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.

Important GST Rate Updates for Hotel-Based Restaurant and Outdoor Catering Services Effective from 1 April 2025

Effective from April 1, 2025

📜 Notification No. 05/2025-Central Tax (Rate) & 08/2025-Central Tax (Rate) dated January 16, 2025

Key Changes and Impact

1. Omission of “Declared Tariff”

The definition of “declared tariff” has been omitted.

2. Revised Definition of “Specified Premises”

The definition has been updated to provide more clarity and flexibility for hotel operators.

3. Classification of “Specified Premises”

4. GST on Restaurant Services Provided Through E-Commerce Operators (ECOs)

As per Notification No. 17/2017-Central Tax Rate dated June 28, 2017, Electronic Commerce Operators (ECOs) are required to pay GST on restaurant services provided through their platforms. However, this rule does not apply when supplied by restaurants, eating joints, or similar establishments located at “specified premises.”

🔹 Changes in Definition of Specified Premises for E-Commerce Operators
📌 Explanation (c) of the notification has been amended to align with the new definition of “specified premises” as stated above.

📢 Key Takeaway:
These changes ensure better clarity in tax applicability for hotel and restaurant services while allowing businesses to choose tax structures that best suit their operations.

CBIC clarifies: Penal charges imposed by banks are not subject to GST:

Goods and Services Tax (GST) will not be applicable on penal charges levied by banks and non-banking finance companies (NBFCs), the CBIC has said. The Central Board of Indirect Taxes and Customs (CBIC) through a circular has also clarified that GST will not be levied on transactions of up to Rs 2,000 facilitated by payment aggregators on online platforms.

Clarifying the issue of GST applicability on penal charges levied by banks and NBFCs, the CBIC said penal charges levied by Regulated Entities governed by the RBI are essentially in the nature of charges for breach of terms of contract and hence, do not attract GST.

“As recommended by the 55th GST Council, it is hereby clarified that no GST is payable on the penal charges levied by Regulated Entities… for non-compliance with material terms and conditions of loan contract by the borrower,” the CBIC said.

Experts said this clarification is significant as it settles interpretational disputes at the field level.

“By reiterating the essence of contractual obligations’ that contracts are meant for performance and not breach’ the GST Council has eliminated ambiguity regarding the taxability of such charges. The exclusion of penal charges from the GST ambit ensures compliance with RBI directives and prevents undue financial burdens on regulated entities and borrowers,” He added.

With regard to taxation on payment aggregators, the CBIC said it has received representations seeking clarity on the applicability of GST exemption to Payment Aggregators (PAs) in relation to settlement of up to Rs 2,000 in a single transaction, transacted through credit card, debit card, charge card or other payment card services.

Payment Aggregators (PAs) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from their customers without the need for the e-commerce sites and merchants to create a separate payment integration system of their own. In the process, PAs receive payments from customers, pool and transfer them on to the merchants within a specified time period.

The CBIC also quoted RBI guidelines which distinguish PAs and Payment Gateways, which provide technology infrastructure to route and facilitate processing of an online payment transaction without any involvement in handling of funds.

“It is hereby clarified that GST exemption … is available to RBI regulated Payment Aggregators (PAs) in relation to settlement of an amount, up to Rs 2,000 in a single transaction, transacted through credit card, debit card, charge card or other payment card services, as PAs fall within the definition of ‘acquiring bank’,” the CBIC said.

The CBIC also clarified that this GST exemption is limited to payment settlement function only, which involves handling of money, and does not cover Payment Gateway services.

Expert said the clarifications issued by the CBIC on interpretative issues demonstrate the Government’s commitment to foster a predictable tax environment for businesses. This approach is likely to lead to greater tax certainty and a more conducive business environment.

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