PAN to Be Declared Inoperative After 31 December 2025 — Know the Impact and Steps to Complete the Linking

If you’ve been putting off your PAN–Aadhaar linking thinking you’ll handle it “sometime soon,” that moment has officially arrived. The deadline is fast approaching, and 31 December 2025 is the final date to link your Permanent Account Number (PAN) with Aadhaar. Missing this cut-off will make your PAN inoperative, which can severely impact essential tax activities — from filing your ITR to receiving refunds.

For millions of taxpayers, PAN is far more than just a plastic card or an alphanumeric code. It serves as the primary identifier for every financial interaction with the Income Tax Department. Whether it involves monitoring advance tax, reconciling TDS/TCS, processing income tax returns, or clearing refunds — PAN is central to the entire compliance ecosystem. Linking Aadhaar with PAN enables the government to prevent duplicate PANs, reduce tax evasion, and ensure accurate matching of financial records.

Who Needs to Link PAN with Aadhaar? — CBDT Guidelines

The Central Board of Direct Taxes (CBDT) has clearly stated:

Any individual who has been allotted both PAN and Aadhaar on or before 1 October 2025 must link the two by 31 December 2025.

Failure to do so will make the PAN inoperative from 1 January 2026.

Consequences of an Inoperative PAN

An inoperative PAN is not cancelled, but in practice, it functions as if you don’t have a PAN at all. This leads to several disruptions in routine tax and financial operations:

❌ 1. Cannot file Income Tax Returns

The e-filing portal will not permit filing of ITRs using an inoperative PAN.

❌ 2. Refunds will be withheld

Any refund due will remain pending until the PAN is reactivated.

❌ 3. Pending return proceedings will be impacted

Processes such as defective returns (u/s 139(9)), updated returns (u/s 139(8A)), and assessments requiring PAN authentication will not progress.

❌ 4. Higher TDS/TCS rates

You will be considered a taxpayer “without PAN” under Sections 206AA and 206CC, resulting in deduction/collection of tax at higher rates.

❌ 5. Problems in high-value transactions

Banks, mutual funds, and other financial institutions may reject or hold transactions where PAN verification is mandatory.

In essence, allowing your PAN to become inoperative can lead to compliance setbacks, financial delays, and unnecessary complications.

Step 1: Visit the Income Tax e-Filing Website

Open the official portal: www.incometax.gov.in
On the homepage, look for the Quick Links section.

Step 2: Select ‘Link Aadhaar’

Clicking this option will open a form where you must provide:

  • Your 10-digit PAN

  • Your 12-digit Aadhaar number

  • Name exactly as it appears on Aadhaar

Tick the declaration confirming that the details are correct, then press Validate.

Step 3: Pay the Linking Fee (If Applicable)

A late fee of ₹1,000 is required if the linking is done after the previous deadline.

If your payment is not already registered, the system will show:
“Payment details not found.”

Click Continue to Pay Through e-Pay Tax, and complete the payment using the following path:

Payment Procedure

  1. Enter your PAN and mobile number, then verify via OTP.

  2. On the e-Pay Tax dashboard, choose:

    • Assessment Year: 2025–26

    • Type of Payment: Other Receipts (500)

    • Sub-type: Fee for delay in linking PAN with Aadhaar

  3. The portal will automatically fill the amount as ₹1,000.

  4. Select your payment method and finish the transaction.

A Challan will be generated — keep this for future reference.

Step 4: Complete the Aadhaar–PAN Linking Request

Return to the Link Aadhaar page and:

  • Enter PAN, Aadhaar, and Name again

  • Submit the OTP sent to your Aadhaar-linked mobile number

  • Click Validate

Your linking request will now be submitted.

How to Check Your Aadhaar–PAN Linking Status

You can verify the status in a few seconds:

  1. Visit www.incometax.gov.in

  2. Under Quick Links, click Link Aadhaar Status

  3. Enter your PAN and Aadhaar

  4. Select View Link Aadhaar Status

You will see one of the following responses:

✔ Linked

“Your PAN is already linked with Aadhaar.”

❌ Not Linked

You will be asked to complete the linking process.

⏳ Pending Verification

Your request has been forwarded to UIDAI for confirmation.

