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.
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 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
GST Return Form
Latest Period That Will Be Barred (w.e.f. 1st August 2025)
GSTR-1 / IFF
June 2022
GSTR-1 (Quarterly)
April – June 2022
GSTR-3B (Monthly)
June 2022
GSTR-3B (Quarterly)
April – June 2022
GSTR-4
FY 2021–22
GSTR-5
June 2022
GSTR-6
June 2022
GSTR-7
June 2022
GSTR-8
June 2022
GSTR-9 / 9C
FY 2020–21
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.
The Income Tax Department has notified the income tax return forms for FY 2024-25 (AY 2025-26), incorporating the changes in tax laws announced in the July 2024 budget. However, taxpayers will have to wait for the release of the ITR filing e-utilities on the income tax portal to file their ITR.
ET Wealth Online explains the nine changes made in this year’s ITR forms that will make your ITR filing process easier for FY 2024-25 (AY 2025-26).
Changes in ITR forms for FY 2024-25 (AY 2025-26)
1. Expansion of eligibility to file ITR 1 and ITR 4: This year, the Income Tax Department has expanded the eligibility by relaxing the eligibility criteria, making more taxpayers eligible to file their tax return using ITR 1 and ITR 4. The new rules allow even taxpayers with long-term capital gains from equity and equity mutual funds to file a tax return using ITR1 and ITR 4 (as applicable), provided the capital gains do not exceed Rs 1.25 lakh.
Expert says, “The Budget 2024 increased the LTCG exemption limit on listed equity and equity mutual funds from Rs 1 lakh to Rs 1.25 lakh. In previous years’ ITR forms, even if a taxpayer’s LTCG under Section 112A was within the exemption limit and there was no tax payable, the presence of capital gains income made them ineligible to file the simpler ITR-1 forms. Instead, they were required to file the return in ITR-2 or ITR-3 forms, which are more complex and time-consuming. This resulted in a genuine hardship for small taxpayers. To address this, the Central Board of Direct Taxes (CBDT) has notified that taxpayers are eligible for filing ITR-1 and ITR 4, even if they have LTCG under Section 112A, provided the total LTCG does not exceed Rs 1.25 lakh and there is no brought forward or carry forward capital loss. This move eases the compliance burden and simplifies return filing for small taxpayers with limited capital gains with no losses to be brought forward.”
2. Aadhaar enrolment ID not acceptable: One of the quiet changes made in Budget 2024 was removal of the acceptance of the Aadhaar enrolment ID for the PAN application, and also at the time of filing the ITR. Post this amendment, PAN applications and ITRs can no longer be filed using Aadhaar enrolment ID instead of the actual Aadhaar number. This year’s income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) have been amended to remove the column to enter the Aadhaar enrolment ID.
Expert says, “The ITR forms for FY 2024-25 (AY 2025-26) do not have the Aadhaar Enrolment ID column this year. If the taxpayers do not have an Aadhaar number, then they will not be able to file ITR this year.”
3. Opting out of new tax regime by small business owners: Taxpayers having business income cannot switch/choose tax regimes every financial year, unlike individuals who don’t have business income. As per the income tax rules, taxpayers having business income have once in a lifetime option to switch from the old to the new tax regime. However, this switching requires submission of a form to the tax department.
Expert says, “The previous year ITR-4 simply asked whether the taxpayer had opted out of the new tax regime. If yes, then the taxpayer was required to provide the date and acknowledgement number of Form 10-IEA if applicable. However, the ITR-4 for FY 2024-25 (AY 2025-26) has introduced a more detailed disclosure. It now seeks confirmation of past filings of Form 10-IEA and asks whether the taxpayer wants to continue opting out of the new Tax Regime in the current year.”
4. Mention TDS section in ITR form: This year’s income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) require taxpayers to mention the TDS section under which tax was deducted from the income earned in FY 2024-25.
