RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

On the impact of GST rate rationalization, it is reported that sales have shot-up for consumer durables, automobiles, white goods and in FMCG sector after 22.09.2025 and suppliers have been passing on the benefit of reduced GST rates to the consumers. The respective Ministries and CBIC shall also keep an eye on the suppliers so that due benefit is passed on. The rate cuts have indeed boosted the demand and festive sales. Some suppliers have recorded 40-60 percent growth in nine days post 22 September, 2025. However, since announcement was made on 15th August, the sales have been lower prior to 22 September.

At Government’s end, there is surveillance on e-com platforms, major FMCG companies and consumer durable suppliers to oversee that due to benefit is being passed on to the consumers. While many companies have issued public notices to this effect, many others are offering other festive discounts. However, there may be few suppliers who may not be passing the full benefit. It is hoped that over a period, market forces shall interfere with any malpractice and rates will stabilize once transition phase is over. All in all, GST rate cut has been a bonanza, both for suppliers as well as consumers. Hopefully also for exchequer - let’s see. However, due to festive season in October and positive impact of tax rate reduction, this month’s collection can be expected to be much higher.

GST Appellate Tribunal is now ready for e-filing of appeals before principal and other benches. The GSTAT has been officially launched by the Finance Minister and we can expect lot of activities now on this front.

The Goods and Services Tax Appellate Tribunal (GSTAT) has enabled a structured online mechanism for filing second appeals through its dedicated e-filing portal. Taxpayers, tax officers, and authorized representatives are required to complete a one-time registration before accessing the system for filing, managing, and tracking appeals. The launch of the GSTAT e-courts portal is developed in collaboration with GSTN and NIC, which allows taxpayers and practitioners to file appeals online, tack the progress, and participate in hearings through digital mode. To facilitate orderly submissions, staggered filing of appeals is permitted until 30.06.2026.

GSTAT e-filing portal has also issued an Advisory of e-filing of appeals and issued e-filing user manual, FAQs and user videos.

GST collection for the month of September has been released on 1st October, 2025. Accordingly, gross GST collections have shown a rise of 9.1% on YoY basis. Gross collection stood at Rs. 1,89,017 crore (Rs. 1,73,240 crore in September, 2024). The break up is Rs. 33,645 crore CGST Rs. 41,836 crore SGST Rs. 49,853 crore IGST and Rs. 11,190 crore as compensation cess. Domestic refunds were Rs. 16,251 crore (52.2% up) and export refunds were Rs. 12,406 crore (26.9% higher).

Due to higher refunds, net GST collection is Rs. 1,60,360 crore with just 5% growth on YoY basis (Rs. 1,52,787 crore in September, 2024. The main reason for slower growth in tax revenue could be attributed to slow buying due to tax rationalization announced on 15.08.2025 but made effective w.e.f. 22.09.2025 prompting people to defer shopping and ‘shraad’ period which is not considered to be auspicious by many.

Important changes in for GSTR -3B return w.e.f. 01.10.2025

Taxpayers should note the following crucial changes in Form GSTR-3B return effective from 01.10.2025:

• There will be no auto-population of Input Tax Credit (ITC) i.e., there will be no auto flow of ITC to GSTR-2B form and invoices shall be accepted in Invoice Management System (IMS) which will only be considered.
• The tax liability in GSTR-3B return which is auto calculated shall be non-editable and amendments, if any shall be in GSTR-1 or 1A, as the case may be.
• ITC reversal shall be done for credit notes. Tax can not be reduced on supplier’s credit notes unless the buyer reverses the ITC in its / his return. There will have to be proper accounting treatment in books of buyers.

GST Appellate Tribunal - An Update

Central Government has made GSTAT functional on a nationwide basis with e-courts portal

• The Goods and Services Tax Appellate Tribunal (GSTAT) has enabled a structured online mechanism for filing second appeals through its dedicated e-filing portal.
• Taxpayers, tax officers, and authorized representatives are required to complete a one-time registration before accessing the system for filing, managing, and tracking appeals.
• GSTAT e-Courts Portal has been unveiled to enable taxpayers and practitioners to file appeals online, track the progress of cases, and participate in hearings through digital mode.
• The Department of Revenue, in partnership with GSTN and NIC, has developed a digital platform that will anchor the work of GSTAT from the very start. e-Filing, case management tools, and electronic court modules will make proceedings smoother and more transparent, setting new benchmarks for the functioning of a Tribunal in our country.
• The process involves entering order details, furnishing party and demand particulars, uploading supporting documents, and completing payments either online or through Bharatkosh.
• The focus for GST shall be:
  • Jargon-free decisions in plain language, simplified formats and checklists, digital-by-default filings and virtual hearings, and time standards for listing, hearing and pronouncement.
  • The outcome we seek is straightforward: reduced legal frictions, greater simplicity, and delays in litigation addressed proactively, so cash flows move faster, MSMEs and exporters invest with confidence and citizens feel the benefits of the system.

