The Goods and Services Tax (GST) system in India continues to evolve, with the government introducing significant changes for the financial year 2025–26. These updates aim to enhance compliance, improve transparency, and streamline tax reporting for businesses. In this blog, we provide a detailed overview of GST and all the new changes effective from April 1, 2025, ensuring businesses are well-prepared to adapt to the updated framework.

What is GST? A Quick Recap

GST is India’s unified indirect tax system implemented on July 1, 2017. It replaced multiple taxes like VAT, excise duty, and service tax, simplifying the taxation process and creating a transparent structure. GST is levied at every stage of value addition and collected at the point of consumption.

Key Features

• Multi-Stage Taxation: GST applies at every stage of the supply chain.
• Input Tax Credit (ITC): Businesses can claim credit for taxes paid on inputs.
• Destination-Based Tax: Tax revenue goes to the state where goods or services are consumed.

Types of GST

1. Central GST (CGST): Levied by the central government on intra-state supplies.
2. State GST (SGST): Levied by state governments on intra-state supplies.
3. Integrated GST (IGST): Applied to inter-state supplies and imports.
4. Union Territory GST (UTGST): Similar to SGST but applicable in union territories.

Key GST Changes Effective April 2025

The financial year 2025–26 introduces several critical amendments to the GST framework. Below is a comprehensive list of these changes:

1. Non-Editable Table 3.2 in GSTR-3B

What’s Changed?
Starting April 2025, Table 3.2 of GSTR-3B, which captures inter-state supplies to unregistered persons, composition taxpayers, and UIN holders, will become non-editable. Values in this table will auto-populate from data declared in GSTR-1, GSTR-1A, or Invoice Furnishing Facility (IFF) filings.

Implications:

• Errors in Table 3.2 can no longer be rectified directly in GSTR-3B.
• Amendments must be made by revising GSTR-1A or subsequent GSTR-1/IFF filings.
• Businesses must ensure precise reporting in GSTR-1 to avoid mismatches.

2. Enhanced HSN Code Reporting in GSTR-1/1A

Phase-III Implementation:
Starting April 2025:

• Table 12 in GSTR-1/1A is split into B2B and B2C sections for HSN-wise summary reporting.
• Manual HSN code entry is discontinued; taxpayers must select codes from a predefined dropdown list.
• The “Description as per HSN Code” field auto-fills based on the selected code.

Turnover-Based Requirements:

• Businesses with ≤ ₹5 Crore Aggregate Annual Turnover (AATO): Mandatory 4-digit HSN codes for goods/services.
• Businesses with > ₹5 Crore AATO: Mandatory 6-digit HSN codes.

3. Stricter E-Way Bill Regulations

New rules have been introduced to curb misuse:

• E-way bills can only be generated for invoices issued within the preceding 180 days.
• Extensions are capped at 360 days from the original generation date.

4. Lowered E-Invoicing Threshold

The threshold for mandatory e-invoicing has been reduced from ₹10 crore to ₹1 crore annual turnover. Additionally:

• Invoices must be uploaded to the Invoice Registration Portal (IRP) within 30 days of issuance to avoid penalties or ITC denial.

5. Mandatory Multi-Factor Authentication (MFA)

To enhance digital security:

• All GST portal logins now require MFA, combining passwords with OTPs/biometric verification.
• MFA applies to taxpayers generating e-way bills or filing returns.

6. Input Service Distributor (ISD) Registration

From April 2025:

• Businesses with multiple GST registrations under one PAN must use the ISD mechanism to distribute Input Tax Credit (ITC). Cross-charge methods are no longer permitted.
• ISD invoices must be issued, and monthly GSTR-6 filings are mandatory.

7. Revised Compliance for Hospitality Sector

Changes impacting hotels and restaurants:

• Hotels charging more than ₹7,500/day must levy an 18% GST on meals served in their restaurants (up from 5%), with full ITC eligibility.
• The “Declared Tariff” concept has been abolished; taxes will now apply to actual transaction value instead of pre-declared rates.