Expert says, “The requirement to mention the TDS section in the ITR form is applicable if tax is deducted on income other than salary. Earlier, there was no requirement to mention the TDS section in the ITR form while claiming the tax credit. However, from this year, a taxpayer must mention the section under which the benefit of TDS credit is being taken.”
5. New capital gains rules incorporated in ITR forms: Budget 2024 announced new capital gains rules, effective July 23, 2024. Hence, if you have made capital gains by selling listed or unlisted shares, equity mutual funds, houses, land, or any other capital asset, then the date of sale is important to calculate the correct capital gains amount and the appropriate tax on it.
Expert says, “Taxpayers should check the date of sale and transfer of the capital asset to know whether the tax will be calculated based on the old rules or new rules. If the transfer date is before July 23, 2024, the old tax provisions will continue to apply, including the 15% tax rate on STCG covered under Section 111A, the 20% tax rate on LTCG covered under Section 112 with indexation benefit, and the 10% tax rate on LTCG under Section 112A. However, if the transfer occurs on or after 23rd July 2024, new tax provisions will apply. The ITR form requires a disclosure of the date of transfer, separate reporting for transfers made before and on or after 23rd July 2024, and the proper application of revised tax rates and indexation rules.”
If you have capital gains, then income from them will be reported in ITR 2, ITR 3 and ITR 5, as applicable.
6. Separate reporting for capital gains from unlisted bonds and debentures: Budget 2024 changed the taxation rules for unlisted bonds and debentures. The new rules are effective July 23, 2024.
Expert says, “According to the new rules, if unlisted debentures or bonds were issued on or before July 22, 2024, but redeemed, matured, or transferred on or after 23rd July 2024, the entire gain will be taxed as short-term capital gains, regardless of the holding period. As per the new rules, the gains will be taxed at the income tax slab rates applicable to your income. However, if the maturity, redemption or transfer occurs before July 23, 2024, the resulting gain will be classified as long-term and taxable according to the old provision. Under the old rules, the capital gains will be taxed at 20% with indexation benefit.”
The reporting of capital gains from unlisted bonds and debentures has to be done in ITR-2, ITR-3 or ITR-5, as applicable.
7. Reporting of buy-back proceeds as deemed dividends: From October 1, 2024, the amount received on the buy-back of shares by domestic listed companies will be considered as deemed dividends in the hands of shareholders. The new rule was announced in Budget 2024.
Expert says, “ITR-2, 3 and 5 have been amended so that shareholders can report the buy-back proceeds as dividend income under the section ‘Income from other sources’. Under the capital gains schedule, the taxpayers will be required to report zero as sale proceeds so that the cost of acquiring shares results in a capital loss. This capital loss can be brought forward and set off against other long-term capital gains for the next eight assessment years.”
8. Providing disability certificates for deduction under Section 80DD and 80U: Under the old tax regime, a taxpayer could claim a deduction under Section 80DD or Section 80U for expenditure made for disabled individuals. This year, a taxpayer claiming any of the deduction is required to provide acknowledgement number of the disability certificate as well.
Expert says, “Till previous years, a taxpayer could claim a deduction under Section 80DD or Section 80U by quoting the Form 10-IA as per income tax rules. However, from this year, taxpayer is also required to provide acknowledgement number of disability certificates along with Form 10-IA to claim deduction.”
Section 80DD can be claimed by a resident individual or HUF who incurs medical expenditure or pays an insurance premium for the care of a dependent family member with a disability or severe disability.
The deduction under Section 80U is available to a resident individual who is himself suffering from a disability or severe disability.
Expert says, “This reporting requirement is applicable only if ITR-2 and ITR-3 is filed. There is no reporting requirement if the taxpayer files ITR-1.”
9. Asset reporting applicable if total income exceeds Rs 1 crore: There is good news for taxpayers having income above Rs 50 lakh. From this year, a taxpayer is required to report their assets and liabilities only if the gross total income exceeds Rs 1 crore.