(Source: Press Release ID 2170932 dated 24.09.2025)

Staggered filing of Appeals before GSTAT

GSTAT President has issued an order exercising the powers under Rule 123 of GSTAT (Procedure) Rules, 2025 to streamline the filing system of appeals before GSTAT against the orders of first Appellate Authority under section 107 of CGST Act, 2017 or orders of Revisional Authority under section 108 of CGST Act, 2017 in view of the huge pendency of appeals to be filed.

• The filing of appeals before GSTAT shall be staggered over a period of time to reduce the burden on the electronic system.
• The staggered time schedule is a under:

• However, in all the above cases, the last date by which appeals shall be filed will be 30th June, 2026.
• These time lines have been issued in exercise of powers to President under Rule 123 of GSTAT (Procedure) Rules, 2025 and are not in conflict with section 112(6) of the CGST Act, 2017.

(Source: GSTAT Order No. F.No. GSTAT/Pr. Bench/Portal /125/25-26/1499-1502 dated 24.09.2025)

Withdrawal of Circular No. 212/6/2024-GST dated 26.06.2025

CBIC has withdrawn its earlier Circular No. 212/6/2024-GST dated 26.06.2024 which provided for mechanism for evidence of compliance of conditions of section 15(3)(b)(ii) of CGST Act, 2017, by the suppliers.

• In terms of powers under section 168(1) of CGST Act, 2017, said Circular has been withdrawn. Therefore, the procedure prescribed vide the aforesaid circular for providing evidence of compliance of conditions of Section 15(3)(b)(ii) shall not be required.
• Suppliers will therefore, no longer be required to furnish such evidences (as per Circular No. 212) for post supply discounts w.e.f. 01.10.2025.
• The said procedure for compliance has become redundant in view of amendment made in section 34(2) by the Finance Act, 2025 mandating reversal of input tax credit.

(Source: Circular No. 253/10/2025-GST dated 01.10.2025)

Provisional sanction of Refund claims

• Based on recommendations of 56th GST Council meeting held on 03.09.2025, CBIC has issued instructions for provisional sanction of refund claims on the basis of identification and evaluation of risk by the system.
• Board has issued the following instructions with respect to processing of refund claims, filed with the proper officer, on account of zero rated supply of goods or services or both:

• The refund application, consequent to its filing, shall continue to be processed as per present guidelines till the issuance of FORM GST RFD-02 or FORM GST RFD-03, as the case may be.
• Categorization of refund applications as “low-risk” on the basis of risk score provided by the system shall be taken into account and 90% of the refund amount claimed shall be sanctioned on provisional basis in such cases.
• Once an acknowledgment has been issued in FORM GST RFD-02, scrutiny is not required to be done for low risk refund applications for sanctioning of refund on provisional basis unless the said refund application is covered under the first proviso to rule 91(2) of the CGST Rules, 2017, whereby the officer, for reasons to be recorded in writing, may proceed with the examination of the application as per Rule 92, instead of grant of refund on provisional basis.
• For refund applications, which are not categorised as “low-risk” by the system, refund shall not be sanctioned on provisional basis and in such cases, the proper officer shall proceed with detailed scrutiny of refund application and further action as per the extant guidelines.
• The statutory conditions prescribed for grant of provisional refund, including non-eligibility of the notified category of registered persons under section 54(6) vide Notification No. 14/2025-Central Tax dated 17.09.2025, the requirement under Rule 91(1) regarding non-prosecution, shall continue to be applicable in such cases.
• Provisional refund may not be sanctioned where, in respect of any previous refund application filed by the claimant, the issue involved is pending in an appellate forum, or where a show cause notice is issued or where an order has been passed but matter has not attained finality.
• If, on detailed examination, it appears to the proper officer that the refund amount sanctioned provisionally is more than the refund amount finally found admissible, in such case, the proper officer shall issue a show cause notice to the applicant, in FORM GST RFD-08, under section 54 of the CGST Act, read with section 73 or 74 or 74A of the CGST Act, 2017.
• The provisions related to risk-based sanction of provisional refund shall be applicable for all refund applications filed on or after 01.10.2025.
• The amendment in the Act is effected, in case of refund applications filed on account of IDS, on or after 01.10.2025, 90% of the refund amount so claimed may be sanctioned on provisional basis in similar manner as is being sanctioned provisionally for refund claims filed on account of zero-rated supplies.
• The statutory conditions prescribed for grant of provisional refund in case of zero rated supplies shall equally apply in these cases.

[Source: Instruction No.  06/2025-GST dated 03.10.2025

issued by  CBIC (GST Policy Wing)]