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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.

⚙️ 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.

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)

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:

📌 Who Should File ITR-5?

This return form is applicable to:

  • Firms (excluding LLPs opting for ITR-3)
  • Association of Persons (AOP)
  • Body of Individuals (BOI)
  • Artificial Juridical Person (AJP)
  • Estate of deceased/ insolvent
  • Business trusts and investment funds
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.

 

The Centre issues revised guidelines for the GST Appellate Tribunal.

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

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New Tax Rule: No Deductions for Compromise with Regulators

No tax deduction can be claimed for settling legal proceedings under four laws including Securities and Exchange Board of India Act, 1992; the Securities Contracts (Regulation) Act, 1956; the Depositories Act, 1996; and the Competition Act, 2002. The central board of direct taxes(CBDT) in a notification issued April 23 clarified that from April 1, no such deduction can be claimed.

Last year, the Centre had made amendments in the Finance Act, 2024 under Section 37 of the act.

Experts  said, “The deductibility of settlement payments under Section 37(1) of the Income-tax Act, 1961, has long been a subject of judicial debate, particularly in cases like Income Tax Officer v. Reliance Share & Stock Brokers, where consent fees paid to Sebi were allowed as business expenditure on grounds of commercial expediency.”

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New IT Bill Grants Authorities Access to Social Media and Digital Communications

The income tax department may be able to legally access people’s social media accounts, personal emails, bank accounts, online investment accounts, trading accounts, and more if they suspect tax evasion

This is apart from the other conferred powers such as the powers to break open the lock of any door, box, locker, safe, almirah, or other receptacle for exercising the powers conferred by clause” and “to enter and search any building, place, etc., where the keys thereof or the access to such building, place, etc., is not available.”
This is because Clause 247 of the new income tax bill gives tax authorities the power to “gain access by overriding the access code to any said computer system, or virtual digital space, where the access code thereof is not available.”

 

This is apart from the other conferred powers such as the powers to break open the lock of any door, box, locker, safe, almirah, or other receptacle for exercising the powers conferred by clause” and “to enter and search any building, place, etc., where the keys thereof or the access to such building, place, etc., is not available.”

The bill explicitly defines “virtual digital space” as follows:

(i) email servers

(ii) social media account

(iii) online investment account, trading account, banking account, etc

(iv) any website used for storing details of ownership of any asset

(v) remote server or cloud servers

(vi) digital application platforms

(vii) any other space of similar nature

Which officers are authorised to do this?

The bill defines the term “authorised officer” as follows:

(i) the Joint Director or the Additional Director

(ii) the Joint Commissioner or the Additional Commissioner

(iii) the Assistant Director or the Deputy Director

(iv) the Assistant Commissioner or the Deputy Commissioner

(v) the Income-tax Officer or the Tax Recovery Officer

Privacy violation concerns

Experts said, “The proposed provision allowing tax officers to access private social media and email accounts raises significant concerns under the fundamental right to privacy, as upheld in the landmark Puttaswamy judgment by the Supreme Court.”

“Additionally, such an unchecked mechanism could raise questions under Article 19(1)(a), impacting the freedom of speech and expression, particularly if individuals fear surveillance on their private conversations,” he said.

“In an era where digital rights are closely tied to fundamental freedoms, the government must ensure that taxation enforcement does not come at the cost of constitutional safeguards,” he added.

Meanwhile, Sohail Hasan, advocate, the Delhi high court called the bill, “groundbreaking and highly controversial.”

“Under the guise of tax enforcement, this bill hands authorities shockingly unchecked power to pry into private virtual assets, rummage through emails, and infiltrate social media accounts—all under loosely defined ‘specific circumstances.’ Critics warn that this marks an unprecedented intrusion, a dystopian overreach that could redefine personal privacy as we know it, all in the name of cracking down on tax evasion,” he added.

Experts said that “the broad powers could lead to intrusive actions, including political profiling or misinterpretations—such as associating exotic foreign travel or gifts with disproportionate income levels.”

“There is also a chilling effect on free expression, as taxpayers may hesitate to freely post on social media, fearing their content could be used against them in tax investigations,” she added.

Constitutional violation concerns

Experts said, “The proposed income tax bill provision allowing access to social media and emails raises serious privacy and constitutional concerns.”

“It threatens to erode personal autonomy under Article 21 and freedom of expression under Article 19(1)(a),” he said. “The broad and ambiguous criteria for such access circumvent safeguards established by the Supreme Court in various cases including People’s Union for Civil Liberties (PUCL) v. Union of India, which mandates a legally established procedure for communication interception.”

