Before March 31, 2025, ensure compliance with key GST requirements for FY 2025-26:

As the financial year 2024-25 is going to end and FY 2025-26 is going to begin, businesses must ensure compliance with GST regulations to avoid penalties and optimize tax benefits. Below is a detailed checklist covering important activities, deadlines, and compliance measures for a smooth transition into the new financial year.

Key Year-End Activities and Deadlines

1. New Invoice Series: Adopt a unique tax invoice series for FY 2025-26.
2. Letter of Undertaking (LUT) Renewal: Apply for LUT in Form GST RFD-11 for tax-free exports before March 31, 2025.
3. Composition Scheme Enrollment: File CMP-02 to opt for the Composition Scheme before March 31, 2025.
4. ITC-03 for Composition Transition: File ITC-03 by May 30, 2025, if shifting from regular to composition scheme.
5. QRMP Scheme Selection: Opt-in or opt-out of Quarterly Return Filing before April 30, 2025.
6. Annexure V & VI for GTA Taxpayers: Filing declaration for forward/reverse charge payment in GTA services before March 31, 2025.
7. Credit Notes Issuance Deadline: November 30, 2025, is the last date for issuing credit notes for FY 2024-25.
8. GST Refund for FY 2022-23: Claim pending refunds before March 31, 2025.
9. Tax Audit Clause 44 Preparation: Prepare the break-up of GST-registered & unregistered expenses for Form 3CD.
10. GST TDS/TCS Credit Matching: Reconcile GST TDS/TCS credits with books and e-Cash Ledger.
11. Reconcile E-Credit Ledger: Match electronic credit ledger balances with books.
12. Reconcile Electronic Credit reversal & Reclaimed Statement: Match balances with books.
13. Export Proceeds Verification: Ensure FIRC/BRC submission for GST-compliant export transactions.

Input Tax Credit (ITC) Reconciliation and Compliance

1. Yearly ITC Reconciliation: Match ITC booked in books with ITC claimed in GSTR-3B and reconcile it with GSTR-2B.
2. Ensure Timely Booking of Invoices: Any invoice reflecting in GSTR-2B but not recorded in books should be accounted for.
3. Supplier Compliance Check: Follow up with suppliers to ensure timely filing of GSTR-1 & GSTR-3B.
4. Ineligible ITC Reversal: Identify and reverse ineligible ITC (blocked credit, ITC on exempt supplies) and pay interest @24% if utilized wrongly.
5. Payments Pending Beyond 180 Days: Reverse ITC for unpaid supplier invoices exceeding 180 days and re-claim upon payment.
6. Composition Supplier Purchases: Ensure ITC is not claimed on purchases from composition dealers.
7. ITC for Exempt Supplies: Recalculate and reverse ITC under Rules 42 & 43.
8. Cancelled GSTIN Suppliers: Identify transactions with cancelled GSTIN suppliers and take corrective actions.
9. ITC on Reverse Charge Mechanism (RCM): Ensure RCM tax is paid on specified services like director fees, legal fees, rent-a-cab services, etc.
10. E-Invoicing Compliance: Ensure suppliers generate IRN for tax invoices if e-invoicing is applicable.

Outward Supply Reconciliation and Reporting

1. Turnover Reconciliation: Match turnover in GSTR-1, GSTR-3B, and books of accounts.
2. HSN Code and Tax Rate Verification: Ensure correct classification of goods/services and applicable tax rates.
3. Debit & Credit Notes Reconciliation: Match adjustments in books with GSTR-1 & GSTR-3B.
4. E-Way Bill & E-Invoice Matching: Cross-check invoices with e-way bills and e-invoices for accuracy.
5. Export Transactions Verification: Match shipping bills with GSTR-1 for timely refunds.
6. Advance Received GST Adjustment: Ensure proper adjustment of GST paid on advances.
7. Related Party Transactions: Verify valuation compliance under Section 15 and Rule 28.
8. Stock Verification: Perform physical stock audits and match records with books.

