Comprehensive Guide to GST New Guidelines in India for 2025
The Goods and Services Tax (GST) framework in India continues to evolve to enhance compliance, transparency, and ease of doing business. In 2025, several significant updates have been introduced, impacting businesses across sectors. This blog provides a detailed overview of the new GST guidelines effective in 2025, based on the latest announcements from the GST Council, Central Board of Indirect Taxes and Customs (CBIC), and GST Network (GSTN). Whether you're a business owner, tax professional, or consumer, this guide will help you navigate the changes.
1. Mandatory Multi-Factor Authentication (MFA) for GST Portal Access
To bolster the security of the GST portal, multi-factor authentication (MFA) is now mandatory for all taxpayers, implemented in a phased manner:
January 1, 2025: Mandatory for taxpayers with an Annual Aggregate Turnover (AATO) exceeding ₹20 crore.
February 1, 2025: Extended to taxpayers with an AATO exceeding ₹5 crore.
April 1, 2025: Applicable to all taxpayers, regardless of turnover.
Key Details:
MFA requires two or more verification methods (e.g., password, OTP, or biometric) to access the GST portal, e-way bill, or e-invoice systems.
This measure aims to reduce unauthorized access and fraudulent activities.
Action Steps:
Ensure your GST portal login credentials are updated.
Set up MFA as per GSTN guidelines to avoid disruptions.
2. Expanded E-Invoicing Requirements
The e-invoicing threshold has been lowered to include more businesses, effective April 1, 2025:
New Threshold: Businesses with an AATO of ₹10 crore or more must report B2B invoices to the Invoice Registration Portal (IRP) within 30 days from the invoice date.
Previous Threshold: Applied to businesses with an AATO above ₹100 crore.
Key Details:
Invoices not reported within 30 days will be rejected for Invoice Reference Number (IRN) generation, impacting input tax credit (ITC) claims.
A case-insensitive e-invoicing system will be introduced from June 1, 2025, for greater flexibility.
Action Steps:
Upgrade invoicing systems to comply with the 30-day reporting requirement.
Train staff on IRP processes to ensure timely compliance.
3. Mandatory Input Service Distributor (ISD) Registration
From April 1, 2025, businesses with multiple GST registrations under a single PAN must register as an Input Service Distributor (ISD) to distribute ITC for common services (e.g., rent, audit fees, software licenses).
Key Details:
Previously, businesses could use cross-charge mechanisms, but ISD registration is now mandatory for standardized ITC distribution.
Businesses must issue ISD invoices and file GSTR-6 returns to allocate ITC across branches.
This applies to services, not goods or capital goods.
Action Steps:
Assess if your business requires ISD registration based on multi-state operations.
Update accounting systems to track ISD invoices and ITC distribution.
4. Biometric-Based Aadhaar Authentication
Biometric Aadhaar authentication and document verification for GST registration have been expanded to several states in 2025:
Effective Dates and States:
March 15, 2025: Uttar Pradesh.
March 2025: Rajasthan, Arunachal Pradesh, Chhattisgarh, Goa, Mizoram, and Assam.
Corporate Entities: From March 4, 2025, promoters and directors of private, public, and foreign companies must undergo biometric authentication at anyà·€
Key Details:
Authentication can be completed at any GST Suvidha Kendra (GSK) within the home state, offering location flexibility.
Action Steps:
Schedule biometric authentication at a nearby GSK.
Ensure all directors comply to avoid registration delays.
5. GST Rate Changes and Rationalization
The 55th GST Council meeting (December 21, 2024) and subsequent notifications introduced several rate revisions, effective from April 1, 2025, unless stated otherwise:
Fortified Rice Kernel (FRK): Reduced to 5% GST.
Gene Therapy: Fully exempted from GST.
Millet Flour (70% millet composition): 0% GST if sold loose; 5% if pre-packaged and labeled.
Old and Used Vehicles: GST increased to 18% on the supplier’s margin, aligning with other vehicles.
Hotel Accommodation: GST rates now tied to the previous year’s supply value, with new definitions for “specified premises” (hotels charging over ₹7,500 per unit per day or voluntarily declared as such).
Action Steps:
Review product pricing and tax structures to reflect updated rates.
For hotels, file opt-in/opt-out declarations for specified premises as per new formats.
6. Invoice Management System (IMS) and GSTR-1 Updates
The Invoice Management System (IMS), introduced on October 1, 2024, is now optional but highly recommended for accurate ITC claims.
GSTR-1 Changes (Effective January 2025):
Table 12 of GSTR-1 is split into B2B and B2C tabs.
Manual HSN code entry is replaced with a dropdown selection.
Validation checks for supply values and tax amounts are introduced (initially in warning mode).
Action Steps:
Train accounting teams on IMS and updated GSTR-1 reporting.
Ensure HSN codes are selected correctly to avoid faulty returns impacting GSTR-2B.
7. E-Way Bill Restrictions
New restrictions on e-way bills (EWB) are effective from January 1, 2025:
EWBs are valid only for documents dated within 180 days of generation.
EWB extensions are capped at 360 days from the generation date.
Non-compliance may lead to seizure of goods and penalties (10% of goods’ value or ₹10,000, whichever is higher).
Action Steps:
Update logistics processes to ensure timely EWB generation.
Monitor document dates to comply with the 180-day rule.
8. Waiver Scheme Under Section 128A
A GST waiver scheme for FY 2017–18 to 2019–20 allows taxpayers to pay the principal tax amount by March 31, 2025, to waive interest and penalties.
Forms GST SPL-01 and SPL-02: Available from early January 2025 for filing waiver applications (due by June 30, 2025).
Verify payment details in the electronic liability ledger if not auto-populated in SPL-02.
Action Steps:
Review past dues and make payments by March 31, 2025.
Prepare to file waiver applications once forms are available.
9. Track and Trace Mechanism (Section 122B)
A new Section 122B in the CGST Act, 2017, introduces penalties for non-compliance with the Track and Trace Mechanism under Section 148A, aimed at preventing tax evasion using unique identification markings.
Action Steps:
Implement systems to comply with track and trace requirements.
Stay updated on CBIC notifications for specific guidelines.
10. Key Compliance Dates for 2025–26
The GST calendar for FY 2025–26 includes critical deadlines:
GSTR-3B (QRMP Scheme): For quarter ending December 2024, file by January 24, 2025 (Category X states) or January 26, 2025 (Category Y states).
GSTR-9 & GSTR-9C (FY 2024–25): Due by December 31, 2025.
CMP-02 (Composition Scheme): Opt-in by March 31, 2025, for FY 2025–26.
RFD-11 (LUT): Renew by March 31, 2025, for exports without IGST payment.
Action Steps:
Mark these dates in your compliance calendar.
Use tools like LEDGERS Software for automated reminders.
Conclusion
The GST guidelines for 2025 introduce significant changes aimed at improving digital security, compliance, and tax transparency. Businesses must proactively adapt to mandatory MFA, e-invoicing, ISD registration, and biometric authentication while staying updated on rate revisions and filing deadlines. By upgrading systems, training staff, and leveraging tools like the GST portal’s IMS, businesses can ensure compliance and avoid penalties.
Stay Ahead:
Regularly check CBIC and GSTN advisories for updates.
Consult with GST experts for tailored advice.
Share your thoughts or questions in the comments below!
Sources:
GST Council, CBIC, and GSTN notifications (2024–2025).
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