Expert says, “Earlier, a taxpayer was required to report their assets and liabilities if their gross total income exceeded Rs 50 lakh in a financial year. However, from this year, the reporting in Schedule AL will be mandatory only if gross total income exceeds Rs 1 crore.”
The reporting in Schedule AL can be done in the ITR 2 and ITR 3.
Filing your Income Tax Return (ITR) is more than a compliance task—it impacts your financial credibility, refund eligibility, and legal standing. Unfortunately, many taxpayers make avoidable errors while filing their returns, leading to defective filings, penalties, or missed benefits.
Below is a detailed guide to help you avoid the most common ITR filing mistakes.
1. Choosing the Wrong ITR Form
Each ITR form is designed for a specific category of taxpayers and types of income.
For example, ITR-1 is meant only for resident individuals with income from salary, one house property, LTCG from sale of listed shares u/s 112A upto 1.25 Lakhs and other sources, provided total income does not exceed ₹50 lakh and there are no other capital gains or foreign income. Filing ITR-1 when you actually have capital gains, foreign income, or are a director in a company would make your return invalid. The Income Tax Department may treat it as defective under Section 139(9), and you may be required to file a revised return using the correct form, delaying the process and possibly attracting scrutiny.
2. Incorrect Determination of Residential Status
Many individuals, especially NRIs and those frequently traveling abroad, often misclassify their residential status. This leads to incorrect reporting of global income. As per Section 6 of the Income Tax Act, factors like the number of days spent in India during the current and preceding years determine your residential status. A person might believe they are an NRI but may actually qualify as a resident, making global income taxable. Errors in this classification can result in significant tax implications and interest liability.
3. Outdated Personal Details
Failing to update your contact details such as email address, mobile number, or residential address in the income tax portal can lead to serious issues. Tax refunds may get delayed, and you may miss important notices or updates from the Income Tax Department. Additionally, if your bank KYC is outdated, refund credits can fail. Always ensure your personal details are current across both the Income Tax portal and linked bank accounts.
4. Missing the Filing Deadline
Many taxpayers either procrastinate or underestimate the importance of filing their ITR by the due date, which is generally 31st July for individual taxpayers not subject to audit. Filing late attracts a penalty under Section 234F, interest on tax dues under Sections 234A, 234B, and 234C, and the inability to carry forward certain losses like house property loss or capital loss. Delayed filing also raises the chance of scrutiny.
5. Claiming Fake or Unsupported Deductions
Claiming deductions without actual investments or proof, such as fake LIC receipts or forged rent agreements for HRA, may lead to scrutiny or penalty under anti-abuse provisions. The Income Tax Department may ask for documentation during assessment or scrutiny. If you fail to produce genuine proof, the deduction will be disallowed, and you may be penalized for misreporting income under Section 270A.
6. Not Opting for the Correct Tax Regime
From FY 2020–21 onwards, taxpayers can choose between the old regime (with deductions/exemptions) and the new regime (lower rates without exemptions). Taxpayers often make the mistake of choosing a regime without actually comparing the outcomes. If you opt for the new regime but have already made significant tax-saving investments, you may end up paying more tax than necessary.
7. Ignoring Form 26AS, AIS & TIS
Form 26AS, the Annual Information Statement (AIS), and the Taxpayer Information Summary (TIS) summarize your reported income, tax deducted at source (TDS), and other financial transactions. Mismatches between these and your ITR can trigger tax notices.
For example, if your Form 26AS shows an FD interest of ₹50,000 and you don’t report it, the department will raise a red flag. Always reconcile your returns with these documents before filing.
8. Not E-Verifying the ITR, Nor Send Hard copy of ITR V to IT department
Filing your ITR is incomplete without e-verification. If you do not verify your return within 30 days, it will be treated as not filed, even if you submitted it. This means you’ll have to redo the entire process, and if the deadline has passed, you may lose the opportunity to file altogether or incur a late filing fee. E-verification can be done quickly using Aadhaar OTP, Net Banking, or a Digital Signature Certificate (DSC). In case you are not able to E verify then send ITR V acknowledgment to Address given on it.
