GST 2025: New Financial Year, New Compliance Twists!
Starting April 1, 2025, businesses will have to deal with stricter compliance, tighter security, and fewer loopholes to squeeze through. If you thought tax compliance was already complex, buckle up because GST is about to get even more "interesting."
From stricter rules on tax credit distribution to mandatory two-step logins for the GST portal, compliance is becoming tighter.
1. E-Way Bill & E-Invoice Security: The Taxman is Watching!
The NIC has upgraded its E-Way Bill and E-Invoice systems to prevent unauthorised access. If you were planning to take shortcuts, the taxman’s digital watchdogs are now sharper than ever. Stay compliant or risk getting locked out of the system!
2. Multi-Factor Authentication (MFA) – No More One-Click Logins
MFA is now mandatory for all taxpayers, regardless of turnover. If logging in with just a password feels too easy, say hello to OTPs, additional verification steps, and possibly a mini obstacle course.
3. E-Way Bill Expiry? No More Infinite Extensions!
E-Way Bills will now expire within 180 days from the invoice date, and extensions are capped at 360 days. Translation? No more using an old bill from last year to move goods today—it's time to get your logistics in order!
4. GSTR-7 Must Be Filed Sequentially – No Skipping Ahead!
If you file GSTR-7 for tax deductions at source (TDS), you can no longer skip months or file out of order. The system now demands proper sequence, just like a well-behaved queue at an Indian railway station (in theory, at least).
5. Biometric Authentication for Directors – Fingerprint Your Way to Compliance
Promoters and directors will now need to visit a GST Suvidha Kendra for biometric authentication because just having a PAN and Aadhaar isn’t enough proof that you exist!
6. Input Service Distributor (ISD) Registration: No Longer Optional
Businesses with multiple GST registrations under a single PAN are now required to register as an Input Service Distributor (ISD). This move aims to streamline the distribution of Input Tax Credit (ITC) from inter-state reverse charge supplies. Neglecting this could lead to ITC denials and a minimum penalty of ?10,000. If you've been playing musical chairs with your ITC, it's time to pick a seat and stick to it.
According to experts and tax practitioners, businesses have already been informed about these changes and are likely to spring up new surprises and streamlining of compliances.
Sivakumar Ramjee, Executive Director- Indirect Tax, Nangia Andersen LLP, says, “ These changes aim to boost security and streamline compliance, but let’s be honest—they also make tax filings a little more trickier. So, update your systems, train your team, and maybe invest in a stress ball or two.”
Sandeep Sehgal, Partner-Tax, AKM Global, a tax and consulting firm, states, “Starting April 1, 2025, businesses need to gear up for major GST changes. The government is cracking down on outdated invoices and introducing a relief scheme for past tax dues."
"Additionally, businesses with multiple branches must register as Input Service Distributors to properly allocate tax credits, and new restrictions on E-Way Bills will ensure smoother logistics. Other key changes include tighter scrutiny of GST returns, quicker action on non-compliance, and the phasing out of paper-based invoices with stricter e-invoicing norms. These updates aim to simplify tax compliance, improve transparency, and prevent fraud," Sehgal added.
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