India’s Goods and Services Tax (GST) regime will undergo significant compliance updates in 2025, introducing stricter measures to enhance digital security, streamline processes, and improve transparency. These updates include mandatory multi-factor authentication (MFA) for GST portal access, tighter restrictions on E-Way Bill (EWB) generation, and capped extension periods for EWBs.
Starting January 1, 2025, MFA will be phased in for all taxpayers. Initially applicable to businesses with an Annual Aggregate Turnover (AATO) exceeding Rs 200 million, it will extend to those with turnover above Rs 50 million from February 1 and become mandatory for all taxpayers from April 1. Businesses are urged to update registered mobile numbers, ensure IT system compatibility, and train employees on MFA procedures to ease the transition.
Restrictions on EWB generation
Restrictions on EWB generation will also take effect on January 1, limiting the use of base documents to those not older than 180 days. This measure is designed to prevent fraudulent practices such as backdated invoices and ensure timely and legitimate goods movement. Additionally, the extension period for EWBs will be capped at 360 days from the original generation date, promoting efficient logistics and reducing indefinite transit delays.
An EWB is a mandatory digital document for transporting goods valued at Rs 50,000 or more, generated through the GST or EWB portal. Non-compliance can result in penalties, vehicle seizures, and logistics disruptions. Businesses are encouraged to streamline invoicing and logistics processes, automate reminders for EWB deadlines, and align supply chain planning to meet the new requirements.
These updates aim to strengthen India’s GST ecosystem by reducing fake billing, improving tax collection, and fostering a fairer business environment. While the compliance adjustments may pose initial challenges, they promise long-term benefits such as enhanced operational efficiency and increased transparency. Early preparation and proactive measures will be crucial for businesses to adapt smoothly and maintain seamless operations in the evolving GST regime.
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