Reverse Charge Mechanism (RCM) Compliance

1. Identify RCM Liabilities: Ensure GST is paid on transactions like legal fees, GTA services, security services, etc.
2. Self-Invoices & Payment Vouchers: Generate required documents for RCM transactions.
3. Foreign Expenditure Reconciliation: Match imported service payments with GST filings.
4. Ensure Proper ITC Utilization: ITC availed on RCM transactions should not exceed tax paid under RCM.

GST Portal Updates & New Functionalities

1. E-Invoicing Enhancements:
   • PAN-based search for e-invoice eligibility.
   • Hourly auto-population of e-invoices in GSTR-1.
   • E-invoice download for past 6 months for both buyers and sellers.
2. E-Way Bill & E-Invoice Integration: Seamless generation of E-Way Bills with e-invoices.
3. New GST Payment Methods: Introduction of Credit Card, Debit Card & UPI for GST payments.
4. Mandatory Bank Account Submission: Failure to update bank details within 30 days may lead to GSTIN suspension.
5. Delays in GST Registration Processing: Aadhaar-authenticated applications flagged for risk-based verification will be processed within 30 days.

Adhering to these GST compliance activities for FY 2024-25 will ensure smooth operations and avoid penalties. Businesses should proactively reconcile ITC, validate outward supplies, meet RCM obligations, and adhere to reporting deadlines. Keeping up with GST portal updates and new regulations is crucial for hassle-free compliance. For any complex GST issues, consulting a tax professional is recommended.

E-Way Bill Portal Introduces Form ENR-03 convert in short form of words,Change in E way bill Rules.

Subject: Advisory on Introduction of Form ENR-03 for Enrolment of Unregistered Dealers/Persons in e-Way Bill Portal for Generating e-Way Bill

Feb 15th, 2025

Dear Stakeholders,

A new feature has been introduced in the E-Way Bill (EWB) system to facilitate the enrolment of unregistered dealers supplying goods, with effect from 11.02.2025. In accordance with Notification No. 12/2024 dated 10th July 2024, Form ENR-03 has been introduced for the enrolment of unregistered dealers.

2. Unregistered dealers engaged in the movement or transportation of goods can now generate e-Way Bills by enrolling themselves on the EWB portal and obtaining a unique Enrolment ID. This ID will serve as an alternative to the Supplier GSTIN or Recipient GSTIN for generating e-Way Bills.

User Guide for ENR-03 Enrolment

1. Accessing ENR-03:

• a) As per the notification, an Unregistered Person (URP) can enrol using Form ENR-03.
• b) The option is available under the “Registration” tab in the main menu of the EWB portal.

2. Filling Out the ENR-03 Form:

• a) Upon selecting the option, the enrolment screen will be displayed.
• b) The applicant must select their State and enter their PAN details, which will be verified.
• c) The type of enrolment must be selected, and address details must be provided.
• d) A mobile number must be entered, which will be verified via OTP.

3. Creating Login Credentials:

• a) The user must create a username, check its availability, and set a password before submitting the details.
• b) Upon successful submission, a 15-character Enrolment ID will be generated, and an acknowledgment will be displayed.
• c) This Enrolment ID can be used for generating e-Way Bills in place of a GSTIN.

4. Generating an e-Way Bill:

• a) The enrolled URP can log in to the EWB portal using the registered credentials.
• b) By selecting the ‘Generate New’ option, the Enrolment ID will be auto-populated as the Supplier/Recipient.
• c) Other relevant details must be entered before proceeding with e-Way Bill generation.

For further assistance or queries related to this update, taxpayers may contact the GST Helpdesk or refer to the detailed User Guide attached: User Manual for ENR-03

This advisory is issued for the information and compliance of all stakeholders.