With 31 December 2025 being the final deadline, taxpayers are strongly advised to finish the Aadhaar–PAN linking process at the earliest.
An inoperative PAN can lead to a cascade of compliance problems — including stalled refunds, higher TDS rates, and delays in processing income-tax matters.
The entire procedure requires only a few minutes and ensures seamless tax compliance going forward.

Auto Suspension of GST Registration Under Rule 10A: What Taxpayers Need to Do Right Now

Introduction

Rule 10A of the CGST Rules makes it compulsory for newly registered taxpayers to provide their bank account details shortly after getting their GST registration. The rule aims to curb fake registrations, strengthen KYC verification, and ensure that only genuine businesses operate under the GST framework.

GSTN has now rolled out a stricter system that automatically suspends GST registrations if bank details are not submitted within the required time. This guide breaks down the updated rule, system automation, compliance steps, and what taxpayers should do to avoid suspension.

1. What Rule 10A Requires

Every registered taxpayer must provide their valid bank account details:

  • Within 30 days from the grant of registration, or

  • Before filing the first GSTR-1 or IFF,
    whichever happens first.

Who needs to comply

✔ Regular taxpayers
✔ Composition dealers
✔ Casual taxable persons
✔ SEZ units and developers

Who is exempt

❌ TCS collectors
❌ TDS deductors
❌ Suo-moto registrations
❌ OIDAR & NRTP (with an exception explained later)

2. Auto-Suspension of GST Registration

If a taxpayer does not upload their bank details within the deadline, the GST portal will:

→ Auto-suspend the GST registration

You can view the suspension order under:

Services → User Services → View Notices and Orders

What happens during suspension

  • Filing of GSTR-1/IFF is blocked

  • E-way bill generation stops

  • Changes to core fields are restricted

  • ITC to recipients may be flagged or blocked

  • Business operations may face disruptions

This entire process is system-driven, with no officer approval required.

3. How to Add Bank Account Details

Bank details can be added online through:

Services → Registration → Amendment of Registration (Non-Core Fields)

You’ll need:

  • Bank account number

  • IFSC code

  • Cancelled cheque / bank statement (as per portal format)

Once submitted, the details are updated in your registration profile.

4. Automatic Closure of Cancellation Proceedings

If the only reason for suspension was missing bank details, then:

→ The system will automatically drop the cancellation proceedings

once the bank details are added.

Your registration becomes active again without manual intervention.

5. When Auto-Drop Doesn’t Happen

Sometimes the automatic update may take longer. In that case, taxpayers can manually request closure:

Services → User Services → View Notices and Orders → Initiate Drop Proceedings

This option helps close the cancellation proceedings after the bank details are updated.

6. Special Cases & Exceptions

OIDAR & NRTP

Bank details are not mandatory unless:

  • The OIDAR taxpayer selects “Representative Appointed in India – Yes”

In that situation, bank account details must be provided to ensure traceability within India.

7. What It Means for Taxpayers

Why This Matters

Not adding bank details on time can lead to:

  • Automatic suspension of GST registration

  • Inability to issue invoices properly

  • E-way bill blockage

  • Disruption of ITC for customers

  • Possible cancellation of registration

Best Practices

  • Upload bank details immediately after receiving your GSTIN

  • Keep your cheque/bank statement ready

  • Check notices regularly on the portal

  • Ensure bank details are entered correctly to avoid delays

Conclusion

The auto-suspension rule under Rule 10A makes timely KYC compliance more crucial than ever. Submitting bank account details is now one of the first and most important steps after obtaining GST registration. With automated suspension and reinstatement features, taxpayers must stay alert and ensure compliance to avoid interruptions in business activities.

FM Sitharaman announces tax proposal for demerit goods only, keeping essential goods exempt

Finance Minister Nirmala Sitharaman on Thursday clarified that the proposed Health and National Security Cess will apply only to demerit goods such as pan masala, and not to any essential commodities. She added that the revenue collected from this cess will be shared with states for health-related programmes.

Introducing the Health and National Security Cess Bill, 2025 in the Lok Sabha, the minister said the objective is to create a dedicated and stable source of funds for two key areas — health and national security.

“This cess is not being imposed on essential items. It is targeted at demerit goods that pose serious health risks. The intent is to create a deterrent so that consumption of such products declines,” Sitharaman said.

She noted that pan masala will attract the maximum 40% GST rate, in line with its consumption-based tax structure, and the new cess will not affect GST revenues. Instead, the cess will be charged over and above GST, based on the production capacity of machines installed in pan masala factories.

