GST

As the new financial year kicks in, so do several significant changes under the Goods and Services Tax (GST) framework. Whether you're a tax professional, business owner, or casual reader, here's everything you need to know.

What’s New in GST from April 1, 2025? Latest Rules, Rates & Compliance


​As of April 1, 2025, several significant changes to India's Goods and Services Tax (GST) framework have been implemented, impacting businesses across various sectors. Here's an overview of the key updates:​

1. Mandatory Multi-Factor Authentication (MFA) for Portal Login:


What’s new?
To tighten security and prevent fraud, all GST-registered taxpayers must now use MFA when logging into the GST portal.

How it works:
  • You'll need to authenticate via two methods—password and OTP (email/SMS/app-based).
  • This applies to all activities on the portal: filing returns, viewing ledgers, generating e-invoices, etc.

Why it matters:
Reduces the risk of unauthorized access and identity theft, especially for firms with shared login credentials.

2. Mandatory Input Service Distributor (ISD) Registration


What’s changed?
If you’re a business with multiple GST registrations under the same PAN, you must register as an ISD to distribute input tax credit (ITC) for shared services like legal, HR, or consulting fees.

Implications:
  • You can’t claim shared ITC across branches unless you comply.
  • Helps improve transparency in ITC distribution.

Who it affects most:
Corporates, conglomerates, and service providers with operations across multiple states.

3. Revised E-Invoice Reporting Timelines


What’s new?
Businesses with an Annual Aggregate Turnover (AATO) of ₹10 crore or more must now report e-invoices within 30 days of generation.

Example:
  • Invoice date: April 1, 2025
  • Last date to report on IRP: April 30, 2025

What happens if you’re late?
  • IRP will reject the invoice.
  • Buyer can’t claim ITC—leading to trust issues and financial setbacks.

4. Major GST Rate Updates


Used Cars
  • Old Rate: 12%
  • New Rate: 18%
  • Impact: Used car prices may rise; dealers will likely reduce buying prices from individuals.

Hotel and Restaurant Services
  • Declared Tariff concept abolished.
  • Now taxed based on actual amount charged.
  • Hotel rooms ₹7,500+ per night: considered “specified premises”.
  • Restaurants within such premises: taxed at 18% (eligible for ITC).

Why it’s important:
Brings uniformity, reduces litigation on tariff disputes, and supports more seamless audits.

5. Reporting in GSTR-1 and GSTR-3B Made Stricter


Key update:
  • Table 3.2 of GSTR-3B (which captures inter-state supplies) is now auto-populated and non-editable.
  • The values come from GSTR-1/IFF filings.

Mistakes?
Can only be corrected in GSTR-1A or in the next period’s GSTR-1—not directly in GSTR-3B.

Takeaway:
Ensure your GSTR-1 filings are accurate. Inconsistencies may lead to penalties, audits, or denied ITC.

6. GST Waiver Scheme 2025


Who it’s for:
Businesses with pending tax liabilities up to March 31, 2025.

What it offers:
  • Waiver of interest, late fees, and penalties under schemes SPL01 and SPL02.
  • You must pay the base tax amount to qualify.
  • Application window: 3 months from the scheme rollout.

Best for:
Small businesses and startups looking for a fresh compliance start without being weighed down by past dues.

7. Other Notable Changes


a. Time Limit for Amendments in GSTR-1
Amendment window for previous year's invoices and credit/debit notes: now restricted to 30th November of the following FY.

b. ITC Restrictions on CSR Expenses
Input Tax Credit is now disallowed on Corporate Social Responsibility (CSR) expenses.

c. Auto-Withdrawal of Cancellation Applications
If you file a revocation request and comply within the deadline, cancellation is now auto-withdrawn without officer intervention.

Final Thoughts

These changes aim to:
  • Improve system security (MFA)
  • Ensure fair and timely tax credit flow (ISD, e-invoicing)
  • Reduce misreporting (auto-populated returns)
  • Encourage voluntary compliance (waiver schemes)
Tip: Businesses should conduct a GST audit for FY 2024-25 and upgrade internal systems to ensure compliance with the new rules from April 1, 2025.