Overview of the New GST Rules

In accordance with Notification 12/2024, the Central Government has announced several amendments that took effect on February 11, 2025. These updates are crucial for anyone engaging in GST processes, whether for business registration, filing returns, or generating e-way bills.

Key Updates and Their Implications

The specific areas of change include:

GST Registration Processes

E-way Bill Requirements

GST Returns and Liability Adjustments

Changes in GST Registration Processes

Previously, businesses had two options for GST registration: through Aadhaar authentication or without it. Here’s how the changes impact the process:

Aadhaar Authentication Requirement:

If you opt for Aadhaar authentication, your application will be subject to a risk assessment based on your data parameters. If deemed high risk, a physical verification may be needed.

Non-Aadhaar Authentication:

Starting from February 11, 2025, if you choose to register without Aadhaar authentication, your application will not be submitted until you’ve completed a physical verification process. This verification involves providing documentation that must be validated in person, including:

1) Photographs

2) Proof of identity

3) Relevant business documents like rental agreements or utility bills

Verification Centers:

The government has established facilitation centers where applicants can physically complete their verification, streamlining the registration process for everyone involved.

E-way Bill for Unregistered Persons

A noteworthy change is the introduction of e-way bill regulations for unregistered persons:

Eligibility to Generate E-way Bills:

Starting February 11, 2025, unregistered individuals can generate e-way bills, making it easier for them to engage in the supply of goods while complying with transportation requirements.

To create an e-way bill, unregistered individuals must enroll through a new form, ER-03. This enrollment requires submitting personal details such as PAN.

Unique Enrollment Number:

Upon successful enrollment, individuals will receive a unique enrollment number that is necessary for all future e-way bill transactions.

Amendments to GST Returns

Along with changes in registration and e-way bills, revisions to the GST return process are also significant:

New Table in GSTR-3B:

A revised table in the GST return form GSTR-3B has been introduced to allow businesses to adjust negative tax liabilities. This adjustment mechanism is critical for businesses observing fluctuations in sales and returns, ensuring accurate tax payable.

Functional Implementation:

While provisions for this adjustment were previously offered, their functional implementation is set to take place post February 11, 2025. This new structure allows businesses to accurately report their financial status and reduces the complications arising from excess returns over sales.

Conclusion

These amendments are not just regulatory updates but also signify a move towards simplifying compliance for businesses across India. Both business owners and professionals need to understand these changes to efficiently manage their registrations, returns, and billings. As the GST landscape evolves, staying informed about these rules will enhance operational efficiency and compliance.

For more detailed guidance on GST compliance and related queries, consider joining specialized courses or visiting official resources. Don’t miss out on staying updated with any future changes or insights!

Stay informed and compliant. If you found this information useful, share it with fellow business owners and subscribe for the latest updates on GST regulations!

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Also read our other related articles– https://gstplatform.com/union-budget-2025-major-changes-in-tcs-and-tds-provisions-for-businesses-in-india/

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Overview of TCS and TDS in Previous Tax Regime

Until now, businesses with a turnover exceeding 10 Crore had to contend with complicated tax requirements.

Under Section 206C(1H), businesses were required to collect TCS at the time of sale when the sale amount exceeded 50 Lakhs.

Simultaneously, Section 194Q mandated TDS for purchases exceeding 50 Lakhs, creating overlapping liabilities for businesses.

This dual requirement often led to confusion among sellers and buyers as both had to navigate the complexities of their respective tax obligations, leading to potential penalties and compliance failures.

Key Changes in the Union Budget 2025

With the announcement of the Union Budget 2025, the government has amended the previously existing provisions effectively as follows:

End of TCS Collection on Sales: Starting from April 1, 2025, the TCS requirement under Section 206C(1H) will no longer be applicable. This change means that businesses exceeding the 10 Crore turnover threshold will not have to collect TCS on their sales transactions, providing a significant relief from compliance burdens.

Continuation of TDS on Purchases: Despite the removal of TCS liability, businesses will still need to adhere to the TDS requirements under Section 194Q for any purchases exceeding 50 Lakhs when the buy-side entity has a turnover exceeding 10 Crore.

Implications of the New Provisions

The modifications under the Union Budget will have a profound impact on how businesses operate, particularly in the following ways:

Simplified Tax Compliance: The removal of TCS removes the potential for confusion and mismanagement between sellers and buyers regarding who would deduct. This should streamline the sales transaction process significantly.

Reduced Financial Strain: Businesses will have fewer upfront costs related to TCS, possibly enhancing cash flow and allowing for more investment in growth opportunities.

