New GST rules in India
Here’s a comprehensive and well-structured overview of new Goods and Services Tax (GST) rules in India, covering key changes effective from April–July 2025 and potentially beyond. This deep-dive spans around 2,000 words, designed for businesses, tax professionals, and taxpayers who want full clarity.
1. 🔐 Mandated Multi-Factor Authentication (MFA) on GST Portals
What’s new?
- From April 1, 2025, MFA (password + OTP or biometric) is mandatory for all GST portal access, including filing returns, e-invoice, and e-way bills—regardless of turnover (InstaBiz Filings, lexworks.co.in).
Implementation timeline:
- Jan 1, 2025: Taxpayers with AATO > ₹20 crore.
- Feb 1, 2025: AATO > ₹5 crore.
- Apr 1, 2025: All taxpayers required to adopt MFA (lexworks.co.in).
Why it matters:
- Enhances portal security and user accountability.
- Reduces scope for data fraud and unauthorized filings.
Suggested next steps:
- Review and update registered mobile/email for OTP delivery.
- Familiarize yourself with OTP or authenticator-based login flow.
- Train accounting and GST teams adequately.
2. ✍️ Aadhaar Biometric Authentication for Authorized Representatives
- From July 1, 2025, PAN-linked individuals (e.g., directors, authorised signatories) must complete biometric Aadhaar authentication to access GST services (BCL India, lexworks.co.in, ClearTax).
- This step helps curb fake registrations and reinforce identity verification.
3. 🚚 Stricter E‑Way Bill Rules
Two key limitations:
- E‑way bills can only be generated for invoices not older than 180 days (i.e., invoices older than 6 months become invalid for e-way bill creation) (Munim).
- Maximum extension for an e‑way bill is 360 days from issuance—after that, it cannot be renewed (Munim, lexworks.co.in, India Briefing).
Impact GST:
- Logistics and transport firms must ensure timely generation and extensions.
- Old invoices beyond 6 months become non-compliant for e-way movement.
4. ⚡ E‑Invoicing Enhancements
a. Lowered Threshold for Mandatory Reporting
- From April 1, 2025, businesses with AATO above ₹10 crore (down from ₹100 crore) must upload invoices to the Invoice Registration Portal (IRP) within 30 days of invoice date (ClearTax).
b. Credit Notes Under E‑Invoicing
- E‑invoicing now includes credit notes: these must also be reported via the IRP, receive an IRN, and QR code generated—effective April 1, 2025 (India Briefing).
Why it matters:
- Prevents fake invoicing and input tax credit mismatches.
- Requires ERP/billing systems to sync with IRP and handle IRN generation.
5. 📄 Detailed HSN Reporting in GSTR‑1 / 1A
- From April 2025, GSTR‑1 will split HSN reporting into separate B2B and B2C tables (Reddit, Stocks Mantra).
- Dropdown-driven HSN entry replaces manual inputs.
- Businesses with ≤ ₹5 crore AATO: 4-digit HSN codes mandatory. Over ₹5 crore: 6-digit HSN codes mandatory (BCL India, Stocks Mantra).
Benefit:
- Enhances standardization and accuracy in tax reporting.
- Reduces classification errors, improving ITC reconciliation.
6. Input Service Distributor (ISD) Registration Mandatory
Effective April 1, 2025:
- Companies with multiple GST registrations under one PAN must register as an ISD, if they receive common input services (rent, security, software, etc.) (BCL India, InstaBiz Filings).
- Cross-charging of ITC is no longer allowed.
- Monthly filing of GSTR‑6 becomes mandatory (due 13th of next month) (BCL India).
Why New GST rules in India:
- Ensures fair and auditable ITC allocation.
- Prevents misuse and inaccurate credit distribution.
7. 📊 GSTR‑3B Returns: Auto-Filled & Locked Post‑July 2025
Key changes:
- Table-3 of GSTR‑3B (outward supplies and liability) is auto-populated from GSTR‑1 / IFF / GSTR‑1A and becomes non-editable from the July 2025 tax period, i.e. returns filed in August 2025 onwards (BCL India).
