RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

World Bank has recently upgraded World Bank’s forecast for Indian economy’s growth to 6.5% in FY 2026 from its earlier 6.3% projection in June, 2025. It also affirmed that India is expected to continue to be the world’s fastest growing major economy owing to growing consumption backed by Government’s reforms in Goods and Services Tax. Also, agricultural output and rural wage growth are better than expected. Other projections include- OECD 6.7% (6.3%), S & P Global 6.5%, ADB 6.5% and RBI 6.8% (6.5%). International Monetary Fund (IMF) has also raised India’s economic growth forecast for FY 2025-26 from 6.4% to 6.6% but has lowered the projection for FY 2026-27 to 6.2% owing to US tariffs.

Recently, Principal Secretary-2 to Prime Minister expressed that Indian economy was re-silent on structural reforms and sound macro policies and that GST and IBC reforms have improved ease of doing business. If can withstand external shocks amid global uncertainties.

Post GST 2.0 reforms, auto dealers are facing challenge of accumulated input tax credit of compensation cess. The apex trade body, FADA has moved to Supreme Court over loss of about Rs. 2500 crore of such compensation cess which lapsed on 22nd September 2025. The basic logic is that reforms should empower, and not erase what’s earned. GST Reforms 2.0 have yielded the desired results in terms of consumption and demand. They will also translate into numbers when we see October, 2025 revenue collection details.

CBIC has issued a clarification on requirement of separate GST registration for importers storing goods in warehouses in other states.

GSTN has issued advisories on Invoice Management System (IMS) relating to auto population of ITC in GSTR 3B and pending option for credit notes. GSTN has also enabled Form GSTR 9 and 9C (annual returns and reconciliation statement) for the FY 2024-25 and also issued FAQ’s for compliance and better understanding.

Extension of time limit for GSTR-3B

The time limit for furnishing the return in FORM GSTR-3B by the registered persons has been extended by as follows: 

(Source: Notification No. 17/2025-Central Tax dated 18.10.2025)

GSTN Advisory on GST Annual Returns

GSTN has advised that utility for filing Form GSTR-9 and GSTR-9C for FY 2024-25 (Annual Return and Reconciliation Statement) has been enabled on the GSTN portal w.e.f. 12th October, 2025. Accordingly,

• Assessees should ensure that all returns i.e., GSTR-1 and GSTR-3B for the FY 2024-25 are filed to enable filing of GSTR 9 and GSTR 9C.
• Taxpayers who were registered as normal (regular) under the GST regime can now submit their annual summary and reconcile figures between their tax returns and audited accounts.
• All eligible filers must complete the process by December 31, 2025.

(Source: GSTN Advisory dated 12.10.2025)

GST Registration for Importers / Warehouses

• CBIC has issued a clarification on requirement of separate GST registration for Importers storing goods in Warehouses in other States.
• It is clarified that businesses whose principal place is in one State must obtain separate GST registration in another State where goods are stored and supplied from a warehouse or cold storage, even if operated by a third party, because such storage constitutes a place of business.
• Movements require valid tax invoices and e-way bills, and transfers between establishments under the same PAN are treated as supplies between distinct persons with applicable CGST/SGST or IGST based on place of supply rules.
• Cold storage services shall be taxable at the location of the property.
• Registered persons are required to maintain records, file returns, and discharge tax liabilities in the State where the warehouse operates.
• The business entity must ensure that invoicing, documentation, and tax payment are aligned with the actual place of supply and registration status.

(Source: CBIC Circular F.No. CBIC-20016/75/2025-GST/1025 dated 25.09.2025

issued by GST Policy Wing)

Changes and FAQs on IMS

• GSTN has introduced ‘pending’ option for credit notes as a new facility and declaration of reversal amount in IMS on the GSTN portal.
• Accordingly, taxpayers are allowed to keep credit notes as 'Pending' for one tax period.
• The IMS functionality have also been enhanced providing a flexibility to the taxpayers to modify their ITC reversal on acceptance of such credit notes thereby resolving many business disputes.
• Following new changes have been made:

• Allowing pending action for the records mentioned above in Question-1
• Option to declare the ‘Amount of ITC to be reduced’ in IMS by the recipient taxpayers for the records for which the ITC was already reversed or not availed by the taxpayers such as CNs, upward amendment of CN or downward amendment of Invoice/DN.
• Option to provide a remark by the recipient taxpayers at the time of taking reject or pending action on the records.

• FAQs may be referred to at the portal.

(Source: GSTN Advisory dated 17.10.2025)