8. Uniform GST Rate for Used Cars

A flat 18% GST applies to margin values (selling price minus purchase price) for all categories of used cars:Margin Value=Selling Price−Purchase Price\text{Margin Value} = \text{Selling Price} – \text{Purchase Price}Margin Value=Selling Price−Purchase Price

No tax is levied if the margin is negative.

9. New Invoice Series Requirement

For FY 2025–26:

• Businesses must start fresh invoice series with sequential numbering.
• Separate series must be maintained for credit/debit notes.

10. Amnesty Scheme for Legacy Issues

A special amnesty scheme has been introduced for FYs 2017–18 to 2019–20:

• Full waiver of interest/penalties if principal tax dues are cleared by March 31, 2025.
• Applications must be submitted within three months of April 2025.

11. Reassessment of Aggregate Turnover

Businesses must reassess their aggregate turnover to determine compliance obligations for registration, e-invoicing, and filing under the Quarterly Return Monthly Payment (QRMP) scheme.

12. Reverse Charge Mechanism (RCM) Compliance

Businesses are required to reconcile transactions under RCM more rigorously to ensure accurate tax reporting.

Steps for Businesses to Adapt

To comply with these changes effectively:

1. Review GSTR-1 Data: Ensure accuracy in HSN codes and inter-state supplies to avoid mismatches in auto-populated data.
2. Update ERP Systems: Align software with new invoice series requirements and dropdown-based HSN code selection.
3. Train Teams: Educate staff on revised ITC distribution processes, EWB timelines, and MFA protocols.
4. Reconcile Turnover: Reassess aggregate turnover to determine QRMP eligibility and e-invoicing compliance.
5. Vendor Communication: Inform vendors about ISD details and procedural updates.

Conclusion

The April 2025 GST updates reflect the government’s focus on automation, transparency, and fraud prevention within India’s tax ecosystem. While these changes may increase compliance burdens initially, they aim to create a more robust taxation framework that benefits businesses and taxpayers alike.

Hi, This is Ravi Kumar, and today, I will let you know about the GST, Navigating the complexities of the Goods and Services Tax (GST) system in India can be challenging for businesses of all sizes. Since its introduction in July 2017, GST has streamlined the country’s indirect tax structure, merging multiple taxes into a unified system. Despite its simplification of the tax landscape, the process of GST compliance-from registration to filing requires careful attention to detail. This blog aims to demystify the GST filing process, providing a clear, step-by-step guide to help you manage your GST obligations effectively and avoid potential pitfalls.

What is GST?

The Goods and Services Tax (GST) is a unified, multi-stage, and comprehensive tax levied on the supply of goods and services in India. Ensuring compliance with GST regulations is crucial for businesses. This tutorial provides a detailed step-by-step guide to the GST filing process in India.

GST Registration

Step 1: Determine Eligibility

a. Businesses with an annual turnover exceeding the prescribed limit (₹20 lakhs for most states, ₹10 lakhs for special category states) must register for GST.
b. Voluntary registration is also allowed.

Step 2: Apply for GSTIN

a. Visit the GST portal (www.gst.gov.in).
b. Complete the application by providing the necessary details and documents.
c. Upon approval, you will receive a unique Goods and Services Tax Identification Number (GSTIN).

Maintaining Records

Step 3: Keep Accurate Records

a. Maintain detailed records of all business transactions, including sales, purchases, and expenses.
b. Ensure invoices are GST-compliant, containing the GSTIN of the supplier and recipient, HSN code for goods or SAC code for services, and applicable tax rates.

Step 4: Invoice Management

a. Issue invoices for all taxable goods and services.
b. Retain copies of all invoices issued and received.

Filing GST Returns

Step 5: Understand Types of GST Returns

GSTR-1: Outward supplies of goods or services.

Due Date: 11th of the following month.

GSTR-2A: Auto-drafted return based on outward supplies furnished by suppliers.

GSTR-3B: Summary return for declaring inward and outward supplies and tax payment.

Due Date: 20th of the following month.

GSTR-4: Quarterly return for composition scheme taxpayers.

Due Date: 18th of the month following the quarter.