Thank You,
Team GSTN

• Introduction of ENR-03: A new feature for unregistered dealers to enrol and generate e-Way Bills.
• Effective Date: Enrolment process available from 11.02.2025.
• Who Can Use It? Unregistered dealers transporting/moving goods.
• Purpose of Enrolment ID: Acts as an alternative to GSTIN for generating e-Way Bills.
• Simple Registration Process: Fill out Form ENR-03, verify PAN and mobile number, and create login credentials.
• e-Way Bill Generation: Enrolled users can log in and generate e-Way Bills seamlessly.
• Compliance Requirement: Adherence to the latest GST norms for smooth operations.

New GST Registration Rules (2025): Key Updates for Businesses

Advisory for GST Registration Process (Rule 8 of CGST Rules, 2017)
Feb 12th, 2025

Dear Taxpayer,

In line with recent developments in the GST registration process, applicants must adhere to the following steps as per Rule 8 of the CGST Rules, 2017:

1. Applicants Not Opting for Aadhaar Authentication:

• If you choose not to authenticate via Aadhaar, you must visit the designated GST Suvidha Kendra (GSK) for photo capturing and document verification.
• Upon selecting “NO” for Aadhaar authentication, an email will be sent with GSK details and required documents.
• You can schedule an appointment via a link in the email. An appointment confirmation will follow through mail.
• Visit the GSK at the scheduled time for photo capturing and document verification.

2. Applicants Opting for Aadhaar Authentication and Application Identified for Biometric Authentication:

• Promoters/Partners opting for Aadhaar authentication should first visit the GSK for biometric authentication and photo capturing, followed by the Primary Authorized Signatory (PAS).
• Promoters/Partners opting for Aadhaar authentication must visit the GSK for photo capturing and biometric authentication. The Primary Authorized Signatory (PAS) is required to carry the documents listed in the intimation email for verification at the GSK. Additionally, the PAS must undergo photo capturing and biometric authentication at the GSK as part of the process.
• If a Promoter/Partner has already been biometric verified in any State/UT during a previous registration, they will not need to visit the GSK again for photo capturing, biometric authentication, or document verification for any other entity where they act as Promoter/Partner. However, if she/he becomes the PAS of the entity, only document verification at the GSK will be required.
• In case PAS has already been biometric verified in any State/UT during a previous registration, she/he will need to visit the GSK only for document verification.
• If the Promoter/Partner and PAS are the same individual, she/he must visit the GSK for photo capturing, biometric authentication, and document verification. If already biometric verified in the past, only document verification at the GSK is required.

3. Non-Generation of Application Reference Number (ARN):

• For applicants opting for Aadhaar authentication and application identified for Biometric Authentication: If any of the Promoter/Partner or PAS fails to visit the GSK, or biometric authentication fails, or document verification is not completed within 15 days of submitting Part B of REG-01, the ARN will not be generated. Ensure that your Aadhaar details (name, date of birth, gender) are accurate to avoid authentication failures. If any discrepancies occur, update Aadhaar and visit the GSK within 15 days.
• For non-Aadhaar applicants: If photo capturing or document verification is not completed within 15 days, the ARN will not be generated.

Taxpayers are urged to follow this advisory to ensure smooth processing of their GST registration applications.

Understanding the Importance of Biometric Authentication in GST Registration

The GST registration process is evolving to strengthen compliance and prevent fraudulent registrations. The introduction of mandatory biometric authentication for certain applicants serves multiple purposes:

• Prevention of Fake Registrations: Ensuring that only genuine businesses obtain GST registration by verifying the identity of Promoters/Partners and PAS.
• Streamlining the Verification Process: Aadhaar-based authentication allows faster verification, reducing delays in approval.
• Enhancing Security Measures: Eliminating the risk of identity fraud and bogus business registrations.

How to Prepare for a Smooth GST Registration Process

To ensure that your GST registration is processed without any delays, follow these best practices:

• Ensure Aadhaar Details are Updated: Incorrect Aadhaar details can lead to authentication failure. Verify your Aadhaar details before initiating the registration process.
• Schedule GSK Appointments Promptly: Delays in visiting the designated GST Suvidha Kendra can result in non-generation of ARN.
• Carry All Required Documents: Ensure that all necessary documents listed in the intimation email are carried for verification at the GSK.
• Monitor Email Communications: Regularly check your email for updates regarding the verification process and respond accordingly.

