GST New Rules Applicable from 1st April 2025: Complete Guide for Taxpayers

The dawn of the financial year 2025-26 has brought several significant updates in the GST law that are mandatory for every taxpayer to understand. These changes, applicable from 1st April 2025, are aimed at tightening compliance, closing loopholes, improving data reporting, and moving towards full digital governance in the Goods and Services Tax (GST) regime.

This article by CMAknowledge.in is a detailed explanation of all GST changes effective from 1st April 2025, including their background, implications, examples, and action plans for businesses and tax professionals.

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Why These GST Changes Are Crucial in FY 2025-26

Every financial year, the GST Council introduces refinements to the law based on taxpayer feedback, revenue leakages, and global best practices. However, the 2025 changes are being called "transformational" due to their impact on:

• Taxpayer data security
• Real-time invoice reporting
• Input Tax Credit (ITC) accuracy
• Cross-branch tax allocations
• Transport & supply chain efficiency
• Recovery of past dues via amnesty schemes

Let’s explore each of the major rules.

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1. Mandatory Multi-Factor Authentication (MFA) for GST Portal Login

What is MFA?

Multi-Factor Authentication (MFA) means using two or more methods to log in. As of 1st April 2025, the GST portal requires all users to verify identity using:

• User ID + password
• OTP sent to registered mobile/email
• Security question or biometric verification (optional)

Why It’s Needed

There have been rising cases of tax fraud due to compromised credentials. MFA ensures that even if someone has your password, they cannot log in without the OTP.

Action Steps

• Update mobile number and email on GST portal
• Enable MFA settings
• Inform employees or tax staff handling logins

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2. ISD Registration Made Mandatory for ITC Cross-Charge

Previously, using the Input Service Distributor (ISD) mechanism was optional for companies with multiple GST registrations under one PAN. But now, it is mandatory for all such businesses.

What Has Changed?

• If a head office receives services (e.g., legal fees, rent, consulting), it must distribute ITC to branch offices via ISD.
• ISD registration needs to be taken separately.
• Monthly filing of GSTR-6 becomes compulsory.

Real Example

ABC Ltd. has head office in Mumbai and branches in Delhi and Chennai. If Mumbai office pays Rs. 10,00,000 for legal consultation, it must distribute related ITC via ISD to other branches.

Why It Matters

This helps prevent dual or wrongful ITC claims and ensures uniformity in branch-wise credit utilization.

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3. 30-Day Time Limit for E-Invoice Reporting

The GST Council has now set a strict 30-day limit for uploading e-invoices to the Invoice Registration Portal (IRP).

Applicability

• All taxpayers with turnover above Rs. 10 crore

Example

If an invoice is dated 1st April 2025, it must be uploaded to the IRP by 30th April 2025. Delay will result in IRP rejection.

Risk of Non-Compliance

• ITC loss to buyer
• Tax liability without valid invoice
• Penalty for non-issuance

Compliance Tip

• Use ERP or billing software with auto-upload to IRP
• Assign responsibility to designated staff

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4. GST Rate Changes from April 2025

a) Used Car Sales

GST rate has increased on second-hand cars:

• From 12% to 18% (effective 1st April 2025)

This affects dealers, buyers, and resellers. The higher tax outgo may push prices up slightly.

b) Hotel Industry: Tariff Concept Abolished

Earlier, tax was based on the declared tariff (rack rate). From 1st April 2025, GST will be charged based on the actual price paid.

• Rooms above Rs. 7,500/night: GST at 18%
• Restaurant services in such hotels: GST at 18%
• ITC availability improved for businesses

This removes ambiguity and aligns GST with real transaction value.

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5. GSTR-7 and GSTR-8 Format Revised

Applicable from February 2025, but mandatory from April onwards.

What Changed?

• Vendor-wise TDS/TCS data to be captured
• More fields for reconciliation
• Auto-sharing with vendors for ITC purposes

Affects Whom?

• Government departments
• E-commerce operators (like Amazon, Flipkart)

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6. GSTR-3B Table 3.2 Now Auto-Populated

The data from GSTR-1 and IFF will automatically flow to Table 3.2 (inter-state supply details) of GSTR-3B.

Key Point

• Manual editing is disabled
• Any error must be corrected in next month’s GSTR-1/IFF

What to Do

• Check GSTR-1 data thoroughly before filing
• Maintain accurate B2B and B2C segregation

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7. E-Way Bill Validity Limited to 180 Days

What’s New?

• E-Way Bills can be generated only for invoices not older than 180 days
• Total validity (including extension) capped at 360 days

Why?

To curb the misuse of old or fake invoices in logistics and tax claims.

Industries Affected

• Transporters
• Manufacturers
• Warehouse businesses

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8. GST Amnesty Scheme SPL01 & SPL02 Launched

To promote clean-up of past dues, the government introduced a limited-period amnesty scheme.

Key Highlights

• Applicable for returns due till 31st March 2025
• Waiver of late fees/interest if dues paid fully
• Returns must be filed before 30th June 2025

Who Should Apply?

• Small businesses with pending GSTR-3B
• Cancelled GSTNs due to non-compliance
• Taxpayers with unresolved notices

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9. New Rule on Reporting Negative Values in GSTR-1

The system now allows negative values in GSTR-1 to rectify over-reported supply or tax in previous periods.

Benefit

• Taxpayers can now adjust invoices without legal complications
• Smooths out credit notes, cancellations, and returns

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10. More Real-Time Data Sharing with Departments

From April 2025, GSTN will integrate real-time transaction data with:

• Income Tax Department
• CBIC
• State GST departments

Implication

• Mismatches in turnover, PAN, and ITC will trigger automated notices
• Taxpayers must ensure perfect alignment in filings

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Practical Compliance Tips for FY 2025-26

1. Invest in a Robust GST Software

Don’t rely on manual uploads. Automate IRP, GSTR, and e-way bill submissions.

2. Conduct Monthly GST Reconciliation

Match GSTR-2B, GSTR-3B, and books of accounts every month.

3. Train Your Staff

Ensure your accounts, logistics, and billing teams are aware of new rules.

4. Plan for ISD Structure

If you have multiple registrations, setup ISD today and file GSTR-6 on time.

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FAQs – GST Changes from April 1, 2025

Q1: Is MFA mandatory even for small taxpayers?

Yes, it is now compulsory for all logins, regardless of turnover.

Q2: What happens if e-invoice is not reported within 30 days?

It will be rejected by IRP and may cause ITC loss for the buyer.

Q3: Is GSTR-3B auto-fill editable now?

No. You can’t manually edit Table 3.2. Corrections must be made in GSTR-1.

Q4: Can I use old invoices for e-way bills?

Not if the invoice is older than 180 days as per new rule.

Q5: Is the GST Amnesty Scheme available to cancelled GSTINs?

Yes, if you file all pending returns and clear dues by 30th June 2025.

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Conclusion

The new GST rules applicable from 1st April 2025 bring a strong message: discipline, transparency, and accountability. Businesses that embrace these changes and invest in automation and training will benefit from fewer notices, smoother audits, and faster ITC.

Stay updated with CMAknowledge.in as we continue to guide you through the evolving landscape of Indian taxation and business compliance.