GSTR-9: Annual return summarizing all supplies made and received during the year.

Due Date: 31st December of the next financial year.

Step 6: File Returns on the GST Portal

1. Log in to the GST portal.
2. Navigate to the ‘Returns Dashboard’.
3. Select the applicable return form (e.g., GSTR-1, GSTR-3B).
4. Fill in the required details.
5. Submit the return form.

Payment of Tax

Step 7: Calculate Tax Liability

Compute your tax liability based on outward and inward supplies.

Step 8: Make the Payment

a. Payments can be made through the GST portal using net banking, credit/debit card, or over-the-counter methods for payments up to a specified limit.
b. Ensure payment is completed before filing the return to avoid penalties.

Claiming Input Tax Credit (ITC)

Step 9: Verify Eligibility for ITC

a. Ensure the goods and services are used for business purposes.
b. Ensure the supplier has uploaded the invoice and paid the corresponding GST.

Step 10: Claim ITC

a. Claim ITC in the relevant return form (e.g., GSTR-3B).
b. Maintain records of all invoices and supporting documents.

Filing Amendments

Step 11: Correcting Errors

a. If errors are found in the submitted returns, make amendments in subsequent returns.
b. Ensure accurate reporting to minimize discrepancies.

Generating E-Way Bills

Step 12: Understand E-Way Bill Requirements

E-way bills are required for transporting goods worth more than ₹50,000.

Step 13: Generate E-Way Bill

a. Visit the E-Way Bill portal (ewaybillgst.gov.in).
b. Provide necessary details, including GSTIN, invoice number, and goods details.
c. Generate and print the E-Way Bill.

Compliance and Penalties

Step 14: Timely Filing and Payment

File returns and make payments on time to avoid interest and penalties.

Step 15: Reconciliation

Regularly reconcile books of accounts with the returns filed and data on the GST portal to ensure accuracy.

Step 16: Prepare for Audits

a. Certain taxpayers are required to get their accounts audited by a chartered accountant.
b. Submit a reconciliation statement in GSTR-9C, if applicable.

Additional Tips

Regular Updates: Stay updated with the latest notifications and amendments in GST laws by regularly visiting the CBIC website (cbic-gst.gov.in).
Software Tools: Utilize GST-compliant accounting software to automate and streamline the filing process.

Frequently Asked Questions (FAQs) on the GST Filing Process in India

1. What is GST?
   Answer: GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It is applicable to the supply of goods and services and has replaced many indirect taxes previously levied by the central and state governments.
2. Who needs to register for GST?
   Answer: Businesses with an annual turnover exceeding ₹20 lakhs (₹10 lakhs for special category states) are required to register for GST. Certain businesses, like those involved in inter-state supply or e-commerce, must register regardless of turnover.
3. What is a GSTIN?
   Answer: GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit identifier assigned to each GST-registered business. It is used for all GST-related processes and filings.
4. What are the different types of GST returns?
   Answer: The main types of GST returns include:

GSTR-1: Outward supplies of goods or services (monthly/quarterly).
GSTR-2B: Auto-drafted return based on outward supplies furnished by suppliers.
GSTR-3B: Summary return for inward and outward supplies and tax payment (monthly).
GSTR-4: Quarterly return for composition scheme taxpayers.
GSTR-9: Annual return summarizing all supplies made and received during the year.