“The cess liability will vary for each unit depending on its production capacity,” the minister explained.

Since GST is levied at the consumption stage and excise duty cannot be applied to pan masala, the government has proposed this cess to ensure the product is appropriately taxed as a demerit good.

A portion of the cess revenue will be distributed to states for health awareness and other health-related activities, she said.

Sitharaman added that because excise duty cannot be levied on pan masala, a separate cess law is required to tax its production — alongside GST, which continues to apply at the consumption level.

Currently, pan masala, tobacco, and similar products attract 28% GST plus a variable compensation cess. After the compensation cess ends, the GST on these items will rise to 40%. Along with this, tobacco will also be subject to excise duty, and pan masala to the new Health and National Security Cess.

On Wednesday, the Lok Sabha passed a Bill amending the Central Excise Act, 1944, enabling excise duty on tobacco products in addition to the 40% GST.

Both the tobacco excise Bill and the new cess Bill come as the GST compensation cess nears its expiry, since loan repayments are expected to conclude in the coming weeks.

When GST was introduced on July 1, 2017, a compensation cess was implemented for five years to offset states’ revenue losses until June 30, 2022. It was later extended until March 31, 2026, with collections being used to repay the ₹2.69 lakh crore borrowed to compensate states during the Covid period.

SC rules that renting residential premises for student hostel use is exempt from GST

NEW DELHI: The Supreme Court on Thursday ruled that leasing a residential property to an organisation that uses it as a hostel for students and working professionals is exempt from GST.

A bench comprising Justices JB Pardiwala and KV Viswanathan upheld the Karnataka High Court’s judgment, which had earlier held that renting a residential premises to an entity running a hostel for students and professionals qualifies for GST exemption.

The bench noted that the end-use of the property remains residential, and imposing 18% GST on the lease agreement between the property owners and M/s DTwelve Spaces Private Limited would ultimately burden students and working professionals. This, the court said, would defeat the legislative intent behind granting exemption for residential use.

The case involved a co-owner of a residential property with 42 rooms in Bengaluru. The owners had leased the property to M/s D Twelve Spaces Private Limited, which then operated it as a long-term hostel, with stays ranging from 3 to 12 months.

Seeking clarity on whether the leasing service qualified for GST exemption, the petitioner approached the Karnataka Authority for Advance Ruling (AAR). The AAR held that renting a residential dwelling for use as a residence did not fall under the exemption entry.

On appeal, the Appellate Authority for Advance Ruling (AAAR) maintained that a hostel is not a residential dwelling and denied the exemption.

However, the Karnataka High Court disagreed and ruled that leasing a residential property for use as a hostel for students and professionals is indeed exempt from GST—a view now affirmed by the Supreme Court.

GSTN Releases Advisory on Suspension of GSTR-3B Filing Access Effective December 2025

Purpose of Table 3.2 in GSTR-3B

Table 3.2 of Form GSTR-3B is meant to capture details of inter-state outward supplies made to the following categories:

  • Unregistered buyers (B2C)

  • Composition scheme taxpayers

  • UIN holders

These figures are automatically drawn from the taxable supplies declared in Table 3.1 / 3.1.1 of GSTR-3B, and are system-generated on the basis of data reported in GSTR-1, GSTR-1A and IFF.

🔔 Important Update (Effective From the November 2025 Tax Period)

1️⃣ Table 3.2 Will No Longer Be Editable

Starting from the November 2025 return period, the values auto-populated in Table 3.2 of GSTR-3B will be locked and cannot be altered by taxpayers.
GSTR-3B must be filed strictly using the system-generated numbers.

This change aims to ensure seamless reconciliation between outward supply reporting (GSTR-1/IFF) and tax payment (GSTR-3B).

🔄 What To Do If Auto-Populated Values Are Wrong?

Corrections cannot be made in GSTR-3B.

2️⃣ Revisions Must Be Made Through GSTR-1A

If the figures in Table 3.2 are incorrect due to wrong reporting in GSTR-1/IFF, taxpayers should:

  • File GSTR-1A for the same tax period to amend the entries.

  • Once GSTR-1A is submitted, the changes will automatically reflect in Table 3.2.

  • GSTR-3B can then be filed using the updated values.

Additional amendments can still be made later through GSTR-1/IFF of subsequent months, as per the normal amendment rules.