Impact of New Registration Process on Businesses

While these procedural changes may seem stringent, they offer long-term benefits by making GST registration more secure and transparent. Businesses can expect:

• Faster Processing of GST Applications: Once biometric authentication is complete, registrations are expected to be processed more efficiently.
• Reduced Risk of Tax Fraud: Strengthened verification measures help prevent fraudulent claims and misuse of GST registrations.
• Compliance Alignment with Government Policies: Ensuring businesses are properly registered and comply with the necessary legal requirements.

Conclusion

The enhanced GST registration process under Rule 8 of the CGST Rules, 2017, aims to streamline tax compliance and prevent misuse of GST provisions. Taxpayers must familiarize themselves with these requirements and ensure that they adhere to the updated procedures. By following the guidelines, businesses can avoid unnecessary delays and ensure smooth registration under the GST framework.

For any clarifications or assistance, taxpayers can reach out to the GSTN helpdesk or visit their nearest GST Suvidha Kendra.

**No Tax on ₹20 Lakh Rent in Budget 2025 – Here’s How!**

Budget 2025 has introduced significant changes in the new tax regime, making rental income more tax-efficient than ever. With the increased tax-free limit of ₹12 lakh, higher TDS thresholds, and deductions available under Section 24(b), individuals earning rental income can pay zero tax on annual earnings of up to ₹20 lakh.

New Tax Regime (Budget 2025) – Latest Slabs

The new tax regime (Section 115BAC) has been modified in Budget 2025. Below are the latest slab rates:

🔹 Maximum rebate available: ₹60,000 (Applicable for income up to ₹12 lakh).
🔹 No rebate under Section 87A on special rate income like capital gains, lottery, betting, etc.

Tax Deductions on Rental Income Under Section 24(b)

1️⃣ Standard Deduction (30%) – Available for all rental income.
2️⃣ Home Loan Interest Deduction (without any limit) – Available for let-out properties, under New Regime

Example 1: Rental Income ₹20 Lakh with Home Loan

✅ No tax payable because taxable income is below ₹12 lakh!

Important Restrictions Under Section 115BAC(2) (New Tax Regime)

Under the new tax regime, certain deductions and set-offs are not allowed, including:

✅ No deduction for loss from house property against other income.
✅ No additional exemptions like HRA, Deductions under Chapter VIA

👉 Example: If your taxable income from salary is ₹10 lakh and rental income has a loss of ₹1 lakh (after deductions), you CANNOT set off this ₹1 lakh loss against salary under the new tax regime.

However, the standard deduction (30%) on rental income and home loan interest (without any limit) are still available.

Other Tax Benefits on Rental Income in Budget 2025

🔹 TDS on Rent Threshold Increased:
✔ Section 194I (TDS on Rent): Limit increased from ₹2,40,000/year to ₹50,000/month.
✔ This brings Section 194I in line with Section 194IB.

🔹 Higher TDS Exemption for Senior Citizens:
✔ Section 194A (TDS on Interest Income for Senior Citizens): Limit increased from ₹50,000 to ₹1,00,000.

FM Sitharaman :GST Council to soon take decision on rates, number of slabs

The GST Council will soon take a decision on having fewer and lower rates as the review work is almost complete, Finance Minister Nirmala Sitharaman said on Tuesday. Currently, Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab.

The Council, chaired by Sitharaman and comprising her state counterparts, has set up a group of ministers (GoM) to suggest changes in GST rates as well as reduce slabs.

“To be fair to the GST and the ministers who are all in the council, the work on rationalizing and simplifying GST rates has already commenced. In fact, it had commenced nearly three years ago,” she said at the India Today-Business Today Post Budget Round Table.

Sitharaman said later the scope was widened and now the work is almost complete.

Mentioning that she told ministers in the Council to have a more in-depth look at the rates since they relate to everyday items consumed by common people, the minister said it was important to ensure that an opportunity was not lost.

