Key GST Updates Effective from 1st July 2025

As the new quarter begins, taxpayers must prepare for critical GST compliance reforms taking effect from 1 July 2025. These include non-editable GSTR-3B, a 3-year filing cut-off, and upgraded e-way bill systems, along with the closing window for the GST Amnesty Scheme and GSTR-4 filing grace period.

1. GSTR-3B Will Become Non-Editable (New Auto-Population Rule)

Effective From: Returns for July 2025 period (filed in August 2025)

• GSTR-3B liability values will be auto-populated from GSTR-1, IFF, or GSTR-1A
• These values will be non-editable
• Errors must be corrected via Form GSTR-1A (newly introduced) before filing GSTR-3B

 Action Required: Carefully review GSTR-1/IFF data and amend via GSTR-1A if needed
 Reference Advisory Date: 7th June 2025

 2. 3-Year Limit for Filing Past GST Returns (No More Backfiling)

Effective From: 1 August 2025 (for returns due ≥3 years ago)

Returns covered:

 If not filed by 31st July 2025, these returns will be permanently barred from the portal.

 Reference Advisory Date: 18th June 2025

 3. E-Way Bill Portal 2.0 Goes Live (Inter-Operable with 1.0)

Launch Date: 1 July 2025
New Portal: ewaybill2.gst.gov.in

 Fully integrated with E-Way Bill 1.0 for:

• Generating or extending E-Way Bills
• Updating vehicle or transporter info
• Creating consolidated E-Way Bills
• API-based access for businesses

 Syncs both portals in real-time
 Ensures business continuity during outages

 Reference Advisory Date: 16th June 2025

 4. GSTR-4 Filing Deadline: 30 June 2025

• GSTR-4 (for composition taxpayers) for FY 2024–25 must be filed by 30 June 2025
• After 30 June, returns can still be filed but with late fees
• Avoid penalty by filing on or before deadline

 5. GST Amnesty Scheme Ends on 30 June 2025

If you have old pending GST returns, late fees, or are eligible for reduced penalties, take advantage of the GST Amnesty Scheme before it expires.

 Last Date to Avail Amnesty: 30 June 2025
 Covers non-filers and delayed filers with partial or full waiver of late fee (as per scheme conditions)

 Summary: What You Need To Do Before 1 July 2025

 GST DUE DATES FOR JULY 2025

Due Date	Form	Description
10 July	GSTR‑7	TDS return under GST
10 July	GSTR‑8	TCS return by e-commerce operators
11 July	GSTR‑1	Monthly return for outward supplies (turnover > ₹5 Cr)
13 July	GSTR‑1 & GSTR-5	QRMP scheme (for June Qtr)
13 July	GSTR‑6	GSTR‑3B
20 July	GSTR‑3B & GSTR-5A	Monthly return (taxpayers > ₹5 Cr or opted for monthly)
22 July	GSTR‑3B	Quarterly filers (QRMP) for Group A states (Chhattisgarh, MP, Gujarat, Maharashtra, Karnataka, Goa, Kerala, TN, Telangana, Andhra Pradesh, etc.)
24 July	GSTR‑3B	Quarterly filers (QRMP) for Group B states (Delhi, Punjab, Haryana, HP, JK, UP, Uttarakhand, WB, NE states, Bihar, Jharkhand, Rajasthan)
30 July	ITC-04	Job work declaration for April–June 2025 (if applicable)

15 Costly GST Mistakes You Could Be Making While Filing Your Returns! Don’t Miss This Check

Even well-intentioned taxpayers face GST penalties due to complex rules and overlooked compliances. Here are 15 major GST return violations—many of which are not visible at surface level but can cause notices, ITC reversal, interest, or even audit.

1.  Wrong Filing in GSTR-1 Auto-Populates Incorrect GSTR-3B

Once you file GSTR-1 wrongly, it auto-fills 3B, and with portal restrictions increasing, manual corrections may not be allowed. Avoid mismatch in output tax and outward supplies.

2.  Non-Reversal of ITC under Rule 37A – Supplier Didn’t Pay Tax

Rule 37A mandates reversal of ITC if the supplier doesn’t deposit GST in their GSTR-3B by the 30th November of the next financial year. Recipient must track compliance of vendors or risk reversal and interest!

3.  No Reconciliation with GSTR-2B

2B is the final document for eligible ITC—not 2A. Ignoring reconciliation will lead to over-claimed ITC, which the system or officers can catch, leading to reversal with penalty.

4.  Purchase from Cancelled GSTINs

Claiming ITC on purchases from suppliers whose GSTIN is cancelled is invalid. This is easy to overlook unless vendor status is regularly checked on the portal.

5.  Non-Compliance with Rule 86B

If monthly turnover exceeds ₹50 lakh, 1% of GST must be paid in cash. Ignoring this can lead to system restrictions or filing blockage.

6.  Failure to Pay Vendors Within 180 Days

Under Section 16(2), if payment isn’t made within 180 days, ITC must be reversed with interest, and can only be reclaimed after actual payment. This is a red flag in assessments.

