GSTR-9 FY 2025-26: Reconcile the 22 September 2025 GST Rate Change

GSTR-9 FY 2025-26: How to Reconcile the 22 September 2025 GST Rate Change

FY 2025-26 is not a routine GSTR-9 year. A major GST rate rationalisation took effect from 22 September 2025, meaning many businesses must reconcile one financial year across two rate regimes. For finance teams, the central risk is not merely identifying the correct year-end turnover; it is proving that invoices, credit notes, tax rates, HSN/SAC classification, GSTR-1 liability and GSTR-3B tax payment remain consistent across the cut-off date.

Why 22 September 2025 matters for the FY 2025-26 annual return

Notification No. 9/2025-Central Tax (Rate), dated 17 September 2025, superseded the earlier principal goods-rate notification and came into force on 22 September 2025. The revised schedules include, among other rates, 5%, 18% and 40% GST categories for specified goods. Separate rate and exemption notifications also implemented the wider rationalisation for goods and services. The practical consequence is that a product or service may have one tax treatment for supplies before the effective date and another treatment thereafter.

For GSTR-9, that creates a cut-off reconciliation problem. The annual return consolidates the entire financial year, but the supporting audit trail should still be capable of explaining why the same HSN/SAC or commercial product family may appear at different tax rates during FY 2025-26.

GSTR-9 filing threshold and due date for FY 2025-26

Section 44 of the CGST Act governs the annual return. Notification No. 15/2025-Central Tax, dated 17 September 2025, exempts registered persons whose aggregate turnover in a financial year is up to ₹2 crore from filing the annual return for FY 2024-25 onwards. Accordingly, the exemption also applies to FY 2025-26. For taxpayers required to file, the ordinary statutory timeline is 31 December following the end of the financial year; for FY 2025-26, that means 31 December 2026 unless a valid extension is notified.

Where the applicable aggregate-turnover threshold for GSTR-9C is crossed, the self-certified reconciliation statement must also be considered. The annual-return exercise should therefore be planned as a books-to-GST reconciliation, not as a portal-only compliance task.

The key reconciliation: split the year at 22 September 2025

A robust FY 2025-26 working paper should divide supplies into at least two populations: supplies up to 21 September 2025 and supplies from 22 September 2025 onward. The split should be performed using the legally relevant time-of-supply and invoice facts rather than simply the accounting month in which revenue was booked.

For each population, map HSN/SAC, taxable value, applicable rate, CGST/SGST/IGST, place of supply and document type. Then reconcile the totals to GSTR-1, GSTR-3B and the general ledger. Rate changes are particularly prone to errors where invoices were raised around the transition date, advances existed, goods were returned later, credit notes were issued after the rate change, or ERP masters were updated late.

Seven controls finance teams should run before filing GSTR-9

1. Extract invoice-level sales data for the full year and create a separate 22 September 2025 cut-off field.

2. Build an HSN/SAC rate matrix showing the rate applicable before and after the effective date. Do not rely only on the current ERP tax master.

3. Reconcile taxable value and tax by rate bucket to GSTR-1. Investigate invoices reported in a rate bucket inconsistent with the legal rate on the relevant supply date.

4. Reconcile GSTR-1 liability to GSTR-3B tax paid. Rate-transition errors can produce a liability mismatch even when total turnover agrees.

5. Review September and October 2025 credit notes, debit notes, returns and amendments separately. Confirm whether each document corrects a pre-change or post-change supply.

6. Review ITC on inward supplies affected by rate changes. A lower or higher supplier rate should be supported by the supplier invoice and reflected consistently in GSTR-2B and the purchase ledger.

7. Preserve the notification-wise rate mapping, ERP change log, exception report and management explanations as part of the annual-return file. This is valuable if a later departmental review questions an apparent rate inconsistency.

Worked example: same product, two GST rates in one financial year

Assume a company sells a product whose applicable GST rate changes with effect from 22 September 2025. Supplies of ₹40 lakh made before the effective date are taxed at the earlier applicable rate, while ₹65 lakh of supplies after the effective date fall under the revised rate. The annual turnover is ₹1.05 crore for this product line, but the tax computation cannot be tested by applying one year-end rate to the entire ₹1.05 crore.

The correct control is to preserve the two populations, reconcile each population to invoices and returns, and explain the rate transition in the annual-return working papers. If the ERP changed the rate only on 25 September, the invoices from 22–24 September should be isolated and tested for short or excess tax.

Credit notes and post-transition adjustments need special attention

A credit note issued after 22 September does not automatically mean that the revised rate applies to the underlying supply. Teams should trace the note back to the original invoice and test the statutory conditions governing the adjustment. The same principle applies to price revisions, sales returns and invoice amendments. A year-end summary that ignores document lineage can hide a rate error.

Do not confuse the GSTR-9 threshold with the rate-change reconciliation

The ₹2 crore annual-return exemption determines whether a registered person must file GSTR-9; it does not determine whether the books and GST returns require accurate rate-wise reconciliation. Even a taxpayer exempt from GSTR-9 should maintain defensible records for the transition because GSTR-1, GSTR-3B, invoice and tax-payment obligations continue independently.

Practical year-end file for FY 2025-26

A professional year-end file should contain: the pre/post 22 September rate matrix; invoice-level exception report; GSTR-1 vs sales-ledger reconciliation; GSTR-3B liability reconciliation; credit/debit-note mapping; GSTR-2B vs purchase-ledger reconciliation; evidence supporting HSN/SAC classification; and a list of unresolved differences with quantified tax exposure.

For related PGT & Associates guidance, see: https://www.pgtandassociates.com/post/gstr-9-due-date-fy-2025-26 and https://www.pgtandassociates.com/post/gstr-9c-late-fee-fy-2025-26.

FAQs

Is GSTR-9 due on 31 December 2026 for FY 2025-26?

Yes, that is the ordinary statutory due date, unless the Government validly extends it.

Is GSTR-9 mandatory if aggregate turnover is ₹2 crore or less?

Notification No. 15/2025-Central Tax exempts registered persons with aggregate turnover up to ₹2 crore for FY 2024-25 onwards.

Why should the year be split at 22 September 2025?

Because the 2025 GST rate rationalisation took effect from that date for affected supplies. A split-period reconciliation helps identify invoices reported or taxed under the wrong rate regime.

Should the current GST rate be applied to the full-year turnover?

No. Tax must be tested under the law applicable to the relevant supply. A year-end rate cannot simply be applied retrospectively to supplies made before the effective date.

Professional takeaway

For FY 2025-26, the strongest GSTR-9 process is an invoice-level reconciliation built around the 22 September 2025 transition. Businesses with material rate-sensitive supplies should complete the rate matrix and exception testing well before December rather than discovering mismatches at filing stage. PGT & Associates can assist with GST annual-return reconciliations, rate-transition reviews and GSTR-9/GSTR-9C readiness. Contact: https://www.pgtandassociates.com/contact

Primary legal references

CGST Act, 2017 — Section 44; Notification No. 9/2025-Central Tax (Rate), dated 17 September 2025, effective 22 September 2025; Notification No. 15/2025-Central Tax, dated 17 September 2025. Readers should verify any later notification, clarification or extension applicable to their facts before filing.

Disclaimer: This article is for general professional information and does not constitute legal, tax or accounting advice. Applicability depends on the facts, classification, transaction dates and notifications relevant to each taxpayer.