9. Mismatch of Turnover in GST and ITR
For business owners, discrepancies between turnover declared in GST returns (GSTR-1, GSTR-3B) and ITR can invite scrutiny. Suppose you show a turnover of ₹60 lakh in GST but only ₹40 lakh in ITR—the mismatch may prompt both income tax and GST authorities to initiate audits or send notices. Proper reconciliation between books, GST returns, and ITR is critical to avoid compliance issues.
10. Not Validating Bank Accounts
Income tax refunds are only processed to pre-validated bank accounts. If the account where you expect the refund is not validated on the e-filing portal, the refund will fail, and you’ll need to re-initiate the validation and refund process, leading to delays. Always check the status of your bank accounts under the “Profile” section on the portal before filing.
11. Not Reporting Losses Properly
Losses such as short-term capital loss, long-term capital loss, or house property loss must be reported accurately and within the due date to be eligible for carry forward. If you miss the deadline or fail to disclose them in the correct schedule, you lose the ability to offset them against future profits, resulting in higher tax outgo in subsequent years.
12. Non-Reporting of Crypto Transactions
Profits from trading in cryptocurrencies are taxed at a flat 30% under the new regime, with no deductions allowed other than the cost of acquisition. Since exchanges are now required to deduct TDS under Section 194S, the ITD tracks these transactions closely. Failing to report crypto gains or airdrops can lead to serious compliance issues and hefty penalties.
13. Ignoring Forms Like 10E, 10IE, 10-IEA
Certain claims, like relief for salary arrears or opting for the new tax regime, require filing specific forms—Form 10E and Form 10IE/10-IEA respectively. If you forget to file these forms, your relief claim or regime selection may be rejected even if correctly mentioned in your ITR, which can significantly increase your tax liability.
14. Non-Reporting of Interest Income
Interest from savings accounts, fixed deposits (FDs), and recurring deposits (RDs) is fully taxable, but many individuals forget to include this under “Income from Other Sources.” Banks report interest income to the ITD, and omission can result in mismatch notices. Always collect your annual interest summary from the bank or refer to Form 26AS and AIS before filing.
15. Choosing Pay Now Instead of Pay Later Option
When using the Income Tax portal for return filing, choosing the “Pay Now” option before calculating the final tax liability can lead to incorrect payments—either excess or shortfall. It is always advisable to finalize the ITR computation first, then pay self-assessment tax (if any) based on accurate figures, and finally submit the return.
16. Hiring Unqualified or Cheap Consultants
Filing through inexperienced agents, especially during tax season, may save money in the short term but can lead to costly errors like using the wrong ITR form or claiming ineligible deductions. Errors by unqualified preparers often result in tax notices, penalties, or blocked refunds. It is always safer to engage qualified professionals such as Chartered Accountants.
17. Ignoring Section 139 (6th & 7th Proviso)
Even if your income is below the taxable limit, you must file ITR if you meet certain financial thresholds—such as depositing over ₹1 crore in a bank account, spending over ₹2 lakh on foreign travel, or paying more than ₹1 lakh in electricity bills, Deposited 50 Lakh or more in Saving Bank account, you have Business Turnover more than 60 Lakh or Professional receipts more than 10 Lakh, TDS deducted is more Than Rs.25000 (Rs.50000 in case of senior citizens), Beneficiary or Signatory in foreign assets or bank accounts etc. Failing to file in these cases may be treated as non-compliance and can attract penalties.
18. Not Maintaining Books of Accounts
Freelancers, consultants, and small business owners are often unaware that they are required to maintain books of accounts under Rule 6F. This includes ledgers, cash books, invoices, and expense vouchers. Not maintaining proper records can lead to disallowance of expenses, estimation of income by the Assessing Officer, and higher tax liability.
