Key Changes Announced in Refund Filing Procedure for Deemed Export Recipients

In an important update to streamline and simplify the refund filing process under GST, the Goods and Services Tax Network (GSTN) has introduced significant changes specifically for refund claims filed “On account of refund by recipient of deemed export.” These changes aim to reduce procedural bottlenecks and make the refund process more efficient for taxpayers involved in deemed export transactions.

Below are the detailed updates:

🔁 1. No More Chronological Filing of Refund Applications

Taxpayers are no longer required to file refund applications in chronological order of tax periods. This means:

• You are not required to select “From Period” and “To Period” while submitting your refund application.
• Refunds can now be applied irrespective of the sequence of tax periods, thereby offering flexibility in filing.

📄 2. Mandatory Filing of Returns

Before applying for a refund under this category:

• Ensure that all applicable returns (such as GSTR-1, GSTR-3B, etc.) have been filed up to the date of refund application.
• Any non-compliance in return filing may result in rejection or delay of the refund.

📊 3. Revised Table Format: “Amount Eligible for Refund”

A major structural change has been introduced in the refund application table. Here’s a breakdown of the newly introduced columns:

a. Col. 1: Balance in ECL at the Time of Filing

• Displays the available balance in the Electronic Credit Ledger (ECL) under each major head: IGST, CGST, SGST/UTGST.
• This is auto-populated at the time of filing.

b. Col. 2: Net Input Tax Credit (ITC) of Deemed Exports

• Shows auto-populated data based on Statement 5B invoices.
• Reflects the claimed ITC under each tax head (IGST, CGST, SGST/UTGST).

c. Col. 3: Refund Amount as per Uploaded Invoices

• Represents the total ITC claim as per uploaded invoices.
• Downward editable by the taxpayer if needed.

d. Col. 4: Eligible Refund Amount

• This is the maximum refund amount permissible.
• It is auto-calculated as per Circular No. 125/44/2019-GST, which defines the order of debit from the credit ledger.

e. Col. 5: Refund Amount Not Eligible due to Insufficient Balance

• Reflects the difference between claimed ITC and actual available balance in the ECL.
• Indicates how much of the claim cannot be processed due to insufficient ledger balance.

⚙️ 4. Improved Refund Optimization Functionality

GSTN has enhanced the system’s logic to maximize eligible refund claims. Here’s how it works:

• The system compares total refund claimed across all Heads (IGST, CGST, SGST/UTGST) with the aggregate available balance in the credit ledger.
• Even if sufficient balance is not available in a specific Head, the system allows a combined comparison, increasing the possibility of maximum refund.

This update aligns with the intent of ease of compliance for taxpayers under deemed export provisions.

📝 5. Advisory for Taxpayers

• Taxpayers are strongly advised to review and understand these changes before filing refund applications.
• If any technical issue is encountered during the process, it can be reported via the official GST grievance portal:
  🔗 https://selfservice.gstsystem.in/ReportIssue.aspx

These amendments are expected to accelerate the refund process and reduce administrative delays, especially for recipients of deemed exports who often face working capital challenges. This is another step by GSTN towards improving taxpayer services and building trust in the GST regime.

Postponement of GSTR-7 Changes on GST Portal: Latest Update

he Goods and Services Tax Network (GSTN) has issued an important advisory regarding the deferment of the invoice-wise reporting functionality in Form GSTR-7, originally scheduled for implementation starting from the April 2025 return period.

Background

As per Notification No. 09/2025 – Central Tax dated 22nd February 2025, the government had notified that invoice-wise reporting in Form GSTR-7 would become mandatory effective 1st April 2025. This move aimed to bring greater transparency and accuracy in the reporting of Tax Deducted at Source (TDS) under GST, allowing for a more detailed capture of transactions and facilitating better reconciliation for deductees.

Reason for Deferment

GSTN has now announced that technical challenges in the ongoing development and testing of the required functionalities on the GST portal have necessitated a temporary deferment of this invoice-wise reporting feature.

Despite significant progress, the backend systems and front-end user interface still require additional refinements and testing to ensure a smooth experience for taxpayers and avoid any disruptions in compliance processes.

Current Status

• The implementation of invoice-wise reporting in Form GSTR-7 has been postponed.
• The existing system of consolidated reporting shall continue until further notice.
• The updated functionality will be deployed shortly on the GST portal, and users will be duly informed once the changes go live.

Advisory for Taxpayers

• TDS deductors filing Form GSTR-7 should continue following the existing format of reporting.
• No changes are required in the reporting methodology for the time being.
• It is advisable to stay updated through official GST portal notifications or communications issued by GSTN to know the revised date of implementation.

This deferment underscores the commitment of the GSTN to ensure that new functionalities are launched with adequate robustness, ensuring a seamless user experience. Taxpayers and stakeholders are advised to remain vigilant and prepare for the transition, once a new date is announced.

