Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting

GST Updates

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting

GST Updates

As India continues to strengthen its indirect tax framework, several important changes under the Goods and Services Tax (GST) regime have been introduced, effective from April 1, 2025, and beyond. These reforms are aimed at enhancing ease of doing business, improving data accuracy, and reducing compliance challenges for taxpayers.

Biometric-Based Aadhaar Authentication for GST Registration (Effective in Assam)

A significant development under Rule 8 of the CGST Rules, 2017, is the introduction of biometric-based Aadhaar authentication for GST registration. Starting April 1, 2025, this functionality has been rolled out in Assam on a pilot basis.

Key Features:

  • Risk-Based Selection: Applicants may be selected for biometric authentication based on data analytics and risk parameters.

  • Two Types of Authentication:

    • OTP-Based: Usual Aadhaar OTP authentication.

    • Biometric-Based: Requires physical presence at a GST Suvidha Kendra (GSK) for fingerprint and document verification.

  • Mandatory Documents: Applicants must carry original Aadhaar and PAN cards, jurisdiction details, appointment confirmation, and all documents uploaded during the application process.

  • Timelines: The biometric process must be completed within the specified time for the ARN to be generated.

This initiative aims to curb fake registrations and enhance the authenticity of GST applicants.

Revised Formats for GSTR-7 (TDS) and GSTR-8 (TCS)

To promote transparency and traceability, the government has revised the formats for GSTR-7 (for Tax Deducted at Source) and GSTR-8 (for Tax Collected at Source by e-commerce operators).

GSTR-7 Updates

  • Mandatory invoice/document-wise reporting.

  • Requires details like deductee GSTIN, invoice number, payment amount, and tax deducted.

GSTR-8 Updates

  • More granular data capturing supplies made via e-commerce platforms.

  • Improved accuracy and compliance checks for digital commerce ecosystems.

Clarification: No GST on UPI Transactions Above ₹2,000

A clarification from the government has put to rest rumors regarding the imposition of GST on UPI payments above ₹2,000.

Highlights

  • No GST is levied on UPI transactions, irrespective of amount.

  • GST applies only on payment-related services (e.g., MDR).

  • Since January 2020, the MDR for P2M (Person-to-Merchant) UPI transactions has been zero, hence no GST applies.

  • UPI has grown exponentially, reaching a transaction volume of ₹260.56 lakh crore by March 2025, with India contributing to nearly 49% of global real-time transactions (ACI Worldwide Report 2024).

Case Insensitivity in IRN Generation (Effective June 1, 2025)

To address inconsistencies in invoice numbering during e-invoicing, the Invoice Registration Portal (IRP) will treat invoice/document numbers as case-insensitive starting June 1, 2025.

What This Means

  • Invoice numbers like “abc123” and “ABC123” will be treated as the same.

  • All invoice numbers will be automatically converted to uppercase.

  • This aligns with the case-insensitive treatment in GSTR-1 and helps prevent duplication errors.

Auto-Population of Table 3.2 in GSTR-3B (Effective April 2025)

To ensure data consistency across returns, Table 3.2 of GSTR-3B (pertaining to inter-state supplies to unregistered persons, UIN holders, and composition taxpayers) will now be auto-populated and non-editable.

Compliance Guidance

  • The values in Table 3.2 will be derived from GSTR-1, GSTR-1A, and IFF filings.

  • Corrections, if any, must be made in the source returns (GSTR-1 or IFF).

  • Accurate and timely reporting is essential to avoid filing errors in GSTR-3B.

E-Invoicing and E-Way Bill Compliance Enhancements

E-Invoicing Update

  • Businesses with an Annual Aggregate Turnover (AATO) of over ₹10 crore are now required to report e-invoices within 30 days from the date of invoice issuance.

  • Previously, this timeline was applicable only to businesses with AATO above ₹100 crore.

E-Way Bill Validity

  • E-Way Bill generation is restricted to documents dated within 180 days prior to generation (effective from January 1, 2025).

  • Extension limits are capped at 360 days from the original generation date.

These measures are designed to tighten control on logistics documentation and ensure timely reporting.

