Laws have to be reformed from time to time so that they become relevant, sensitive, and aligned with the dynamic needs of society, the economy, and technical developments. Under the fast-moving pace of an era, the static laws are likely to grow obsolete, less effective, or even counterproductive, prompting governments and regulatory agencies to increasingly review and reframe existing legal regimes. All these amendments contribute to addressing emerging challenges, overcoming legal loopholes, and bringing justice to contemporary environments.
Legal updates play a crucial role in informing businesses, professionals, and individuals about changes so that they can stay in compliance, reduce risks, and make smart decisions. Ranging from tax legislation to corporate governance, labor legislation, and data privacy, periodic legal updates add meaning and perspective. Legal updates also strengthen transparency and confidence in institutions, enabling justice and accountability.
In democratic countries, legislative changes occur periodically to reflect the dynamic interaction between law and public interest. They render legal systems inclusive and reflective of societal ideals, safeguarding rights and propelling innovation and development. In India, for example, periodic amendments to acts such as the Companies Act, 2013, Income Tax Act, 1961 and environmental laws reflect the government’s dedication to reform and renewal. Therefore, regular law reforms are not just administrative requirements, but also essential tools for effective governance and social advancement.
What is an Amendment?
An amendment is a formal addition or change to a law, statute, regulation, or legal instrument. It is the process of changing, revising, or adding to existing provisions to fit new requirements, correct errors, or respond to new situations not previously addressed. Amendments are needed to make legislation valid and useful in the long term. In legislative environments, amendments are traditionally brought by politicians or regulatory commissions and are bound by a prescriptive legal procedure, such as a vote for approval by an assembly or parliament. Once signed, the amendment is incorporated permanently into the source statute. Amendable scope is very wide and can range from simple textual editing to large changes that affect the intent or delivery of the law. For example, the Indian Constitution and the Companies Act of 2013 have been amended over the years to address social, economic, and legal developments. Amendments make it easier for the legal system to adapt.
Latest Changes in GST in 2025
Since May 2025, the GST regime in India has seen significant changes to enforce compliance, improve processes, and enhance governance in taxation. Coming into effect on April 1, 2025, these amendments will influence diverse business processes. They stand as a testimony to the vigorous will of the government to make the GST setup efficient, secure, and compliant. Therefore, businesses should keep abreast of changes well in advance and gear toward implementing them for a smooth operation and adherence to the amended provisions.
1. Compulsory Input Service Distributor (ISD) Registration
Companies with more than one GST registration under the same PAN (in different locations or states) now need to get ISD registration if they plan to distribute input tax credit (ITC) for common services like common rent, consultancy, or audit charges, as per the new rules. This is significant because previously, companies shifted ITC without formal ISD registration, leading to inconsistencies and potentially noncompliance. A company can now allocate only such credits via the ISD mechanism, so that ITC flow between branches or units is more transparent, auditable, and regulated.
2. New E-Invoice Reporting Requirements
The government has set a 30-day filing period for e-invoices for taxpayers with a greater Annual Aggregate Turnover (AATO) of over ₹10 crore to prevent misuse of delayed invoice filing and promote timely compliance. This means that if the invoice is issued on April 1, 2025, the issuer must inform the Invoice Registration Portal (IRP) within April 30, 2025. Failure to adhere to this date will result in rejection of the invoice by the IRP, rendering it inutilisable for GST purposes, restricting the claim for ITC by the buyer, and potentially subjecting the issuer to compliance penalties.
3. Tight E-Way Bill Regulations
The government has tightened the regulations governing e-way bills, which are necessary for the transportation of products over defined levels. With effect from April 2025, e-way bills can only be generated for documents less than 180 days old to avoid utilisation of stale invoices or consignment notes to explain incorrect transportation of goods. Also, any renewal of an e-way bill’s validity is restricted to 360 days from the date of initial creation. These changes aim to lower tax evasion, enhance product traceability, and ensure that logistics papers reflect current business activity.
4. Utilising Multi Factor Authentication (MFA)
In an effort to enhance cybersecurity, the GSTN portal is now making Multi-Factor Authentication (MFA) compulsory for all users. To gain entry into their GST accounts, citizens are required to provide two or more authentication factors. This move is significant to prevent unauthorised access, data exposure, and fraud filings. It also increases the confidence of the taxpayers in the digital platform through the assurance that their sensitive financial data is accessed securely.