- Only corrections can be made via GSTR‑1A before final filing (ClearTax).
- GSTR‑3B forms will auto-draft liability and ITC data from GSTR‑1 and GSTR‑2B starting April 2025, reducing manual edits (BCL India).
Urgent action required:
- Validate GSTR‑1/IFF filings before July 2025.
- Run reconciliations between GSTR‑1/GSTR‑2B and anticipated GSTR‑3B values.
8. ⏳ Time-Bar on Filing Returns After 3 Years
Starting July 1, 2025, GST returns cannot be filed or revised if overdue by more than three years from due date (time-bar) (ClearTax).
Key implications:
- Returns such as GSTR‑1, GSTR‑3B, GSTR‑4, GSTR‑5, GSTR‑6, GSTR‑7, GSTR‑8, GSTR‑9 will be blocked beyond three years (ClearTax, Kanakkupillai).
- For example, as of August 1, 2025, returns for periods before July 2022 will become unfileable (ClearTax, The Times of India, The Economic Times).
What this means:
- Taxpayers must reconcile and file any outstanding returns up to the cutoff.
- No exceptions unless government introduces relief or redressal; experts warn of hardship without flexibility (The Economic Times, The Times of India).
9. ✏️ Revisions to GSTR‑7 and GSTR‑8 Formats (TDS/TCS Forms)
- From February 11, 2025, GSTR‑7 (TDS) needs invoice-level details: deductee GSTIN, invoice number, amount paid, TDS deducted (ClearTax).
- GSTR‑8 (TCS by e-commerce operators) also requires expanded transaction-level data for clarity and accuracy (ClearTax).
10. 🏨 Sector-Specific Rate & Valuation Updates
a. Hotels and Hospitality
- Declared tariff abolished; tax now on actual transaction value.
- Hotels charging above ₹7,500/day must charge 18% GST on meals and services, with full ITC eligibility (Stocks Mantra).
b. Used Car Transactions
- Single 18% GST on margin value (sale price minus purchase price) for all used cars.
- Earlier differential rates (12% small cars, exemptions for EVs) removed (Stocks Mantra, LinkedIn).
11. 📦 New Invoice Series Requirement
- From April 1, 2025, all taxpayers must begin a new, sequential invoice series for the financial year—must be unique and non-repeating (LinkedIn).
12. 🧾 Revised TDS Return Filing Deadline
- From November 1, 2024, Form GSTR‑7 (TDS return) must be submitted by the 10th day of the month succeeding the relevant month, regardless of whether TDS was deducted (TaxGuru).
13. 📲 Policy Developments & Rate Rationalization Proposals
a. GST Coverage of UPI Aggregator Charges
- The GST Council is considering applying 18% GST on payment aggregator charges for small-value transactions under ₹2,000. These charges are typically 1–2% of transaction amount (Reddit).
b. Fuel Taxation Moves
- India is exploring reduced GST on fuel blends with high ethanol content (e.g., 100% ethanol), aiming to promote biofuels and reduce fossil dependence (The Economic Times).
c. Proposed Exemption for Insurance
- Transport Minister Nitin Gadkari has advocated for removing the 18% GST on life and medical insurance premiums—lobbying GST Council for policy change (Reddit).
14. 🧾 UPI Data & GST Notices: Ground-Level Impacts
Recent enforcement activities have exposed small businesses and street vendors to GST notices triggered by UPI transaction data, even above ₹40 lakh turnover, despite many products being exempt from GST (The Times of India).
Key takeaways from new GST rules in India:
- GST departments insist that mode of payment (UPI or cash) does not exempt GST liability (The Times of India).
- A vegetable vendor in Karnataka received a ₹29 lakh notice based on ₹40 lakh digital transactions. This has sparked protests and calls for relief measures (The Economic Times).
- Vendors in some cities are now demanding cash-only transactions to avoid digital footprint and notices (The Times of India).
