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:
- From Jan 1, 2025: Mandatory for businesses with AATO over ₹20 crore
- From Feb 1, 2025: Extended to those with AATO above ₹5 crore
- 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:
- You must register as an Input Service Distributor.
- Common input services must be distributed via ISD invoices.
- 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:
- GSTR-7 (TDS Return): Now requires invoice-wise details including the deductee's GSTIN, payment details, and the tax deducted.
- 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:
- 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.
- 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:
- Failure to generate IRNs (Invoice Reference Numbers)
- Rejection of delayed invoices
- Possible disruption in ITC flow and vendor reconciliation