CBIC Guidelines to Streamline GST Registration (Instruction No. 03/2025-GST)

Responding to taxpayer grievances over unwarranted document demands during registration, the Central Board of Indirect Taxes and Customs (CBIC) has issued Instruction No. 03/2025-GST dated April 17, 2025.

Key Directives

  • Officers must strictly adhere to the prescribed document list in GST REG-01.

  • No registration notice should be issued based on presumptions or minor discrepancies.

  • Any request for additional documents must be approved by the Deputy/Assistant Commissioner.

  • Zonal Chief Commissioners are to implement monitoring systems and issue trade notices for better enforcement.

This directive reinforces transparency, minimizes delays, and promotes ease of doing business.

GST Updates

DISHA Mobile App Launched for Taxpayer Assistance

A new DISHA self-help mobile application has been launched by the CGST & Customs Pune Zone to assist visitors and taxpayers in navigating government offices. This is a user-friendly initiative to enhance in-person taxpayer services.

The April 2025 GST amendments mark a notable shift toward automation, accountability, and taxpayer facilitation. With tighter timelines, improved data integrity, and a more robust registration framework, businesses must now be even more vigilant with accurate return filing and documentation.

Staying updated and proactive will be key to ensuring seamless compliance under the evolving GST regime.

Related Post

image

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting As India continues to strengthen its indirect tax framework, several important changes under the Goods and…
image

Tax Implications of ESOPs and RSUs for Employees

Tax Implications of ESOPs and RSUs for Employees Employee Stock Option Plans (ESOPs) and Restricted Stock Units (RSUs) have become increasingly popular as part of employee compensation packages, especially in…
image

ITR Filing Deadline Extended: New Last Date is September 15

ITR Filing Deadline Extended: New Last Date is September 15 The deadline for filing income tax returns for FY 2024–25 (AY 2025–26) was moved from July 31 to September 15 by the…

Book A One To One Consultation Now
For FREE

How can we help? *

Preparing for a GST Department Audit: Key Steps and Focus Areas

GST

Preparing for a GST Department Audit: Key Steps and Focus Areas

GST

Receiving a GST audit notice from the department can be an intimidating experience for any business. However, with timely preparation and a systematic approach, it is possible to handle the audit process efficiently and avoid penalties. This guide outlines the essential steps to take upon receiving a GST audit notice, key reconciliation tasks, common audit focus areas, and best practices to ensure compliance.

1. Understand the Audit Notice

The first and most crucial step is to thoroughly review the audit notice. It typically contains vital information such as the scope of the audit, audit period, the legal provision under which it is initiated (usually Section 65 or 66 of the CGST Act), and the details of the audit officer. Businesses should also take note of any deadlines for document submission or meetings.

2. Verify GST Returns and Conduct Reconciliations

Before the audit begins, businesses must ensure that all GST returns—GSTR-1, GSTR-3B, GSTR-9, and GSTR-9C (if applicable)—are filed and reconciled with their financial records. Key reconciliation areas include:

  • Sales and purchase ledgers vs. GST returns

  • Input Tax Credit (ITC) claimed vs. GSTR-2B

  • Output tax liability vs. sales registers

  • E-invoice and E-way bill data vs. GSTR-1 and sales registers

Maintaining an accurate stock register and general ledger is also essential, as discrepancies here are common triggers for scrutiny.

GST

3. Organize Required Documents

Proper documentation is critical during a GST audit. Businesses should organize and keep ready the following:

  • GST registration certificate

  • All filed GST returns (monthly and annual)

  • Tax invoices and e-way bills

  • Purchase and sales registers

  • Input and output tax ledgers

  • Stock and expense registers

  • Trial balance, profit & loss statement, and balance sheet

  • Bank statements

  • All reconciliation workings and justifications for past entries

Digital organization of these files by GSTIN, financial year, and document type can significantly ease the audit process.