✔ Compliance Advisory

To minimize mismatches and avoid repeated corrections:

3️⃣ Ensure Correct Reporting in GSTR-1 / GSTR-1A / IFF

Taxpayers should:

  • Review draft GSTR-1 or GSTR-1A carefully.

  • Verify proper classification of inter-state supplies.

  • Pay special attention to B2C inter-state reporting.

  • File returns only after confirming the accuracy of all entries.

Since GSTR-3B will rely solely on system-populated values, accurate reporting in GSTR-1/GSTR-1A is crucial.

📌 Frequently Asked Questions (FAQs)

Q1. What is the new rule for Table 3.2?

From November 2025 onward, Table 3.2 of GSTR-3B becomes completely non-editable.
Taxpayers must use the auto-populated data derived from GSTR-1/GSTR-1A/IFF without any manual changes.

Q2. How can incorrect auto-populated values be corrected?

If the values are incorrect due to wrong entries in GSTR-1/IFF:

  • File GSTR-1A for that tax period to modify details.

  • After submission, the revised values will instantly update Table 3.2.

  • Then you can proceed with filing GSTR-3B.

Further amendments can always be made in GSTR-1/IFF of upcoming periods.

Q3. How can I ensure error-free reporting in Table 3.2?

  • Double-check all outward supply data before filing GSTR-1 or GSTR-1A.

  • Immediately fix any inaccurate entries through GSTR-1A.

  • Ensure correct classification of inter-state B2C supplies.

  • Maintain consistency between outward supply returns and tax payment returns.

Accurate reporting prevents mismatches and avoids unnecessary compliance issues.

Q4. Until when can I file GSTR-1A for correcting Table 3.2 values?

GSTR-1A can be filed anytime after GSTR-1 is filed and up until GSTR-3B is submitted for that period.

This means you can correct Table 3.2 through GSTR-1A right up to the filing of GSTR-3B.

GSTN Releases Fresh FAQs on GSTR-9/9C for FY 2024-25 – What You Must Know

FAQs on GSTR-9/9C for FY 2024–25

Issued on: 4 December 2025

GSTN has released an additional set of Frequently Asked Questions (FAQs) based on feedback and queries received from various stakeholders. These FAQs (dated 04-12-2025) aim to help taxpayers better understand the reporting requirements for different tables of GSTR-9 and GSTR-9C, especially concerning value disclosures and reconciliations.
Access the complete FAQ document by clicking here.

— Team GSTN

Enroll in Our Practical Course on GSTR-9/9C (FY 2024-25)

Includes:

  • GSTR-9/9C for FY 2024-25 & 2023-24

  • Reconciliation: 2B vs 2A and 2B vs Books

GST FAQs – Summary of Key Queries & GSTN Replies

S. No. Query GSTN Reply
1 I paid RCM GST for FY 2024-25 in the GSTR-3B of FY 2025-26. Should this liability and corresponding ITC be disclosed in GSTR-9 of FY 2024-25 or FY 2025-26? The RCM liability and related ITC must be reported in GSTR-9 of FY 2025-26.

Explanation: As clarified by CBIC in the press release dated 03-07-2019, RCM tax should be reported in the year in which it is actually paid, along with applicable interest. Accordingly, both payment and ITC are to be shown in the Annual Return of the year of payment.
2 Ineligible ITC of FY 2023-24 was availed and reversed in FY 2024-25. Instructions say ITC availed relating to FY 2023-24 should be shown in Table 6A1 of GSTR-9 for FY 2024-25. But where should the reversal be shown? The ITC of FY 2023-24 claimed in FY 2024-25 should indeed be shown in Table 6A1.

However, the reversal of such ITC should NOT be reported in Table 7 of GSTR-9 for FY 2024-25, since Table 7 relates only to current year (2024-25) ITC reversals.
3 Table 12B of GSTR-9C seems irrelevant because Table 7J of GSTR-9 doesn’t consider ITC of FY 2023-24 claimed or reversed in FY 2024-25. Table 12B is meant to capture ITC booked in earlier years but claimed in the current year. Therefore, the figure will not appear in Tables 12A or 12E, which may create mismatches.

If unreconciled differences arise in Table 12F, taxpayers should provide reasons in Table 13 of GSTR-9C.
4 Table 7J of GSTR-9 doesn’t include Table 6A1, causing a mismatch with Table 4C of GSTR-3B for FY 2024-25. Table 4C of GSTR-3B may include ITC relating to FY 2023-24 that was claimed or reversed in FY 2024-25.