19. Ignoring ITR Intimation (Section 143(1))
After processing your ITR, the Income Tax Department issues an intimation under Section 143(1), stating whether your return has been accepted as-is or adjusted. Many people ignore this, missing crucial updates like additional tax demand, refund amount mismatch, or disallowed deductions. Always download and review this document from your e-filing dashboard.
20. Not Reviewing Filed Return Carefully
Even when returns are prepared by professionals, you must review the ITR before submission. Mistakes in PAN, bank account numbers, income entries, or deduction claims can lead to refund failure or tax notices. Review the draft return PDF or XML file to ensure accuracy before final submission.
21. Not Maintaining Documentation
All documents used for ITR filing—such as Form 16, rent receipts, investment proofs, donation receipts, bank statements, and loan certificates—must be kept for at least 8 years. These may be required during assessments, refunds, or scrutiny. The ITR-V acknowledgment, in particular, is essential proof of filing.
22. Not Paying Advance Tax or Self-Assessment Tax
If your total tax liability (after TDS) exceeds ₹10,000, you are required to pay advance tax in four instalments. Failing to do so results in interest under Sections 234B and 234C. Many salaried individuals with additional income (like rent or interest) miss this, leading to interest penalties.
23. Not Linking PAN with Aadhaar
The Income Tax Department has made it mandatory to link PAN with Aadhaar. A PAN not linked becomes inoperative, and returns filed using it are considered invalid. Refunds will not be processed, and you cannot file new returns. Linking must be done on the e-filing portal before the prescribed deadline.
24. Not Reporting Income from Multiple Employers
If you switched jobs during the financial year, it’s important to report income from all employers. Failing to include income from your previous employer leads to under-reporting, higher tax liability, and possible notices. Combine all Form 16s while filing your return.
25. Not Checking All Bank Accounts
Refunds and other communications often depend on the correct bank details being provided. If you haven’t reviewed your list of bank accounts on the e-filing portal, and your primary account is not pre-validated, refunds may fail. Validate all active accounts and designate the correct one for refunds.
26. Not Reporting Exempt Income
Many taxpayers ignore exempt incomes such as interest from PPF, maturity of life insurance, or agricultural income. While these are not taxable, they must be disclosed in the ITR for transparency. Non-disclosure may raise red flags during processing or scrutiny.
27. Deemed to be Let-Out Property Not Shown
If you own more than one house, only two can be treated as self-occupied; the rest are deemed to be let out—even if not actually rented—and not showing them leads to incorrect income computation. Notional rent must be offered to tax on such properties.
28. Forgetting to Disclose Foreign Assets
If you are a resident and own foreign bank accounts, shares, or properties, these must be disclosed in your ITR. Non-disclosure, even unintentionally, can lead to penalties under the Black Money Act. This disclosure is mandatory even if the assets don’t generate income.
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.
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.
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.
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.
⚙️ Mechanism for Grievance Redressal
The CBIC has laid out the following steps:
1. Dedicated Email Address
Each CGST Zone must publicize an official email ID to receive GST registration grievances. This email must be made widely known through various communication channels.
2. Grievance Submission Format
Applicants should send emails including:
ARN details,
Jurisdiction (Centre/State),
A brief description of the issue.
3. Forwarding State Jurisdiction Grievances
If the grievance pertains to a State jurisdiction, the CGST office must:
Forward the grievance to the concerned State authority,
Endorse a copy to the GST Council Secretariat.
4. Timely Resolution
The concerned CGST Commissioner must:
Ensure prompt resolution,
Communicate the outcome to the applicant,
In cases where the officer’s queries are valid, advise the applicant accordingly.
5. Monthly Reporting
Each CGST Zone must submit a monthly report to the Directorate General of GST (DGGST), who will consolidate the data for review by the CBIC Board.
🏛️ Coordination with Other Authorities
The instruction also directs:
GST Council Secretariat to share this framework with all States/UTs for implementing a similar grievance redressal mechanism on their end.
Director General of Taxpayer Services (DGTS) to support publicity efforts.
