GST WEEKLY UPDATE : 21/2025-26 (25.08.2025)
1. Advisory –System Enhancement for Order-Based Refunds:
- As per the available functionality, taxpayers could claim refunds under the category “On account of Assessment/Enforcement/Appeal/Revision/Any Other Order” (ASSORD) only if:
- The cumulative amount of the Demand ID showed a negative balance (i.e., refund eligible).
- The status of the Demand ID was “Refund Due”.
This restriction prevented taxpayers from claiming refunds when individual components (minor heads) of a demand showed negative balances and the overall cumulative balance was zero or positive.
Read Also: GST Revamp on the Horizon: What Businesses and Consumers Should Know
- For the above scenario, several references have been made by the tax payers and tax officers stating that the taxpayers are not able to claim the refund. Accordingly the following changes have been implemented in the system:
- Refunds can now be claimed irrespective of the Demand ID status.
- Refunds are allowed even when the cumulative balance is positive or zero, provided any minor head has a negative balance.
- Only negative balances will be auto-populated in the refund application (Form RFD-01); taxpayers cannot claim any refund for the positive amounts within the demand.
- Order Number Suggestions:The system automatically suggests the most recent demand order associated with a negative balance such as order-in-original, rectification order or appellate orderetc.
- Tooltips:Clear guidance is provided near the Order No.and Demand ID fields to help taxpayers enter the correct details.
- A comprehensive user manual and FAQs will be shared shortly. In case of any discrepancies or system-related queries, a ticket may be raised with the GST helpdesk.
Read Also: GSTN Postpones Non-Editable Table 3.2 in GSTR-3B After Taxpayers’ Grievances
2. Advisory: Updated AATO on NIC-IRP:
This is to inform you that the Aggregate Annual Turnover(AATO) information maintained
On the NIC e-Invoice Portals (einvoicel.gst.gov.in and einvoice2.gst.gov.in) is being aligned with the turnover data computed in the GST system.
Accordingly, the AATO as per GST system records would be reflected on the NICe-Invoice portals with effect from 1st September 2025.
In case you notice any discrepancies in your AATO as displayed on the IRP portal after the said date, you may raise the matter by logging a ticket on the GST Grievance Redressal Portal or contacting the GST Helpdesk.
Read Also: GSTAT: Centre Notifies New Rules For GST Appellate Tribunal
3. CBIC advises against GST rate speculation ahead of September’s council meeting:
The Central Board of Indirect Taxes and Customs (CBIC) has issued a cautionary advisory urging the public and media outlets to refrain from speculating on potential changes in Goods and Services Tax (GST) rates. In its statement, CBIC clarified that all decisions on GST rates are made collectively by the GST Council.
“It is kindly requested that speculation on GST rates may be avoided. Decisions in this regard are taken collectively by the GST Council, which comprises of the Centre and States. Premature speculation gives rise to baseless rumours and may cause volatility in the markets. All stakeholders are advised to kindly await the official announcements, which will be made after the GST Council meeting scheduled on 3rd and 4th September, 2025,” CBIC posted on X.
This step is taken to prevent the spread of baseless rumours that may influence market conditions adversely.
The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will convene on September 3-4 in New Delhi to deliberate on key reforms, including a shift to a two-slab GST structure. In an office memorandum, the GST Council Secretariat confirmed that the council will take up recommendations made by three Groups of Ministers (GoMs) on rate rationalisation, compensation cess, and taxation of health and life insurance.
This council includes members from both the central and state governments, ensuring a balanced and comprehensive evaluation of any proposed changes. The CBIC’s advisory aims to reinforce the protocol of awaiting official announcements to safeguard against market disruptions that can result from premature speculation.
Last week, the GoM on rate rationalisation broadly endorsed the Centre’s proposal for a two-tier GST structure.
As per the reform blueprint, GST could be simplified into two slabs of 5% and 18%, classifying goods and services as “merit” or “standard”. Additionally, a special rate of 40% is proposed for select items such as ultra-luxury cars and sin goods. Currently, GST is a 4-tier structure of 5, 12, 18 and 28 per cent.
The council’s discussions are expected to set the stage for one of the most significant changes in GST design since its rollout in 2017.
Read Also: New GST Mandates from April 2025: MFA, E-Invoicing & More
4. AAR & Important Judgements:
(i) Hon’ble Gujarat Highcourt Decision Regarding assessee to file rectified GSTR-1 as he inadvertently showed turnover of sister concern in his GSTR-1:
(Applicant – Sanghvi Metal Corporation)
The State Tax Officer issued a show-cause notice as outward supplies reported in GSTR-1 exceeded those in GSTR-3B, and input tax credit (ITC) claimed in GSTR-3B was higher than ITC reflected in suppliers’ GSTR-1.
The assessee explained that during the initial year of GST, sales data of its sister concern was mistakenly uploaded in its GSTR-1, creating an artificial mismatch with GSTR-3B.
Despite the explanation, tax demand with interest and penalty was raised. The appellate authority dismissed the assessee’s appeal on the ground of limitation without examining merits.
The assessee approached the High Court seeking permission to rectify its GST returns, arguing that the discrepancy was a clerical error that required correction.
The High Court held that the error in turnover reporting was inadvertent and rectifiable. The assessee was permitted to file revised GSTR-1 to align with GSTR-3B, and the impugned appellate order was set aside.
(ii) Hon’ble Delhi Highcourt Decision Regarding No negative terminology’ appears for limitation u/s-107; Demand order condonable beyond outer-limit:
(Applicant – Pashupati Overseas LLP)
The Court reaffirmed that the right to a first appeal is a substantive and valuable right and cannot be denied merely on limitation grounds, especially where the law does not expressly prohibit condonation beyond a fixed period.
Unlike other statutes, Section 107(4) contains no restrictive wording such as “not thereafter”; hence, the time limit of 3 months plus a condonable 1 month should be read flexibly, considering circumstances.
Relying on its earlier decision in August Attorneys, the Court held that limitation begins only when the order is communicated to the assessee, not merely when the order is passed.
Delay in filing appeal was condonable due to valid reasons, including medical grounds and the assessee’s bona fide request for additional time, reflecting a pragmatic and justice-oriented approach.
The HC held that orders under Section 74 are appealable, restored the assessee’s right to file appeal, and granted liberty to file by 31st September, reinforcing judicial support for protecting taxpayers’ appellate rights.
(iii) AAR On Permanent Employee’s Accomodation Charges Exempt from GST, Trainee Fees Taxable:
(Applicant – Suzuki Motor Gujarat Pvt. Ltd)
The AAR held that accommodation provided to permanent employees constitutes a perquisite under the employment contract and does not amount to “supply” under Section 7 of the CGST Act. Accordingly, GST is not leviable on the amounts recovered from employees.
Since student trainees are not employees, the dormitory facility extended to them cannot be treated as a perquisite. The AAR ruled that the service qualifies as “supply,” making GST payable on recoveries from trainees.
The company can claim ITC on GST paid to ASPs for accommodation services provided to employees. However, the credit will be restricted to the portion of cost borne by Suzuki itself, excluding the amounts recovered from employees.
As Suzuki is charging GST on recoveries from student trainees, the AAR permitted full ITC on the GST paid to ASPs for such services.
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