However, Table 7J of GSTR-9 includes only net ITC pertaining to FY 2024-25, so differences may occur wherever prior-year ITC adjustments were made in FY 2024-25.
5 How should ITC reversed during FY 2024-25 relating to FY 2023-24 be disclosed in GSTR-9? Should it be reduced from Table 6A1 or shown in Table 7? ITC of FY 2023-24 reversed in FY 2024-25 should not be reported anywhere in GSTR-9 of FY 2024-25. Table 7 contains reversals only for the current year, so this reversal is excluded.
6 ITC reflected in 2B for FY 2023-24 but goods received in April 2024 (FY 2024-25), ITC claimed in FY 2024-25. Should this be reported in Table 6A1 only, and how to manage mismatches in GSTR-9C? ITC pertaining to FY 2023-24 should not form part of FY 2024-25 audited financials. However, reporting depends on the accounting method adopted.

Values in Tables 12A to 12C should align with the taxpayer’s accounting methodology. Any mismatch in Table 12F may be explained in Table 13 of GSTR-9C.
7 Where should non-GST purchases be reported in GSTR-9? Non-GST purchases do not have a designated table in GSTR-9 and therefore do not need to be reported.
8 Is Table 4G1 of GSTR-9 applicable only to e-commerce operators? Yes. Table 4G1 is to be filled only by e-commerce operators liable to pay tax under Section 9(5) of the CGST Act.
GSTR-3B Data Access to Be Blocked from December 2025, Says GSTN

Table 3.2 in GSTR-3B – Reporting Framework and New Restrictions

Table 3.2 of Form GSTR-3B captures details of inter-state outward supplies made to the following categories:

  • Unregistered persons

  • Composition taxpayers

  • UIN holders

The values reported in this table are system-generated based on the aggregate outward supplies declared in Table 3.1 and Table 3.1.1 of GSTR-3B. They are auto-populated using data furnished in GSTR-1, GSTR-1A, and IFF.

Key Update – Effective for the November 2025 Tax Period

1. Table 3.2 Will Become Non-Editable

Starting from the November 2025 return period, taxpayers will no longer be able to manually modify the numbers appearing in Table 3.2.

The system-generated figures must be used as-is while filing GSTR-3B.

This measure aims to strengthen consistency between the outward supply returns (GSTR-1 / IFF) and the tax liability reported in GSTR-3B.

Making Corrections to Auto-Populated Table 3.2 Values

In case the values shown in Table 3.2 are incorrect due to mistakes made in GSTR-1 or IFF:

2. Revisions Can Be Made Only Through GSTR-1A

Taxpayers may:

  • Rectify or amend the relevant entries in GSTR-1A for the same tax period.

  • Once GSTR-1A is submitted, Table 3.2 is updated instantly, allowing filing of GSTR-3B with the corrected figures.

Further amendments, if required, may still be made in the GSTR-1/IFF of subsequent tax periods in accordance with standard amendment provisions.

Recommended Compliance Practices

3. Ensure Accurate Reporting in GSTR-1 / GSTR-1A / IFF

To avoid mismatches and repeated amendments, taxpayers should:

  • Carefully verify the draft GSTR-1 or GSTR-1A before submission.

  • Ensure correct classification of inter-state supplies.

  • Review B2C inter-state reporting thoroughly.

  • File GSTR-1/GSTR-1A only after confirming accuracy, since GSTR-3B will rely entirely on system-populated values.

Proper reporting ensures seamless auto-population of Table 3.2 without discrepancies.

Frequently Asked Questions (FAQs)

Q1. What is the new rule regarding Table 3.2?

From the November 2025 tax period onward, Table 3.2 of GSTR-3B will be non-editable. Taxpayers must file GSTR-3B using the auto-populated values sourced from GSTR-1/GSTR-1A/IFF.

Q2. How can incorrect values be corrected?

If errors arise due to incorrect GSTR-1 reporting:

  • Make necessary amendments in GSTR-1A for that specific tax period.

  • GSTR-1A instantly updates Table 3.2.

  • File GSTR-3B thereafter with the corrected figures.

Additional corrections may later be made in GSTR-1/IFF of following periods.