5. What is the due date for filing GSTR-3B?
   Answer: The due date for filing GSTR-3B is the 20th of the following month.
6. How do I file my GST returns?
   Answer: GST returns can be filed online through the GST portal. You need to log in with your GSTIN, navigate to the ‘Returns Dashboard’, select the applicable return form, fill in the required details, and submit the return.
7. How is the GST payment made?
   Answer: GST payments can be made through the GST portal using net banking, credit/debit card, or over-the-counter methods for payments up to a specified limit. Ensure the payment is completed before filing the return to avoid penalties.
8. What is Input Tax Credit (ITC)?
   Answer: ITC allows businesses to reduce the tax they have paid on purchases from the tax they have collected on sales. To claim ITC, the goods and services must be used for business purposes, and the supplier must have uploaded the invoice and paid the corresponding GST.
9. Can I correct errors in my GST returns?
   Answer: Yes, errors in submitted returns can be corrected by making amendments in subsequent returns. Ensure accurate reporting to minimize discrepancies.
10. What is an e-way bill?
    Answer: An e-way bill is a document required for the transportation of goods worth more than ₹50,000. It is generated online through the E-Way Bill portal and must be carried by the person in charge of the conveyance.
11. What are the penalties for late GST filing?
    Answer: Penalties for late filing of GST returns include a late fee and interest on the outstanding tax amount. The late fee is ₹50 per day (₹25 each for CGST and SGST) and ₹20 per day for nil returns (₹10 each for CGST and SGST).
12. How do I claim a refund under GST?
    Answer: To claim a refund under GST, you must file Form GST RFD-01 on the GST portal. The refund can be claimed for reasons such as excess tax payment, export of goods/services, or ITC accumulation.
13. What is GSTR-9C?
    Answer: GSTR-9C is a reconciliation statement to be filed by taxpayers whose annual turnover exceeds ₹2 crores. It is a statement reconciling the value declared in annual returns with the audited annual financial statement, certified by a chartered accountant or cost accountant.
14. Are there any exemptions under GST?
    Answer: Yes, certain goods and services are exempt from GST, such as unbranded food grains, milk, education, and healthcare services. Detailed lists of exempt goods and services are provided under various notifications issued by the government.
15. How can I stay updated with the latest GST notifications and amendments?
    Answer: Stay updated with the latest GST notifications and amendments by regularly visiting the CBIC (Central Board of Indirect Taxes and Customs) website at www.cbic-gst.gov.in. You can also subscribe to newsletters and updates from GST practitioners or tax consultants.

These FAQs cover the essential aspects of the GST filing process and address common queries to help businesses comply with GST regulations effectively.

By following this comprehensive guide, businesses can ensure they remain compliant with GST regulations and avoid potential penalties. Proper understanding and timely execution of these steps are essential for smooth GST management.

Thanks,

Hi Dear,

I am Ravi Kumar working in Cotocus Pvt Ltd as an accountant and I am providing you with all the new info related to GST on my stocksmantra.in.

What is 2 Factor Authentication?

In the Goods and Services Tax, a new protection layer is enabled by the government for security reasons. This is an additional security measure implemented to safeguard sensitive taxpayer data and transactions within the GST.

It adds an extra layer of protection at the time of login, in the previous time we just entered the user ID, and password and filled in the captcha, and after that, our GST portal would be login but from 1st December 2023 we have to enter a 2-factor authentication OTP for the login and this 2-factor authentication code will be received in your registered mobile number and your registered email ID.

How to enter the 2-factor OTP in the GST Portal?

Let me know how to enter the OTP and where you will receive this OTP.

Please visit the GST portal dashboard.

Click on the Login button.

After clicking on the login button, please enter your User ID, and password and enter the captcha Code. After that, please click on the login button.

After clicking on the login button you will receive an OTP in your registered email ID and the Registered mobile number. So you would have to enter this OTP in the GST portal and click on the submit button.

After following these steps you will be able to log into your GST portal without any confusion.

Which States are mandatory to log in to their GST portal by the OTP?

There are a few states that are listed in the GST portal for the 2-factor authentication login process in the 1st phase. 1. Delhi, 2. Rajasthan, 3. Punjab, 4. Chandigarh, and 5. Uttrakhand. The government is planning for the launching in the second phase of states.

What are the benefits of the 2-factor authentication in the GST?

There are large benefits to implementing 2-factor authentication in the GST.

1. Security – Double layer security protection of the DATA in the GST.
2. Reduces fraud risk – If a person knows your GST registered ID and Password and they will try to log into your GST portal then they are not able to log in because only you can have the login OTP in your mobile or Gmail.
3. Increased trust and transparency – You will be able to trust the GST because your all GST data will be safe from fraud people that’s why.

An attachment of the GST for the 2-factor authentication

Thanks,