GST changes landscape in India witnessed significant change in 2024, with a number of significant revisions and regulatory changes that have influenced both businesses and the economy. This year has seen both difficulties and important turning points, from improved compliance procedures to the implementation of new laws meant to increase tax collection.
Businesses and tax experts are eager to learn how the GST structure will develop further as 2025 approaches. How will the tax environment be impacted by the government’s continuous push for digitisation and honesty, and what changes might we expect?
2025 looks to be another year of development, reform, and reformation in India’s GST journey, with new rules and possible changes in the works. Here are some changes that were implemented in 2024 and their implications for 2025.
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GST E-Invoicing Rolled Out for Small Businesses
At the 2024 GST Council meeting, it was determined to propose a new rule mandating e-invoices to be posted to the Invoice Registration Portal (IRP) within 30 days of the invoice generation date, effective April 1, 2025. This action seeks to boost compliance nationwide, decrease tax evasion, and improve transparency.
GST Returns 2.0: Simplified Filing with Invoice Management
To make compliance and auditing easier for taxpayers, the GST Network included new features. The Invoice Management System (IMS), which went online on October 14, 2024, is the most recent. Its goal is to greatly simplify the input tax credit (ITC) claim process. This more user-friendly approach aims to improve the reconciliation process, decrease errors, and make filing easier.
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AI-Powered Anti-Evasion: GST Audits and Inspections in Focus
The Indian government has been stepping up its efforts to address tax fraud under the GST since 2024. This includes the implementation of new artificial intelligence (AI) methods and technology to stop tax evasion as well as more thorough monitoring of false Input Tax Credit (ITC) claims. Additionally, the government has increased its efforts to combat fraudulent invoicing and keep an eye on fake GST registrations. There has been discussion about a potential adjustment to the frequency and scope of GST audits in 2024. Regular audits and improved data analysis through artificial intelligence (AI) could be considered as ways to improve transparency and compliance, particularly with big businesses.
Revised GST Rates on Key Sectors
The GST Council has periodically modified tax rates in response to continuous economic shifts and to benefit certain sectors. Rates for sectors like real estate, e-commerce, hospitality, and specific consumer items changed significantly in 2024. There were also further explanations about the extent of specific limitations and tax slabs.
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Ease of Doing Business Initiatives
The government is still making it easier for companies, particularly MSMEs (Micro, Small, and Medium Enterprises), to comply with GST. At its 55th meeting in Rajasthan on December 21, 2024, the GST Council considered the publishing of a concept note on simplifying the GST registration procedure for small enterprises and the planned legal revisions.
GST on Online Gaming and Casinos
Discussions concerning GST on internet gambling and casinos have drawn more attention in 2024. Online gaming revenue jumped 412% to ₹6,909 crore in just six months, according to Finance Minister. This comes after online games that rely on skill or chance were subject to a 28% GST beginning October 1, 2023. Revenue at casinos increased by 30% as well.
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Integrated GST (IGST) for Exports
Since exporters frequently experience delays in collecting GST refunds for exported items, the government has been aiming to improve the refund procedure for them. To reduce backlog claims and improve transparency, a number of initiatives were implemented in 2024 to streamline the IGST refund procedure.
GST on Digital Services
To ensure clarity and clear standards, revisions were made in 2024 about the GST taxation of services offered by digital platforms such as OTT, e-learning, and online subscriptions.
Important Changes expected in Year 2025
In order to avoid fraudulent activities, GST regime will implement compliance adjustments in 2025, such as requiring multi-factor authentication (MFA) for access to the GST portal and limiting the creation of E-Way Bills (EWBs). To be compliant, firms that are registered for GST should take notice of the important requirements and implementation dates.
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Multi-factor authentication
Accessing GST websites is made even more secure with multi-factor authentication. If a taxpayer’s Annual Aggregate Turnover (AATO) exceeds ₹1 billion, MFA is currently required; if it exceeds ₹200 million, MFA is optional.
E-Way Bill Generation: New Restrictions Imposed
The creation of EWBs will be limited to base documents that are no more than 180 days old as of January 1, 2025. This prevents fraudulent activities like backdating invoices and guarantees the timely and legal transportation of products.
Limit on E-Way Bill extensions
The overall extension duration for EWBs will be 360 days from the date of original generation as of January 1, 2025. This seeks to guarantee effective logistics, avoid endless extensions, and reduce travel times.
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Implementation of the IMS System
The IMS system, which was implemented on the GST site, requires supply recipients to accept, reject, or retain pending invoices and credit notes as of October 1, 2024. The document will be considered accepted if nothing is done about it. Notably, the supplier’s tax liability is increased by the associated tax amount in the event that a recipient rejects a credit note.
Businesses have found it difficult to integrate IMS with their current ERP systems. More difficulties are presented by the system’s continued functioning restrictions despite its introduction. Through 2025, professionals and taxpayers must continue to be on the lookout for new issues and adjust to IMS’s changes.
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