Struggling with GST Registration? CBIC’s Latest Directive Offers Faster Resolution

The Central Board of Indirect Taxes and Customs (CBIC) has issued Instruction No. 04/2025-GST to streamline and enhance the grievance redressal process for applicants facing issues in obtaining GST registration under the Central jurisdiction. This step is a follow-up to the earlier Instruction No. 03/2025, which focused on standardizing the processing of GST registration applications.

🔍 Objective of the Instruction

The instruction aims to:

• Address grievances of applicants related to queries raised, unjustified rejections, or delays in GST registration.
• Provide a direct mechanism for applicants to escalate their concerns.
• Ensure transparency, accountability, and timely resolution of issues during the registration process.

📬 Who Can Use This Mechanism?

Any applicant whose GST registration Application Reference Number (ARN) falls under Central jurisdiction, and who has a grievance regarding:

• Improper or irrelevant queries raised,
• Delays or silence from the department,
• Rejection of application in violation of previous instructions,

can approach the concerned Zonal Principal Chief Commissioner/Chief Commissioner of CGST.

CBDT Releases ITR-5 Form for Assessment Year 2025-26

The Central Board of Direct Taxes (CBDT) has officially notified the Income Tax Return (ITR) Form 5 for the Assessment Year (AY) 2025–26. The revised form has been issued through Notification No. 42/2025 dated 1st May 2025, and it incorporates key amendments aligned with the Finance Act, 2024. This update is crucial for firms, LLPs, AOPs, BOIs, and other persons (except individuals and HUFs) required to file ITR-5.

🔍 Key Changes in the Notified ITR-5 for AY 2025-26:

🖋️ 1. Schedule-Capital Gains — Split Based on Date of Transfer

The Schedule-CG now requires taxpayers to bifurcate capital gains into two periods:

• Before 23rd July 2024
• On or After 23rd July 2024

This change has been introduced to reflect the amendments brought in the Finance Act, 2024, which introduced differential tax treatment or grandfathering clauses applicable from this cutoff date.

✅ Action Point: Taxpayers must carefully identify the date of transfer for each capital asset to correctly report in the appropriate sub-schedule.

🖋️ 2. Capital Loss on Share Buyback Allowed (With Conditions)

Biometric Verification Made Mandatory for GST Registration in Sikkim

Dear Taxpayers,

This advisory is to inform and guide GST registration applicants in Sikkim about the newly implemented procedure involving biometric-based Aadhaar authentication and in-person document verification. The following points outline the key features and steps to be followed under this updated registration process:

1. Background and Legal Framework

Rule 8 of the Central Goods and Services Tax (CGST) Rules, 2017 has been amended to introduce a new verification mechanism. Under the revised rule, applicants for GST registration may be identified on the common GST portal based on data analysis and risk parameters. Such identification may require:

• Biometric-based Aadhaar Authentication
• Photograph of the applicant
• Verification of original documents submitted with the application

2. Rollout in Sikkim

The above functionality has been developed by GSTN (Goods and Services Tax Network) and has been officially rolled out in the state of Sikkim on May 1st, 2025.

3. Authentication and Verification Process

After submission of Form GST REG-01, applicants will receive an e-mail notification with one of the following two links:

(a) A link for OTP-based Aadhaar Authentication, or
(b) A link to book an appointment for Biometric-based Aadhaar Authentication and Document Verification at a designated GST Suvidha Kendra (GSK).

This e-mail (termed the intimation e-mail) will also contain the jurisdiction details and the GSK location.

4. Process Based on Link Received

• If OTP-based Authentication Link is Received (3a):
  The applicant can continue with the registration process as per the existing standard procedure.
• If Appointment Booking Link is Received (3b):
  The applicant must schedule an appointment using the provided link and visit the designated GSK for biometric authentication and document verification.

5. Appointment Booking and Slot Availability

• Booking for Sikkim Applicants begins on May 1st, 2025.
• Once the appointment is booked, a confirmation e-mail will be sent to the applicant with the date and time details.

6. Documents to Carry During GSK Visit

Applicants visiting the GSK must carry the following:

• A copy (hard or soft) of the appointment confirmation e-mail
• Jurisdiction details (as per the intimation e-mail)
• Original Aadhaar Card and PAN Card
• Original documents that were uploaded with the application (as specified in the intimation e-mail)

7. On-site Biometric and Document Verification

At the GSK, biometric authentication and document verification will be conducted for all individuals required as per the GST application (Form REG-01).

8. ARN Generation

The Application Reference Number (ARN) will be generated only after successful biometric authentication and document verification. Applicants must ensure they schedule and attend the GSK visit within the permissible timelinementioned in the intimation e-mail.

9. Operational Hours of GSKs

The working days and hours of the GST Suvidha Kendras will be in accordance with the guidelines issued by the Sikkim state administration.

Conclusion

All GST applicants in Sikkim are requested to adhere strictly to these updated procedures. This initiative aims to strengthen the registration process by leveraging technology and risk assessment while ensuring authenticity and transparency.

For any further assistance, please reach out to the GST Helpdesk or visit your nearest GSK as per the details provided in your communication.