Q3. How can taxpayers ensure accuracy in Table 3.2?

  • Cross-verify all outward supply details before filing GSTR-1/GSTR-1A/IFF.

  • Immediately correct mistakes using GSTR-1A.

  • Accurately report inter-state B2C supplies.

  • Maintain consistency between outward supply returns and tax payment returns to avoid issues.

Q4. What is the deadline for filing GSTR-1A for Table 3.2 corrections?

GSTR-1A can be filed anytime after GSTR-1 is filed and up to the moment GSTR-3B is filed for the same tax period.

Therefore, corrections to Table 3.2 can be made using GSTR-1A right until GSTR-3B filing.

Income Tax Refunds: 31st December 2025 Is the Cut-off Date

Every year, many taxpayers either miss or postpone filing their Income Tax Return (ITR). However, the Income-tax Act allows you to claim a refund only if your ITR is filed within the prescribed time limit.

For Assessment Year (AY) 2025–26, the absolute last date to file a belated or revised ITR and secure any pending refund is:

➡️ 31 December 2025

Missing this deadline means your refund lapses — you permanently lose the right to claim the amount due to you.

📌 Why 31 December 2025 Is the Final Deadline

As per Sections 139(4) and 139(5) of the Income-tax Act:

  • A belated return (late ITR), and

  • A revised return (corrected ITR)

…can be filed only up to 31 December of the relevant assessment year.

For AY 2025–26:

  • The assessment year begins on 1 April 2025, and

  • The last permissible date to file a belated or revised ITR is 31 December 2025.

After this date, the income tax portal will not accept your return unless:

  • The government announces an extension (which is uncommon), or

  • You apply for Condonation of Delay under Section 119(2)(b) — a time-consuming process with no assurance of approval.

    What happens if you miss the 31 December 2025 ITR deadline?

    1️⃣ You forfeit any income-tax refund
    All types of refundable tax will become unclaimable if you don’t file on time: TDS on salary, TDS on fixed-deposit interest, TDS on professional fees, or any excess tax paid as advance/self-assessment tax.

    2️⃣ No chance to correct past mistakes
    You can only submit a revised return up to 31 Dec 2025. After that the law won’t let you fix errors in earlier returns.

    3️⃣ You lose the ability to carry forward losses
    Certain losses are allowed to be carried forward only if the ITR is filed within the due period. These include: business losses, speculative losses, capital-gains losses, and losses from racehorse ownership. Miss the deadline → you forfeit carry-forward claims.

    4️⃣ Penalties, interest and compliance notices
    Failing to file may invite:

    • Late-filing fee under Section 234F,

    • Interest under Sections 234A/234B/234C,

    • Automated compliance flags for AIS/TIS mismatches, and

    • System-generated notices where TDS doesn’t match the ITR.

    Who should definitely file by 31 Dec 2025?

    • ✅ Anyone expecting a refund (TDS deducted)

    • ✅ Individuals with taxable income after deductions

    • ✅ Salaried employees where employer TDS appears excessive

    • ✅ Freelancers, professionals and business owners (or anyone with books of account)

    • ✅ Senior citizens with TDS on bank FD interest

    • ✅ Students/interns/part-timers who had TDS deducted

    • ✅ Anyone who must revise a previously filed incorrect ITR

    Even if your taxable income is below the threshold, file if TDS was deducted or you maintain books — it preserves refund rights and documentation.

    Missed the deadline — any rescue options?

    Only limited, uncertain remedies:

    • Condonation of Delay (Section 119(2)(b)) — you can apply, but the CBDT may take 6–12 months to decide and may refuse the request. It’s not a reliable plan.

    • Updated ITR (ITR-U) can be filed later for corrections, but it does not allow claiming refunds.

    Don’t rely on these — they’re slow and uncertain.

    Practical tax-expert advice (short and actionable)

    • File your ITR before 31 Dec 2025 if a refund is due — even when income is below taxable limit.

    • Reconcile AIS, TIS, Form 26AS and bank interest entries before you file.

    • If you filed incorrectly earlier, revise the return before the 31 Dec deadline.

    • Remind family members (especially salaried employees and senior citizens) — many refund losses happen because people simply don’t know the deadline.