7.  ITC Reversal for Exempt Supplies Not Done (Rule 42/43)

If you deal in both taxable and exempt goods/services, a proportionate reversal under Rule 42 (inputs/services) & 43 (capital goods) is mandatory, but frequently skipped.

8.  Miscellaneous Incomes Not Reported

Scrap, commission, penalties, forex gains — all such miscellaneous incomes are taxable. They must be disclosed in outward supplies or else mismatches will occur with ITR.

9.  No GST Paid on Advance Received

For certain goods and all services, GST is applicable on advance receipt. If not declared properly, mismatches between books and GSTR-1/3B arise.

10.  RCM Liability Ignored on Common Expenses

Expenses like freight (GTA), advocate fees, rent from unregistered persons, director remuneration may attract RCM. Not discharging this liability = non-compliance + ITC ineligibility.

11.  Incorrect Valuation of Related Party Transactions

Even if no consideration is involved, GST valuation rules apply to transactions with sister companies, branches, or directors. Use open market value or Rule 28 provisions.

12.  Late GSTR-1 Filing – No Late Fee, But Notice Still Possible

Many think they’re safe if no late fee shows on portal, but officers can issue notice under Section 46 or 122, demanding penalty for late filing.

13.  Capital Goods Supplied but ITC Not Reversed as per Rule 40(2)

When capital goods or plant & machinery are sold, transferred, or disposed of, the remaining Input Tax Credit must be reversed.

As per Rule 40(2) of CGST Rules, ITC is reduced by 5% per quarter (or part) from the date of invoice till the date of disposal. If not reversed or taxed correctly, this attracts GST audit objections and recovery with interest.

Example: If a machine purchased in Jan 2023 is sold in June 2025 (i.e., 10 quarters later), 50% of ITC (5% × 10) must be reduced from the originally claimed ITC, and only the balance can be retained or taxed on the transaction value—whichever is higher.

14.  Wrong HSN/SAC Code Reporting

Incorrect HSN/SAC leads to rate mismatch, especially now with auto-mapping of e-invoices & e-way bills. Mandatory HSN disclosure applies to most taxpayers.

15.  Incorrect Reporting in Table 4 of GSTR-3B

Misplacing RCM ITC, import ITC or credit notes in wrong heads can lead to mismatches in GSTR-9 and audit flags.

Situations Where ITR Filing Won’t Be Required in 2025

Every year, the Income Tax Department of India updates its rules and requirements for filing Income Tax Returns (ITR). For Assessment Year 2025-26 (Financial Year 2024-25), it’s important to understand who is exempt from filing ITRbased on their income sources and limits.

In this article, we will explain which individuals do not need to file ITR in 2025, and under what conditions this exemption is allowed.

Individuals with Income Below the Taxable Limit

If your total income from all sources is below the basic exemption limit, you are not required to file an ITR.

Basic Exemption Limits (FY 2024-25):

Example: If a 59-year-old individual has an annual income of ₹2.90 lakh and does not claim any deductions or exemptions, they are not required to file ITR.

Individuals with Only Interest or Pension Income and No TDS

If your income comes only from savings account interest, fixed deposits, or pension and no TDS has been deducted, and your income is within the exemption limit, then filing ITR is not mandatory.

Individuals with Only Agricultural Income (Below Limit)

If you have only agricultural income, and it is below ₹5,000, you are not required to file ITR.

However, if your agricultural income exceeds ₹5,000, and your non-agricultural income exceeds the basic exemption limit, ITR filing becomes mandatory under the rule of partial integration.

Housewives or Students with No Taxable Income

If a housewife or student has no taxable income or only receives gifts, allowances, or pocket money from family (which are not taxable), then there is no need to file an ITR.

NRIs with No or Minimal Indian Income

Non-Resident Indians (NRIs) who do not earn income in India, or whose Indian income is less than ₹2.5 lakh, are not required to file an ITR.

Income Only from Dividends and Savings Interest Below Limit

If your income comes only from dividends and savings interest and it remains below the basic exemption limit, then filing ITR is not necessary.

ITR Filing Not Required for Specified Senior Citizens – Section 194P

Section 194P of the Income Tax Act (introduced from FY 2021–22) provides relief to certain senior citizens (75 years or above) from filing ITR if the following conditions are met:

Eligibility for ITR Exemption under Section 194P:

1. The individual is a Resident Senior Citizen aged 75 years or above.
2. The senior citizen has only pension income and interest income from the same bank.
3. The senior citizen has submitted a declaration to the bank in a prescribed form.
4. The bank is a specified bank notified by the Income Tax Department.
5. The bank computes and deducts tax on such income after giving effect to deductions (like 80C, 80D, etc.).

 If all conditions are satisfied, the senior citizen is not required to file an ITR. The bank is responsible for deducting the appropriate tax.

 Example:

Mr. Sharma, aged 77, earns:

• ₹4.8 lakh pension,
• ₹1 lakh interest from the same SBI branch,
• Submits Form 12BBA to SBI for deductions and tax computation.

 In this case, SBI will deduct tax, and Mr. Sharma is exempt from filing ITR.