4. Key Areas of Focus for GST Auditors

Audit officers often focus on common areas of non-compliance. Businesses should proactively verify:

  • Excess ITC claimed or mismatch with GSTR-2B

  • Non-payment to suppliers within 180 days and reversal of ITC, if applicable

  • Undisclosed or under-reported outward supplies

  • Valuation discrepancies or under-valuation of supplies

  • Reverse Charge Mechanism (RCM) compliance

  • Tax liability on advances and time of supply

  • Transactions with related parties

  • Apportionment of ITC between taxable, exempt, and non-GST supplies

5. Specific Compliance Checks That Attract Penalties

Even in the absence of major discrepancies, auditors frequently verify smaller compliance points that carry direct penalties. Businesses should review:

  • Filing of ITC-04 for goods sent to job workers

  • Declaration of all bank accounts linked to the business in the GST portal (failure to declare can attract a penalty of ₹25,000 per undeclared account)

  • HSN code reporting: Ensure the top five HSNs are updated and match invoices and returns

  • GSTR-1 summaries: Ensure document summaries and HSN tables are correctly filed

  • Updated business addresses: Any change in the principal or additional place of business must be updated within 30 days

  • E-invoice and e-way bill data: Must match GSTR-1; any mismatch can lead to per-invoice penalties

6. Voluntary Correction and DRC-03

If any past errors or shortfalls are discovered during pre-audit checks, businesses can voluntarily pay the differential tax using Form DRC-03. This proactive step is often viewed positively and may help in mitigating penalties or interest.

7. Representation and Legal Awareness

While a business owner may choose to appear before the officer, it is advisable to nominate a knowledgeable person such as the accounts head or GST consultant for representation. All submissions must be in written form and duly acknowledged by the officer.

It also helps to be familiar with the key legal provisions related to audits:

  • Section 65 – Departmental Audit

  • Section 66 – Special Audit by Chartered Accountant or Cost Accountant

  • Section 70 – Power to summon documents or persons

  • Rule 101 – Procedure of audit

GST

8. Importance of Professional Assistance

Engaging a Chartered Accountant or GST expert can prove invaluable. They can conduct a pre-audit review, simulate likely questions, and help in preparing reconciliations and documentation. Their support ensures that the business is well-prepared and compliant, significantly reducing audit risks.

Read More: Claiming Delayed Income Tax Refunds: Relief Through CBDT’s Special Provisions

A GST audit is not just a compliance exercise—it is a test of the accuracy, transparency, and discipline of your tax practices. Being proactive, meticulous, and professionally guided can ensure a smooth audit experience and protect your business from unnecessary financial and legal exposure.

Related Post

image

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting As India continues to strengthen its indirect tax framework, several important changes under the Goods and…
image

Tax Implications of ESOPs and RSUs for Employees

Tax Implications of ESOPs and RSUs for Employees Employee Stock Option Plans (ESOPs) and Restricted Stock Units (RSUs) have become increasingly popular as part of employee compensation packages, especially in…
image

ITR Filing Deadline Extended: New Last Date is September 15

ITR Filing Deadline Extended: New Last Date is September 15 The deadline for filing income tax returns for FY 2024–25 (AY 2025–26) was moved from July 31 to September 15 by the…

Book A One To One Consultation Now
For FREE

How can we help? *

GST Compliance Checklist for Financial Year 2025-26

GST

GST Compliance Checklist for Financial Year 2025-26

GST

Strategic Review & Action Plan for Businesses

As the new financial year 2025–26 begins, businesses must undertake a comprehensive introspection of their GST compliance framework. This includes both substantive law changes and procedural reforms. With several amendments becoming effective from April 1, 2025, aligning internal policies and operations with updated regulations is crucial. 

Key Legal Updates Under GST

Major Statutory Amendments – What’s New This Year?

One of the most significant changes is the amendment to the definition of Input Service Distributor (ISD) under Section 2(61) of the CGST Act. ISD is now restricted to distributing Input Tax Credit (ITC) only for input services and not goods. It specifically pertains to an office of the supplier receiving invoices for input services on behalf of distinct persons and distributing the credit as per Section 20.

Cross Charge vs. ISD – Know the Difference

While ISD pertains to input service credit distribution, cross charging refers to the taxable supply between distinct persons (same PAN, different GSTINs) under Schedule I of the CGST Act, even if done without consideration. Cross charge is applicable to both goods and services, while ISD applies only to services. Correct classification is key to avoiding litigation.

Reviewing Contracts – A GST-Focused Approach

Businesses should revisit vendor and customer agreements during renewals in April 2025. Contracts must reflect the updated GST provisions, such as tax liability clauses, ITC eligibility, indemnity terms, invoicing structure, and dispute resolution mechanisms.

