GST Amendments Effective from 1st April 2025 

The Goods and Services Tax (GST) framework is set to undergo significant transformations starting April 1, 2025. These amendments aim to enhance compliance, streamline tax processes, and ensure a more robust taxation system. Below is a detailed analysis of the key GST changes in 2025 and their implications for businesses across various sectors.

1. Multi-Factor Authentication (MFA) – Mandatory for All Taxpayers
   To enhance security measures, all taxpayers will be required to implement Multi-Factor Authentication (MFA) when accessing GST portals. This initiative is designed to protect sensitive financial data and prevent unauthorized access. Businesses should ensure that their authorized personnel are equipped with the necessary tools and knowledge to comply with this requirement.
2.  E-Way Bill Restrictions 
   Effective January 1, 2025, the generation of E-Way Bills will be restricted to invoices issued within the preceding 180 days, with extensions capped at 360 days. Additionally, the National Informatics Centre (NIC) will introduce updated versions of the E-Way Bill and E-Invoice systems to enhance security and compliance. Businesses must adapt their logistics and invoicing processes to align with these new timelines and system updates.
3. Mandatory Sequential Filing of GSTR-7 
   Taxpayers filing GSTR-7, which pertains to Tax Deducted at Source (TDS) under GST, must now adhere to a sequential filing order without skipping any filing numbers.  This measure aims to ensure accurate reconciliation of Input Tax Credit (ITC) and streamline the TDS collection process. Thereby improving the efficiency ofTDS collections and facilitating timely Input Tax Credit (ITC) claims for taxpayers.​
4. Biometric Authentication for Directors
   Starting March 1, 2025, Promoters and Directors of companies, including Public Limited, Private Limited, Unlimited, and Foreign Companies, will be required to complete biometric authentication at any GST Suvidha Kendra (GSK) within their home state. This change simplifies the authentication process by eliminating the need to visit jurisdiction-specific GSKs, thereby enhancing the ease of doing business.
5. Mandatory Input Service Distributor (ISD) Mechanism
   From 1st April 2025, the ISD mechanism will be mandatory for businesses to distribute ITC on common services like rent, advertisement, or professional fees across GST registrations under the same  Permanent Account Number (PAN). Businesses must issue ISD invoices for ITC distribution and file GSTR-6 monthly, due by the 13th of each month. The ITC will be reflected in GSTR-2B of receiving branches for use in GSTR-3B filing. Non-compliance will result in the denial of ITC and penalties ranging from ₹10,000 to the amount of ITC availed incorrectly.
6. Adjustments in GST Rates for Hotels and Used Cars
   Hotel Industry: The “Declared Tariff” concept will be abolished, with GST now calculated based on the actual amount charged to customers. Hotels offering accommodation priced above ₹7,500 per unit per day will be classified as “specified premises” and will attract an 18% GST rate on restaurant services, along with the benefit of ITC. New hotels can opt for this rate within 15 days of receiving their GST registration acknowledgment.​
   Used Cars: The GST rate on the sale of old cars will increase from 12% to 18%, impacting the pre-owned car market and potentially leading to higher tax liabilities for businesses dealing in used vehicles.
7. Implementation of New Invoice Series and Turnover Calculation
   Starting 1st April 2025, businesses will be required to begin using a new invoice series to maintain accurate records and ensure a smooth transition into the new financial year with updated compliance requirements. Additionally, businesses must recalculate their aggregate turnover to determine if they are liable to take GST registration or issue e-invoices. This calculation will help assess their compliance obligations for GST registration, the QRMP Scheme, GST filing, and e-invoicing in the new financial year.
8. Introduction of GST Waiver Scheme 2025
   Businesses that have settled all tax dues up to March 31, 2025, may be eligible for a GST waiver under schemes SPL01 or SPL02, provided they apply within three months of the new fiscal year. This initiative offers a tax relief opportunity for compliant taxpayers.
9. Enhanced Credit Note Compliance
   Recipients of credit notes must now accept or reject them through the Integrated Management System (IMS) to prevent ITC mismatches. This protocol ensures transparency and accuracy in ITC claims, reducing discrepancies in tax filings.
10. Changes in GST Registration Process (Rule 8 of CGST Rules, 2017)
    As per recent updates to Rule 8 of the Central Goods and Services Tax (CGST) Rules, 2017, applicants opting for Aadhaar authentication must undergo biometric verification and photo capturing at a GSK, followed by document verification for the Primary Authorized Signatory (PAS). Non-Aadhaar applicants are required to visit a GSK for photo and document verification. Failure to complete these processes within 15 days will result in the non-generation of the Application Reference Number (ARN), thereby delaying the registration process.

The forthcoming GST amendments underscore the government’s commitment to refining the tax system, enhancing compliance, and fostering a transparent business environment. It is imperative for businesses to proactively understand and implement these changes to ensure seamless operations and avoid potential penalties. Engaging with tax professionals and leveraging updated compliance tools will be crucial in navigating this evolving landscape effectively.

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Akash Kanojia

Finance Manager | VCFO | [email protected]

Specializes in accounting, corporate taxation, and VAT/GST compliance, with expertise in financial reporting and both direct and indirect tax advisory. Proficient in blending financial acumen with legal perspectives to offer comprehensive solutions.