- Karnataka CM has scheduled stakeholder talks in response to escalating pushback against retrospective notices (The Economic Times).
15. ✅ Summary Table — Major Changes at a Glance
| Change Area | Effective Date | Key Impact |
|---|---|---|
| Multi-Factor Authentication | April 1, 2025 | Mandatory for all GST portal / e-way / invoice access |
| Aadhaar Biometric Auth. | July 1, 2025 | PAN-linked individuals must authenticate via Aadhaar |
| E-Way Bill Restrictions | Jan 1 / April 2025 | 180-day invoice limit; 360-day extension cap |
| E-Invoice: Lowered Threshold | April 1, 2025 | AATO ₹10 Cr threshold; 30-day IRP mandate |
| E-Invoicing for Credit Notes | April 1, 2025 | Credit notes subject to IRN & QR code reporting |
| HSN Reporting Format | April 2025 | B2B/B2C bifurcation; mandatory dropdown codes |
| ISD Registration | April 1, 2025 | Required for common input service receivers; GSTR‑6 filing |
| GSTR-3B Auto-Lock | July 2025 tax period | Table-3 auto-populated & non-editable |
| 3-Year Filing Time-Bar | July 1, 2025 | Returns older than 3 years cannot be filed or revised |
| GSTR-7 / GSTR-8 Format Changes | Feb 11, 2025 | Invoice‑level TDS/TCS detail capture mandatory |
| Hotel / Used Car GST Valuation | April 2025 | Hotels: actual value; Used cars: margin-based 18% |
| New Invoice Series | FY 2025‑26 | Unique sequential series required per financial year |
| GSTR-7 Filing Deadline | Nov 1, 2024 | Monthly return due by 10th succeeding month |
🧾 Practical Checklist for Businesses
Immediate Actions (Before April–July 2025):
- Update contact details for OTP reception and enable MFA access.
- Initiate Aadhaar biometric authentication for authorised users.
- Reconcile pending returns—especially those falling in or before July 2022 to avoid the three-year time-bar.
- Audit GSTR‑1 / IFF vs GSTR‑2B data; correct via GSTR‑1A ahead of July 2025.
System and Process Upgrades about new GST rules in India:
- Update ERP / invoicing systems to:
- Integrate with IRP for invoices and credit notes.
- Implement dropdown HSN selection.
- Auto-generate sequential invoice series each fiscal year.
- Adopt ISD mechanism if multiple GSTINs exist under same PAN.
- Train accounting and compliance teams on workflow and corrections using GSTR‑1A and ISD invoices.
Monitoring & Advocacy:
- Stay tuned for potential GST rule revisions regarding UPI aggregator charges under ₹2,000.
- Watch for updates on proposed GST exemption in insurance and reduced duties for ethanol fuel blends.
⚠️ What Remains Under Debate from new GST rules in India
- GST on UPI aggregator fees: Though not yet enacted, proposals suggest adding 18% GST on aggregator commissions for small-value transactions. Businesses should monitor developments (Munim, India Briefing, Kanakkupillai, Reddit, BCL India, ClearTax, lexworks.co.in, Stocks Mantra, ClearTax, LinkedIn, TaxGuru, Reddit).
- Insurance premium GST: Minister Nitin Gadkari has pushed for removal of 18% tax on life and medical insurance. Change is not yet formalized (Reddit).
Final Thoughts
India’s GST regime is moving to a more secure, digital, and rule-driven environment in 2025. Key themes include:
- Tightened compliance (MFA, data lock-in, time-bar).
- Greater data transparency (invoice-level forms, HSN accuracy).
- Sector-specific rationalization (hotels, used cars).
- Digital accountability (Aadhaar biometric and e-invoice reporting).
Though these changes increase administrative complexity, they are meant to usher in a more robust and fraud-resistant tax ecosystem. Non-compliance or delays in adapting systems may expose businesses to financial and regulatory risks.
If you’d like detailed guidance tailored to your sector, help with software integration, or assistance reviewing specific pending returns, I’d be happy to help.