5. GST Waiver Scheme (2025)
The government has launched a waiver scheme to offer tax concessions and settle pending issues for those taxpayers who are eligible. Those taxpayers who have cleared all GST dues by March 31, 2025, can apply to waive penalties or interest under Scheme SPL01 or SPL02, subject to the condition that they file their applications within three months of the start of the financial year. This program promotes voluntary compliance and allows companies to embark on the new fiscal year free from past litigation. Moreover, it aims at minimising litigation as well as maximising revenues.
6. Expiration Clause for Anti-Profiteering Applications
The anti-profiteering laws, intended to stop firms from holding onto excess gains due to GST rate cuts, have been amended. A sunset clause, which will become operational from April 1, 2025, will bar new cases under the anti-profiteering laws. The ongoing cases will still be dealt with by the GST Appellate Tribunal (GSTAT). As the GST structure evolves, the government will take steps to ease dispute settlement and move towards a more self-regulating price mechanism.
7. GST Rate Changes
a) Second-hand vehicles
The GST rate on the sale of second-hand vehicles has increased from 12% to 18%, reflecting a change in the tax base and aligning rates with the wider auto industry. The move is designed to raise tax revenue as well as achieve consistency in new and secondhand vehicle sales. It could affect used car dealers’ pricing strategy as well as market dynamics.
b) Hotel industry
The earlier system, wherein GST on hotel accommodation was based on the rate claimed (which was often higher than the actual transaction value), has been done away with. GST will be computed on the actual value charged, leading to greater transparency and complete input tax credit for hospitality businesses. This simplifies the billing mechanism and eliminates rate classification uncertainty.
8. Changes to GSTR-7 and GSTR-8 formats
The forms for GSTR-7 (return of TDS) and GSTR-8 (return of TCS) have been revised to require invoice-level information instead of aggregated numbers. This enhancement enhances granular reporting, ITC reconciliation, and data validation for tax officials. Taxpayers who are required to deduct or collect tax at the source are now required to maintain complete transactional records, which raises compliance obligations while reducing the risk of mismatch-related notifications.
9. New Requirements for Invoice Series
To promote uniformity and prevent duplication, all registered taxpayers must begin a fresh series of invoice numbering as of April 1, 2025. It is important in enhancing audit trails, facilitating ease of record keeping, and preventing errors in the completion of GST returns. The series must be unique, sequential, and may include alphanumeric characters where applicable, in addition to displaying clearly the fiscal year.
10. Corporate Director Biometric Authentication
In order to thwart bogus registrations and the existence of shell companies, the GST authorities have implemented a program for biometric authentication of company directors, specifically at the registration or other key compliance points. This procedure, conducted at official GST Suvidha Kendras, includes fingerprint or iris scan-based identification linked to Aadhaar. It reinforces the authenticity of entrepreneurs and dissuades impersonation or bogus claims of Input Tax Credit (ITC).
Conclusion
These changes to the GST for FY 2025-26 showcase the government’s continued commitment to increasing the tax system’s transparency, compliance, and operational effectiveness. These improvements, such as compulsory ISD registration, tighter e-invoice timing, and increased e-Way Bill enforcement, complement security protocols like multi-factor and biometric authentication in the quest to strengthen the effectiveness and reliability of the GST regime.
The government aims to counter tax evasion by strengthening compliance procedures and encouraging correct reporting, as well as easing legitimate taxpayers through simplified procedures. Moreover, tax rate changes for industries such as used cars and hospitality, as well as changes in the format of GSTR-7 and GSTR-8, reflect the government’s desire to make GST conform to industry needs and prevailing market practices.
The introduction of GST relief and the anti-profiteering sunset clause indicates the shift towards a more mature, equitable, and less disputed GST scenario. For companies, these reforms call for increased responsibility, better digital infrastructure, and consistent updates to in-house compliance systems. Being aware of and conforming to these changes will be crucial to smooth operations and sustained growth. In short, the GST updates for FY 2025-26 represent an important step forward towards an India with a stronger and more dynamic indirect taxation system.
Related Services
