Major GST Updates Effective April 1, 2025: What Every Business Needs to Know

As we step into a new financial year, the Goods and Services Tax (GST) ecosystem in India is poised for a wave of crucial reforms. The government has rolled out a series of regulatory updates aimed at simplifying compliance, reinforcing data security, and encouraging consistent operational practices across businesses.

Whether you're a small trader or a large enterprise, it's time to realign your systems and prepare for the new rules coming into force from April 1, 2025. Here's a breakdown of the major changes that could impact your GST compliance strategy.

1. Multi-Factor Authentication (MFA) Becomes Universal

The use of Multi-Factor Authentication (MFA) — also referred to as 2FA — is being expanded to strengthen login security for the e-Way Bill and e-Invoicing portals.

Implementation Schedule:

1. From Jan 1, 2025: Mandatory for businesses with AATO over ₹20 crore
2. From Feb 1, 2025: Extended to those with AATO above ₹5 crore
3. From Apr 1, 2025: Applicable to all GST-registered taxpayers

This security layer will help curb unauthorized access and reduce fraudulent activity.

2. Mandatory ISD Registration for Multi-State Operations

Until now, businesses operating with multiple GSTINs under a single PAN had the flexibility to use either the Input Service Distributor (ISD) mechanism or cross-charging to allocate shared expenses like rent or consultancy fees.

Starting April 1, 2025, the ISD mechanism will become mandatory for such taxpayers. Here's what this means:

1. You must register as an Input Service Distributor.
2. Common input services must be distributed via ISD invoices.
3. Filing of GSTR-6 will be essential to allocate ITC correctly across different branches.

This move aims to bring greater transparency and consistency in credit utilization across the group entities.

3. Revised GSTR-7 and GSTR-8 Formats

In an effort to improve reporting granularity, the government has modified the structure of two key GST returns:

1. GSTR-7 (TDS Return): Now requires invoice-wise details including the deductee's GSTIN, payment details, and the tax deducted.
2. GSTR-8 (TCS for E-Commerce Operators): Enhanced to reflect more detailed information on transactions processed via e-commerce platforms.

These changes, introduced through Notification No. 09/2025 – Central Tax, will support better reconciliation and audit trails.

4. e-Way Bill Restrictions to Tighten Movement Tracking

Two significant limitations will apply to e-Way Bill operations from April 1, 2025:

1. 180-Day Document Rule: You can only generate e-Way Bills for documents dated within the previous 180 days. For example, a bill dated before October 3, 2024, will no longer be valid for e-Way Bill generation post-April 1, 2025.
2. 360-Day Extension Limit: e-Way Bills can now be extended only within 360 days of their original date. A bill raised on April 1, 2025, can be extended only up to March 27, 2026.

These restrictions aim to prevent misuse and improve tracking of goods in transit.

5. 30-Day Deadline for E-Invoice Reporting Now for ₹10 Cr+ Turnover

The government continues to tighten e-invoicing compliance. Previously applicable to businesses with AATO above ₹100 crore, the 30-day limit for reporting e-invoices on the Invoice Registration Portal (IRP) will now apply to businesses with AATO exceeding ₹10 crore, starting April 1, 2025.

Non-compliance will result in:

1. Failure to generate IRNs (Invoice Reference Numbers)
2. Rejection of delayed invoices
3. Possible disruption in ITC flow and vendor reconciliation