🚨 Escalation of Issues
If there are any implementation difficulties, these should be brought directly to the notice of the Board for resolution.
✉️ Issued By
Gaurav Singh,
Commissioner (GST),
CBIC
📝 Conclusion
Instruction No. 04/2025-GST is a proactive measure to bridge the communication gap between GST applicants and authorities. By ensuring a clear, structured, and timely grievance redressal mechanism, the CBIC seeks to make GST registration more efficient and applicant-friendly.
This initiative reflects CBIC’s commitment to Ease of Doing Business and strengthens trust in the GST framework.
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)
In a major relief to investors, capital loss arising on share buyback post 01.10.2024 is now allowed only if:
The corresponding dividend income received during buyback is shown as ‘Income from Other Sources’.
This addresses the earlier ambiguity where buybacks were resulting in a deemed dividend and disallowed loss. The revised form now accommodates such reporting.
✅ Action Point: Ensure the dividend component is accurately declared in Schedule-OS to claim the capital loss.
🖋️ 3. Reference to Section 44BBC — Cruise Business
The ITR-5 now includes reporting provisions aligned with newly inserted Section 44BBC, which provides for presumptive taxation of income from cruise business. This is part of the government’s push to promote cruise tourism and simplify tax compliance for operators in this segment.
✅ Action Point: Businesses engaged in cruise operations must assess eligibility under section 44BBC and report accordingly.
🖋️ 4. TDS Section Code in Schedule-TDS
To enhance TDS transparency and traceability, the revised Schedule-TDS now mandates reporting the TDS section code (e.g., 194C, 194J, etc.) for each entry.
This will help cross-verification with Form 26AS and improve reconciliation accuracy during assessment.
✅ Action Point: Cross-check TDS entries with Form 26AS/TRACES to ensure correct section codes are captured.
📑 Where to View Full Notification & ITR Format
The complete text of Notification No. 42/2025 and the new ITR-5 form can be accessed on the official e-Gazette portal:
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.
New Delhi, The government has notified the Goods and Services Tax Appellate Tribunal (GSTAT) (Procedure) Rules which make it online filing of applications mandatory, provide for hybrid hearings and listing of cases on an urgent basis steps that will make the adjudication process simpler for businesses.
The notification states that the rules come into effect from April 24, 2025, and the GSTAT portal has already gone live.
The move marks a major step in streamlining tax litigation under the GST regime. Under the new rules, all appeals and applications must be filed digitally via the official GSTAT portal.
The framework, laid out in 15 chapters, covers procedures from the admission of appeals to hearings and final orders. The Tribunal will allow hybrid hearings — either in person or through video conferencing — as approved by the Tribunal President.
It has also set strict timelines and said that urgent appeals filed by noon can be listed on the next working day and late filings by 3 p.m. can also be listed with permission on the next working day.
Respondents will have to reply within one month and applicants can file a rejoinder also within one month. The tribunal will issue ordered within a period of 30 days from the date of the final hearing, excluding holidays.
The tribunal will sit on all working days from 10.30 a.m.-1.30 p.m. and 2.30 p.m.-4.30 p.m., with possible extensions while the office remain open from 9 a.m. to 6 p.m. on working days.
A daily cause list will be posted online and on notice boards, prioritising order pronouncements, clarifications, and admissions.
Experts are of the view that on online filings would reduce delays and help in faster resolution of tax disputes.
The GSTAT is the Appellate Authority under the GST Act to hear appeals on tax disputes against the orders passed by the Appellate or Revisional authorities. Its Principal Bench is based in New Delhi and has 31 State Benches located across the country, with sittings in 44 different locations
Question 1:
Solution:
Note: ITC will only reflect in the GSTR-2B of the concerned tax period in which the record is furnished again.
Key Compliance Alert
Effective Date of Restriction
Advisory Note Issued Earlier: GSTN had already issued an advisory regarding this change on October 29, 2024, to help taxpayers prepare in advance.
Conclusion