He further added that “robust safeguards, including judicial oversight, are essential to prevent abuse and uphold democratic principles” and that “in the absence of judicial oversight or specific procedural safeguards, this provision risks becoming a tool for arbitrary scrutiny rather than a structured tax enforcement mechanism.”

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Net direct tax collections grow by 13.57% year-on-year in FY25.

India’s direct tax collections, in gross terms, have witnessed a robust growth of 15.59 per cent year-on-year, reaching Rs 27.02 lakh crore in the financial year 2024-25, data released by the Central Board of Direct Taxes (CBDT) showed. In 2023-24, it was Rs 23.38 lakh crore.

This rise in collections is attributed to higher corporate and non-corporate tax revenues, as well as a significant surge in securities transaction tax (STT) receipts.

Corporate tax collections rose to Rs 12.72 lakh crore, up from Rs 11.31 lakh crore in the previous fiscal.

The Non-corporate tax collections surged to Rs 13.73 crore from Rs 11.68 lakh crore last fiscal year.

Securities transaction tax (STT) collections witnessed a sharp increase, reaching Rs 53,296 crore, compared to Rs 34,192 crore in the previous year.

Direct taxes are the taxes that individuals and businesses pay directly to the government. They include income tax, Corporate Tax, and Securities transaction tax.

Other taxes, including wealth tax, saw a decline from Rs 4,068 crore to Rs 3,366 crore.

After accounting for refunds, which also saw a significant jump of 26.04 percent to Rs 4.76 lakh crore, the net direct tax collection stood at Rs 22.26 lakh crore in 2024-25, reflecting a 13.57 percent increase compared to Rs 19.60 lakh crore in the same period last year.

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CBIC to issue GST registration within 7 days; ‘risky’ businesses may take up to 30 days.
New Delhi, April 18 (IANS) The Central Board of Indirect Taxes (CBIC) has issued revised instructions to the officers for processing GST registration applications, that will reduce compliance burden on taxpayers and facilitate rule-based transparency, it was announced on Friday.New Delhi, Businesses will be able to get GST registration within 7 days, while applications flagged as risky will be processed within 30 days after physical verification of the premises. Observing that some field officers are seeking various “unwarranted documents” by raising “presumptive queries”, the CBIC gave an “indicative list” of the documents which officers can seek online from businesses. “While processing registration application, query should not be raised by the officer seeking original physical copy of these documents,” said the CBIC’s revised instruction for granting GST registration.

The Central Board of Indirect Taxes and Customs (CBIC) said it has received complaints regarding difficulties being faced in getting a GST registration, mainly on account of nature of clarifications being sought by the officers and seeking of additional documents, which are not prescribed by the Board

In cases where premises are rented, the applicant is required to upload the valid Rent/Lease agreement along with any one of the documents relating to PPOB.

With regard to documents related to ‘constitution of business’, the CBIC said where the applicant is one of the partners, Partnership Deed for the proof of constitution of business is required to be uploaded by the applicant.

No additional document like Udhyam certificate, MSME certificate, shop establishment certificate, trade license etc. should be sought from the applicant, it added.

The CBIC said some of the common queries that are being raised by the field officers currently and are causing hardship for taxpayers include residential address of the applicant/Managing Director/Authorized Signatory is not in the same city or the state where the registration has been sought; activities mentioned in the registration application can not be conducted from the particular premises etc.

“Officers handling registration applications should not ask any presumptive query which is not related to the documents or information submitted by the applicant,” the CBIC said.

The CBIC also asked the field officers to carefully examine and check completeness of the registration application, and cross verify the authenticity of the documents furnished as proof of address from the publicly available sources, such as websites of the concerned authorities such as land registry, electricity distribution companies, municipalities, and local bodies, etc

“Where applications have not been flagged as risky on the common portal based on data analysis and risk parameters, and the same are found to be complete and without any deficiency, the officers should approve the application within 07 working days of submission of application,” it said.

Registration shall be granted within 30 days of submission of application after physical verification of the place of business in case where the applicant has undergone authentication of Aadhaar number and is flagged as risky on the common portal based on the data analysis and risk parameters; or fails to undergo authentication of Aadhaar number; or the officer deems it fit to carry out physical verification of place of business.

Experts said this instruction eliminates discretionary practices, reduce registration delays, eliminate avoidable rejections, and ensure fair treatment of applicants-particularly for businesses operating from shared or rented premises, startups, and proprietorships.

“By explicitly disallowing officers from demanding documents beyond the prescribed list or raising presumptive and irrelevant queries, the instruction curbs administrative overreach. The inclusion of clear timelines for approval, a structured framework for physical verification, and the acceptance of alternative documents like consent letters and utility bills are among the key reforms that will directly benefit taxpayers,” Expert added.

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