Situations Where ITR Filing is Mandatory Despite No/Zero Income

Even if your income is below the exemption limit, you must file ITR if:

• You are a director in a company or partner in an LLP
• You have deposited over ₹1 crore in a bank account in a year
• You spent over ₹2 lakh on foreign travel
• Your electricity bill exceeds ₹1 lakh in a year
• TDS Deducted of Rs.25000 or more (Rs.50000 for senior citizens)
• If Turnover of business is 60 Lakh or more and receipts from profession is 10 lakh of more
• You are claiming a tax refund

Exemption from ITR filing is available to specific categories of taxpayers based on their income type and amount. If you fall under any of the above categories and your income is below the threshold, you are not required to file an ITR.

However, filing ITR is always beneficial, even when not mandatory. It helps in:

• Getting loans
• Visa applications
• Income proof for future references
• Claiming TDS refunds

Therefore, take an informed decision after understanding your income structure.

Recover Your GST ITC on Rejected Invoices & Credit Notes | Latest IMS Update

With the implementation of the Input Services Matching (IMS) functionality under GST, taxpayers now have better control and visibility over their Input Tax Credit (ITC). However, challenges arise when records are inadvertently rejected on IMS. This article addresses key queries and solutions regarding wrongly rejected documents such as Invoices, Debit Notes, ECO-documents, and Credit Notes.

 Question 1:

How can a recipient avail ITC of wrongly rejected Invoices/Debit notes/ECO-Documents in IMS when GSTR-3B of the same period has already been filed?

 Solution:
The recipient should request the supplier to report the same document (unchanged) in:

• GSTR-1A of the same return period, or
• Amendment table of GSTR-1/IFF of a subsequent period.

Once this is done, the recipient can accept the amended record on IMS and recompute GSTR-2B, thereby becoming eligible to claim full ITC of the re-reported record.

 Note: ITC will only reflect in the GSTR-2B of the concerned tax period in which the record is furnished again.

 Question 2:

If an original record is wrongly rejected by the recipient and is re-furnished by the supplier, what will be the impact on the supplier’s liability?

 Clarification:
If the same value is re-furnished in:

• GSTR-1A of the same period, or
• Amendment table of a future GSTR-1/IFF,

Then the supplier’s liability will not increase, since the amendment reflects only the delta value (i.e., the net change, which is zero in this case). Thus, there is no additional tax liability on the supplier.

 Question 3:

How can a recipient reverse ITC of a wrongly rejected Credit Note in IMS if GSTR-3B is already filed?

 Solution:
The recipient should request the supplier to re-furnish the same Credit Note (unchanged) either in:

• GSTR-1A of the same return period, or
• Amendment table of subsequent GSTR-1/IFF.

Upon accepting the CN on IMS and recomputing GSTR-2B, the recipient’s ITC will get reduced by the entire value of the CN.

 Question 4:

What is the supplier’s liability if a rejected Credit Note is re-furnished?

 Clarification:
Initially, the supplier’s liability increases due to rejection of the CN.
However, once the same CN is re-furnished, the liability gets reduced again, ensuring that the net liability effect is only once.

 Summary Table

GST Advisory: Filing of Old Returns to Be Blocked from August 2025

In accordance with the amendments introduced through the Finance Act, 2023 (No. 8 of 2023), dated 31st March 2023, and implemented with effect from 1st October 2023 via Notification No. 28/2023 – Central Tax, dated 31st July 2023, a critical compliance update has been enforced for all GST-registered taxpayers.

 Key Compliance Alert

Taxpayers shall not be allowed to file GST returns after the expiry of three years from the original due date of furnishing the said return. This time limit is applicable for returns filed under the following sections of the CGST Act:

• Section 37 – Outward Supplies (e.g., GSTR-1, IFF)
• Section 39 – Monthly/Quarterly Returns and Payment of Liability (e.g., GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6)
• Section 44 – Annual Return (e.g., GSTR-9, GSTR-9C)
• Section 52 – Tax Collected at Source (e.g., GSTR-7, GSTR-8)

Accordingly, the filing of these returns will be barred after three years from their respective due dates.

 Effective Date of Restriction

This provision will be implemented on the GST portal starting with the July 2025 tax period. Therefore, any pending return with a due date falling before August 1, 2022, will become non-fileable on or after 1st August 2025.

 Advisory Note Issued Earlier: GSTN had already issued an advisory regarding this change on October 29, 2024, to help taxpayers prepare in advance.

 Illustrative Table of Returns That Will Be Barred from August 1, 2025

 Advisory to Taxpayers

All taxpayers who have not yet filed their returns for the above-mentioned periods are strongly advised to take immediate action:

• Review and reconcile your GST records.
• Identify pending returns that are older than three years from their respective due dates.
• File such returns without delay to avoid permanent loss of filing rights and potential non-compliance consequences.

 Conclusion

This is a crucial opportunity for defaulting taxpayers to regularize their GST compliance before the three-year time bar becomes effective from 1st August 2025. No further extensions or relief will be available for such late returns after this deadline.

Act now to avoid irreversible compliance gaps.

Thanking You,
Team EasySmartShop