“For me, it was also important that we don’t lose an opportunity, that we can even bring down the number of rates, which is also the original intent that we wanted fewer rates and lower rates. So work has got to happen on that, and I hope the GST Council will decide on it soon,” Sitharaman said.

Days after presenting the Union Budget 2025-26 that also provides significant income tax relief to the middle class, the minister asserted the country’s economic fundamentals are strong and there is no structural slowdown.

Tax relief in the Budget is a reflection of the prime minister’s commitment to the taxpayers, Sitharaman said and refuted speculations that the move was aimed at Delhi assembly elections.

She also told the gathering that there is no proposal to “shut down” the old tax regime.

“GSTN removes E-Way Bill requirement for select goods.”

Clarification on E-Way Bill Requirement for Goods under Chapter 71

Rule 138(14) of the Central Goods and Services Tax (CGST) Rules, 2017, read with its Annexure S.Nos. 4 and 5, states that goods covered under Chapter 71 viz., Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal, Jewellery, goldsmiths’, and silversmiths’ articles, except those classified under HSN 7117 (Imitation Jewellery), are exempt from the mandatory requirement of generating an E-Way Bill.

Pursuant to the introduction of the E-Way Bill (EWB) for goods classified under Chapter 71, excluding HSN 7117 (Imitation Jewellery), in the state of Kerala for intra-state movement, the National Informatics Centre (NIC) has provided an option to generate EWBs for goods covered under Chapter 71 except 7117 under the category “EWB for Gold” on the EWB portal.

It has been observed that various industry stakeholders have voluntarily been generating EWBs for goods under Chapter 71 due to the availability of this option in the EWB system. In this regard, it is clarified that while the system previously allowed EWB generation for goods under Chapter 71, this facility has now been withdrawn.

Accordingly, taxpayers and transporters engaged in the movement of goods under Chapter 71 (except HSN 7117) are advised that EWB generation is not required. However, it may be noted that for the intrastate movement of such goods within the state of Kerala, the generation of an EWB has been mandated vide Notification No.10/24-State Tax dated 27/12/24 issued by the state of Kerala. An advisory dated 27.01.2025 has already been issued in this regard.

Industry stakeholders are requested to take note of this clarification and ensure compliance with the applicable regulatory provisions.

Highlights of the Advisory on E-Way Bill for Chapter 71 Goods

Impact of This Advisory

1. Relief for Businesses Nationwide – No need to generate EWB for Chapter 71 goods, reducing compliance burden.
2. Exception for Kerala – Businesses in Kerala must comply with local requirements and generate EWB for intra-state movement.
3. Prevention of Unnecessary Compliance – The system no longer allows voluntary EWB generation for these goods, preventing confusion.

Conclusion: Businesses dealing with jewellery, precious stones, and metals should ensure compliance with this update. EWB is not required for these goods except in Kerala, where state-specific rules apply. Stakeholders must take note of the changes and follow the correct procedures to avoid any penalties or non-compliance issues.

“₹12 lakh tax-free: Middle class cheers Budget boost”

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Retro GST input tax credit change to hit commercial real estate.

The government’s proposal to amend the Finance Bill 2025 with respect to input tax credit (ITC) on construction expenses for leased properties is expected to impact real estate developers of commercial properties.

The Supreme Court ruling of October 2024 allowed ITC on such leased properties, providing financial relief to property developers by lowering their cost of commercial leasing. Following the ruling, tax authorities reassessed cases, leading to the issuance and withdrawal of multiple tax demands.

GST collections for January stand at 1.95 lakh crore, highest since April 2024

India’s Goods and Services Tax (GST) Revenue for January 2025 stood at Rs. 1,95,506 crores, marking a 12.3% increase from Rs. 1,74,106 crores in January 2024, as indicated by the country’s gross and net GST collections data. This number marks the country’s highest GST revenue, since April 2024.

In December 2024, the nation’s total GST earnings stood at Rs. 1,76,857 crores.

