GST Changes Effective From 1 October 2025

New GST Rate changes of Various Goods and services are already made effective from 22 September 2025, for which below notifications are issued:

Now from 1st October 2025 below more changes are going to be applicable:

The Finance Act, 2025 introduced several amendments in the GST law. The Government has notified that certain sections will be brought into effect from 1 October 2025 through Notification No. 16/2025–Central Tax dated 17 September 2025. Along with this, GSTN has rolled out some major changes in the return filing system and compliance framework.

Activation of Finance Act, 2025 Provisions

From 1 October 2025, the following provisions of the Finance Act, 2025 will come into force:

New Provisions of FA 2025

• FA Sec. 121 (ii): This section amends Section 2(69) of the CGST Act, which defines “local authority.” The practical effect is to align the definition with the constitutional usage, which helps avoid any overlap or misinterpretation.
• FA Sec. 121 (iii): This provision introduces a new definition, Section 2(116A), for “Unique Identification Marking.” This new legal basis is crucial for the upcoming “track & trace” regime for goods.
• FA Sec. 122 & 123: These sections completely omit Section 12(4) and Section 13(4), which previously governed the time of supply for vouchers. This means that the supply of vouchers is now subject to the general time-of-supply rules, simplifying compliance and aligning with global GST practices.
• FA Sec. 124: This amendment retrospectively changes the wording in Section 17(5)(d) from “plant or machinery” to “plant and machinery.” The purpose of this change is to retroactively nullify the Supreme Court’s order in the Safari Retreat Case, clarifying the scope of what is covered.
• FA Sec. 126: Amendments to Section 34 aim to streamline reporting by introducing changes to the provisions for credit and debit notes. These changes are linked to the new GSTR formats.
• FA Sec. 127: A new framework is established under Section 38 for the communication of inward supplies, giving legal recognition to auto-drafted statements like GSTR-2B.
• FA Sec. 128: Changes to the monthly return filing under Section 39 (GSTR-3B) will enable stronger invoice-matching and error correction processes.
• FA Sec. 129 & 130: Amendment in section 107 & 112 for 10% pre deposit amount requirement
• FA Sec. 131: After section 122A of the Central Goods and Services Tax Act, the following section shall be inserted, namely:—
• “122B. Penalty for failure to comply with track and trace mechanism.—Notwithstanding anything contained in this Act, where any person referred to in clause (b) of sub-section (1) of section 148A acts in contravention of the provisions of the said section, he shall, in addition to any penalty under Chapter XV or the provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees or ten per cent. of the tax payable on such goods, whichever is higher.”.
• FA Sec.132: Insertion of new section 148A.
  132. After section 148 of the Central Goods and Services Tax Act, the following section shall be inserted, namely:—
  “148A. Track and trace mechanism for certain goods.—(1) The Government may, on the recommendations of the Council, by notification, specify,—
  (a) the goods;
  (b) persons or class of persons who are in possession or deal with such goods,
  to which the provisions of this section shall apply.
  (2) The Government may, in respect of the goods referred to in clause (a) of sub-section (1),—
  (a) provide a system for enabling affixation of unique identification marking and for electronic storage and access of information contained therein, through such persons, as may be prescribed; and
  (b) prescribe the unique identification marking for such goods, including the information to be recorded therein.
  (3) The persons referred to in sub-section (1), shall,—
  (a) affix on the said goods or packages thereof, a unique identification marking, containing such information and in such manner;
  (b) furnish such information and details within such time and maintain such records or documents, in such form and manner;
  (c) furnish details of the machinery installed in the place of business of manufacture of such goods, including the identification, capacity, duration of operation and such other details or information, within such time and in such form and manner;
  (d) pay such amount in relation to the system referred to in sub-section (2),
  as may be prescribed.”.
• FA Sec. 133 & 134: These sections clarify the refund framework by restricting refunds on warehoused goods in Special Economic Zones (SEZ) and Free Trade Warehousing Zones (FTWZ). This change is intended to tighten compliance and prevent fraudulent refund claims.

Invoice-wise Reporting in GSTR-7 (TDS Return)

• GSTR-7 has been amended to allow invoice-wise reporting.
• Starting from the September 2025 return (due on 10 October 2025), deductors must furnish invoice-wise TDS details.
• This ensures better transparency and easier reconciliation for suppliers and tax authorities.

Action Point: Deductors must collect invoice-wise details and update their systems accordingly.

Three-Year Time Bar on GST Return Filing

• Returns under Sections 37, 39, 44, and 52 of the CGST Act cannot be filed after three years from their due date.
• From October 2025 onwards, the GST portal will block filing of such returns.

Example:

• GSTR-1 or GSTR-3B of September 2022 will become time-barred in October 2025.
• Annual returns (GSTR-9/9C) for FY 2020-21 will also be time-barred.

Action Point: File all pending returns immediately before the three-year limit expires.

Changes in Invoice Management System (IMS)

GSTN has simplified IMS with effect from October 2025 tax period. Key features include:

• Records can be kept “pending” for one period in case of amendments or corrections.
• Taxpayers can declare partial ITC reversal instead of full reversal.
• Option to save remarks for rejected or pending records, visible to both supplier and recipient.
• Applicable only for records filed after rollout.

Impact: This will reduce reconciliation disputes and improve clarity in ITC claims.

Other Changes:

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