GST officers reprimanded by Allahabad HC for scrapping registrations without explaining the basis

Allahabad High Court Criticises GST Officials for Cancelling Registrations Without Citing Reasons

The Allahabad High Court has strongly criticised the GST department for routinely cancelling traders’ GST registrations without offering any justification. The court observed that such arbitrary action amounts to declaring the “economic death” of a business, as these casually issued cancellation orders impose severe and disproportionate hardship on taxpayers and disturb genuine commercial operations.

The bench emphasised that denying a dealer their statutory right to operate under GST without proper reasoning or a real chance to correct alleged mistakes runs contrary to the very principles on which the GST law is based.

Hearing a petition filed by Anil Art and Craft, the division bench of Justices Saumitra Dayal Singh and Indrajeet Shukla annulled an October 15 order of the Assistant Commissioner (State Tax), Bhadohi, which had cancelled the petitioner’s GST registration retrospectively from October 8.

The court directed that its judgment and a copy of the writ petition be forwarded to the commercial tax commissioner. Within 15 days, the commissioner has been asked to issue clear administrative instructions to all GST officers handling registration cancellations. These instructions must prescribe penalties for officers issuing non-speaking orders or denying reasonable opportunity to taxpayers, ensuring such lapses do not recur.

The petitioner had earlier received a show-cause notice alleging wrongful availment and transfer of fake input tax credit in violation of Section 16 of the GST Act. However, the court took serious note of how the officer handled the matter under the GST framework.

The judges pointed out that merely stating a reply is “not satisfactory” reflects only the final conclusion and not the reasoning behind it, falling short of the basic requirement of a reasoned administrative order. They added that the officer acted “carelessly” and in complete disregard of essential procedural safeguards.

Highlighting the gravity of cancelling a trader’s GST registration, the bench said that such an action effectively cripples the business — preventing it from issuing invoices and availing or passing on input tax credit. While the registration stands cancelled, all past tax liabilities and compliance obligations continue, making the impact even more severe.

The judgment dated November 20 noted that these casually passed cancellation orders impose undue hardship on traders and severely hamper legitimate business activity.

ITR Refund Delays: CBDT Chairman Explains the Reasons Behind the Hold-Up

The chairman of the Central Board of Direct Taxes (CBDT) on Monday issued a key update on the ongoing delays in processing income tax refunds for FY 2024–25. He noted that the department is currently reviewing cases where incorrect or questionable deductions may have been claimed.

According to the CBDT chief, several refund requests have been categorized as “high-value” or have been “red-flagged” by the system because of certain deduction-related claims.

Although the ITR filing deadline for this year was September 16, many taxpayers across the country are still awaiting their refunds.

The Chairman of the Central Board of Direct Taxes (CBDT) on Monday issued a key update on the ongoing delays in issuing income tax refunds for the financial year 2024–25. He noted that the department is currently reviewing instances where taxpayers may have incorrectly claimed certain deductions.

According to the chairman, several refund requests have been flagged by the system as either “high-value” or “suspicious” due to questionable deduction claims. Although the deadline for filing ITRs this year was September 16, many taxpayers across the country are still awaiting their refunds.

When can taxpayers expect their ITR refund?

CBDT Chairman Ravi Agrawal clarified that smaller-value refunds are already being processed, as reported by PTI. He added that all remaining refunds are expected to be issued either within this month or by December.

Agrawal explained that the department has detected several cases involving incorrect refund or deduction claims. These are currently under verification, he said, after inaugurating a taxpayer lounge at the ongoing India International Trade Fair (IITF).

Why are refunds getting delayed?

Agrawal said the delay is primarily due to a detailed review of wrongful or inaccurate deduction claims submitted by some taxpayers. Several refund requests have been categorised as “high-value” or have been red-flagged by the system because of discrepancies in the deductions claimed.

“We have also written to some taxpayers advising them to file a revised return if they have missed declaring any information,” he noted.

The chairman added that there is currently negative growth in refund volumes, which may be linked to a fall in refund claims even though TDS rates were rationalised.

According to PTI, refund issuances have dropped by around 18%, standing at over ₹2.42 lakh crore between April 1 and November 10.

Other Updates

Agrawal also mentioned that the department is working to reduce litigation in direct tax matters. Appellate authorities are making significant progress, with over 40% more appeals disposed of this year compared to last year. He expects the total number of resolved cases to be substantially higher by the end of the year.

Additionally, the Income Tax Department will soon release the new ITR forms and rules under the simplified Income Tax Act, 2025, which will take effect from the next financial year.