Clearer Guidelines: The government has specified that if both parties in a transaction are liable for TDS under Section 194Q, it will take precedence over TCS responsibilities. This clarity helps businesses understand their obligations better.

Historical Context of Taxation in India

The changes are a part of an ongoing effort to simplify the taxation framework in India, especially for MSMEs and larger businesses. Over the years, multiple phases of taxation have sought to address the unique challenges faced by businesses:

Initial Introduction of TCS and TDS: These provisions were initially implemented to enhance tax compliance and collection mechanisms but have inadvertently created complexities, particularly for businesses with overlapping tax liabilities.

Response to Business Feedback: The recent changes reflect the government’s responsiveness to ongoing feedback from the business community regarding the tax system’s burdens.

Practical Application of the New Amendments

For businesses operating in India, understanding how to navigate these changes post-April 2025 is crucial. Here are a few considerations:

Consult a Tax Professional: Given the rapidly evolving landscape, companies should consult with tax professionals familiar with the new provisions to ensure full compliance and to leverage any potential benefits.

Stay Updated: Regularly monitor updates from the GST Platform and the CBEC-GST website for further elaborations on the implementation of these changes and how they may affect your business.

Conclusion

The amendments introduced in the Union Budget 2025 represent a significant shift in taxation policy, especially regarding TCS and TDS. By eliminating the TCS requirement while maintaining TDS on significant purchases, the government aims to make tax compliance more straightforward and manageable for businesses.
This change is expected to foster an environment of enhanced business operations, allowing companies to focus on growth without the burdensome compliance costs previously experienced. As India evolves its taxation framework, businesses must adapt to the changing landscape to optimize their tax obligations.

Stay informed about further legislative changes and engage with experts who can guide you through transitioning into this new compliance era.

If you want to learn more about GST compliance and the nuances of upcoming regulations, don’t forget to subscribe to our channel and stay updated with the latest information and practical insights!

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“After a certificate of registration in FORM GST REG-06 has been made available on the common portal and a Goods and Services Tax Identification Number has been assigned, the registered person, except those who have been granted registration under rule 12 or, as the case may be rule 16, shall within a period of thirty days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using invoice furnishing facility, whichever is earlier, furnish information with respect to details of bank account on the common portal.”

In this regard, the GST Department has issued an advisory requesting all taxpayers who have not yet furnished their bank account details on the GST portal, to furnish the same, in order to avoid disruption in their business activities as non-declaration of the same may lead to subsequent suspension and cancellation of the GSTIN.

For the same, the Government is planning to deploy a new functionality with the following features:

1. Failure to furnish the bank account in the stipulated time would result into following:

a) Taxpayer registration would get suspended after 30 days and intimation in FORM REG-31 will be issued to the Taxpayer

b) Taxpayer would be debarred from filing any further GSTR-1/IFF

2. Revocation of Suspension: If the taxpayer updates their bank account details in response to the intimation in FORM REG-31, the suspension will be automatically revoked.

3. Cancellation of Registration: If the bank account details are not updated even after 30 days of issuance of FORM REG-31, the registration after suspension may also be taken up for cancellation process by the Officer.

It is therefore advised that if your bank account details are yet to be updated on the GST portal, the same should be updated at the earliest to avoid suspension of the GST registration.

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GST department in an official letter , said that all the registration application filed on or before 30.06.2020 which remained pending for processing as on 15.07.20 , is deemed approved.

All other pending applications will be approved till 31.07.2020 in a special drive.

Normal process of deemed approval of registration will be started from 01.08.20.

Read Also : GSTN Advisory on rejected revocation Application

Full details given below :

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1. In case your application for revocation of cancellation of registration was rejected by the tax authorities before 12/6/2020 and you wish to avail benefit of RoD order 01/2020 dated 25.06.2020, as an interim measure, you can request the appellate authority or the higher authority to pass a simple offline order on it for restoration of the application.

2. Based on such order, your jurisdictional authority can restore the application for revocation of cancellation. You need to apply post login:- Registration- Restore Registration- Restore Revocation. You have to enter ARN of the order and would require to upload scanned copy of the order passed after clicking “Appeal in favour”.

3. GSTN is working on to remove present restriction on reapplication of the revocation of cancellation application. After that filing of revocation of application would become one step process. It is expected to be available shortly. The above suggested solution is an interim measure.

Read Also : Changes in GST

Read Also : Income Tax Return New Forms 

Read Also : ITR verification extension order

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