment of post-supply discounts by linking deductibility primarily to issuance of valid credit notes and corresponding reversal of ITC by recipients, subject to notification of the amendment’s effective date.
The Handbook also underscores the growing importance of GST reconciliations in ensuring proper availment of input tax credit. Businesses are advised to undertake comprehensive reconciliation between books of accounts, GST returns, and GSTR-2B data to identify ineligible credits, delayed vendor compliances, goods-in-transit issues, and other discrepancies that may materially affect financial statements.
Speaking on the release of the publication, ICAI President stated that the revised Handbook would serve as a valuable reference for chartered accountants, auditors, finance professionals, and industry stakeholders in strengthening GST compliance and improving the quality of financial reporting.
The GST & Indirect Taxes Committee of ICAI has expressed confidence that the updated Handbook will assist professionals in addressing GST-related issues during finalisation of accounts and contribute towards greater transparency, consistency, and compliance in the GST ecosystem.
The Handbook can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/06/Handbook-on-Finalisation-of-Accounts-with-GST-Perspective-June-2nd-2026-Edition.pdf