GST collections for the month of December grew 7.3 per cent year-on-year at Rs 1.77 Lakh Crore witnessing a dip compared to Rs 1.82 Lakh Crore in November 2024. Maharashtra recorded the highest GST collections among all states, registering Rs 29,260 crore, a 9 per cent year-on-year increase compared to December 2023.

Commenting on the GST collections, Abhishek Jain, Indirect Tax Head & Partner, KPMG says, “GST collections in January 2025 have shown an impressive growth of 12.5 percent year on year. This consistent increase could indicate an uptick in economic growth and sustained tax compliance by businesses. Notably, the growth in collections despite higher refunds is commendable, suggesting improved efficiency in refund processing by the department—an encouraging step toward enhancing ease of doing business.”

Domestic Revenue

India’s gross domestic revenue was recorded to Rs. 1,47,124 crore, marking a 10% increase from Rs. 1,33,705 crore in January 2024.

Revenue from Imports

The gross import revenue stood at Rs. 48,382 crores, showing a 19.8% increase from 40,401crore in January 2024. The IGST collections alone amounted to Rs. 47,453 crores, highlighting an increase in trader activities. The amount of cess collected on imports also grew to Rs. 929 crores, from Rs. 803 crores in January 2024.

Net Revenue Collections

After accounting for refunds, the Net GST Revenue for January 2025 stood at Rs. 1,71,653 crore, marking a 10.9% increase from Rs. 1,54,851 in January 2024.

The Net GST Revenue in December 2024 stood at Rs. 1,54,366 crore, highlighting a substantial increase in revenue.

Regional Growth Variations

The state wise GST collections for the month of January were led by Maharashtra at Rs. 32,335 crore, followed by Gujarat at Rs. 12,135 crore, Karnataka at Rs. 14,353 crore, Tamil Nadu at Rs. 11,496 crore and Haryana at Rs. 10,284 crore.

Clarificatory Circular 46/03/2025 Issued by GSTN Regarding Late Fees on GSTR-9C

GST Circular No. 46/03/2025-GST, Dated 30 January 2025

Clarification on Applicability of Late Fee for Delay in Furnishing FORM GSTR-9C

Background

Representations have been received seeking clarification on the levy of late fees for the delayed filing of the reconciliation statement in FORM GSTR-9C. Specifically, it has been requested to clarify whether late fees under Section 47 of the CGST Act, 2017 will be applicable when FORM GSTR-9C is not furnished along with the annual return in FORM GSTR-9, but is filed subsequently after the due date.

To ensure uniform implementation across all field formations, the Board, exercising its powers under Section 168(1) of the CGST Act, provides the following clarifications.

Statutory Provisions Governing GSTR-9C Filing

Mandatory Filing of GSTR-9C with GSTR-9

Understanding the Relationship Between GSTR-9 and GSTR-9C

Both before and after the amendment, the law mandates that registered persons required to file FORM GSTR-9 for a financial year must also furnish a duly certified or self-certified reconciliation statement in FORM GSTR-9C, where applicable.

If FORM GSTR-9C is required but not furnished, the annual return filing is considered incomplete under Section 44 of the CGST Act.

Applicability of Late Fees under Section 47

Sub-section (2) of Section 47 of the CGST Act prescribes a late fee for failure to furnish the annual return under Section 44 by the due date.

• If GSTR-9C is mandatorybut not furnished, the annual return remains incomplete, and late fees continue to accrue.
• Late fees apply from the due date of filing GSTR-9 until both GSTR-9 and GSTR-9C are furnished.

Late Fee Calculation Based on Filing Status

Late Fee Waiver for Delayed Filing up to FY 2022-23

As per Notification No. 08/2025-Central Tax, dated 23.01.2025, the late fee has been waived for any delay in filing GSTR-9C for financial years up to 2022-23, provided the reconciliation statement is furnished on or before March 31, 2025.

Waiver Conditions

🚫 No refund will be provided for any late fee already paid for delayed GSTR-9C filing in past years.