Procedural Compliance – Start the Year Right

E-Invoicing – New Thresholds, Broader Applicability

E-invoicing under Rule 48(4) is now mandatory for registered persons whose aggregate turnover exceeds ₹5 crore in any financial year since 2017–18. It applies to B2B and export supplies. Exemptions continue for SEZs, banks, insurers, and others as specified.

GTA Compliance – Opting for Forward Charge

Goods Transport Agencies (GTA) opting for Forward Charge Mechanism (FCM) must file Annexure V between January 1 and March 31 of the preceding year. For FY 2025–26, this means the declaration must be filed by March 31, 2025. Once opted, the FCM continues unless Annexure VI is filed within the same time frame to switch back to Reverse Charge Mechanism (RCM).

Exporters & SEZ Units – File LUT Before Supply

To export goods or services without IGST payment, businesses must furnish a Letter of Undertaking (LUT) in Form RFD-11 on the GST portal before April 1, 2025. This eliminates the need for IGST upfront payment and enhances cash flow. Only those not prosecuted for tax evasion above ₹2.5 crore are eligible.

Composition Scheme – Enroll Before March 31

Eligible small businesses intending to opt for the Composition Scheme must file CMP-02 by March 31, 2025. Eligibility includes turnover limits and the nature of supplies. Inter-state supplies and certain services are excluded. Non-compliance or late filing disqualifies the entity from availing composition benefits.

Start-of-Year Operational Tasks

Invoice Numbering – Plan New Series in Advance

Every new financial year requires a fresh invoice series. Businesses must also ensure that e-invoicing compliance is met for the applicable turnover category. Vendors must be informed of changes if required.

HSN Code Compliance – Avoid Misclassification

Under Notification No. 78/2020, HSN code requirements vary:

  • 4-digit for turnover up to ₹5 crore

  • 6-digit for turnover exceeding ₹5 crore Accurate HSN reporting is essential to avoid audit flags and penalties.

Dynamic QR Code – Mandatory for Large B2C Suppliers

Businesses with aggregate turnover exceeding ₹500 crore must include a Dynamic QR Code on B2C invoices. This aids in digital payments and ensures better audit trails. Non-compliance can attract penalties.

Reconciliation – Your Monthly Internal Audit

Output Reconciliation – Catch Discrepancies Early

  • GSTR-1 vs. GSTR-3B: Ensure consistency between reported outward supplies and tax liability.

  • E-Way Bill vs. GSTR-1: Align dispatch data with tax filings.

  • E-Invoice vs. GSTR-1 vs. Books: Reconcile for consistent and accurate reporting.

Input Tax Credit – Claim What’s Yours, Correctly

  • Books vs. GSTR-2A/2B vs. GSTR-3B: Match ITC entries to portal data.

  • Reversal of Ineligible Credit: Identify and reverse disqualified claims.

  • Electronic Credit Ledger vs. Books: Validate ledger balances with financial accounts.

Managing Refunds – Don’t Let Time Lapse

Refund applications under Section 54 must be filed within two years from the relevant date. Regular reconciliation can help identify eligible refund opportunities related to exports, inverted duty, or excess cash ledger balances.

Credit & Debit Notes – Timely Recording is Key

Businesses must issue and report credit/debit notes accurately in GSTR-1 and ensure the tax impact is correctly reflected in GSTR-3B. Section 34 of the CGST Act governs the timeline and adjustment rules for such documents.

Related Post

image

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting

Major GST Updates Effective April 2025 Onwards: Key Changes in Compliance, Registration, and Reporting As India continues to strengthen its indirect tax framework, several important changes under the Goods and…
image

Tax Implications of ESOPs and RSUs for Employees

Tax Implications of ESOPs and RSUs for Employees Employee Stock Option Plans (ESOPs) and Restricted Stock Units (RSUs) have become increasingly popular as part of employee compensation packages, especially in…
image

ITR Filing Deadline Extended: New Last Date is September 15

ITR Filing Deadline Extended: New Last Date is September 15 The deadline for filing income tax returns for FY 2024–25 (AY 2025–26) was moved from July 31 to September 15 by the…

Book A One To One Consultation Now
For FREE

How can we help? *