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published on 31st October 2025 I reading time approx. 12 minutes

IDT Developments and Associated Proceedures

1. Highlights of the 56 Goods and Services Tax ('GST’) Council Meeting:

The 56 Meeting of the GST Council was held on 3 September 2025 in New Delhi and during the meeting the following key amendments were recommended in the Central Goods and Services Tax Act, 2017 (CGST Act, 2017):

Amendment in GST slab rates as well as exemptions:

Effective from 22 September 2025, the new rate slabs will only be 5% and 18% and the slabs of 12% and 28% will be abolished.
An additional 40 per cent slab has been introduced for specific luxury or sin goods. It is to be noted that, for tobacco and related products, the existing 28 per cent and applicable cess structure continues until the compensation liabilities (loans, etc.) are settled. Items previously taxed at 28 per cent (appliances, electronics, small vehicles, auto parts, etc.) are moved to 18 per cent.
The household items such as soaps, shampoos, toothpastes, coffee, ghee, etc. are either moved to the 5 per cent slab or into the exempt category.
For unsold and packaged stocks, a window has been allowed up to 31 December 2025 for re labelling, stickering or online printing of new MRP (with revised GST).
Increase in GST Rate to 18 per cent, from 12 per cent for certain construction services, multimodal transport services involving air and non-air transport, goods transport in containers by rail (non-Indian Railways), etc.
Life and health insurance policies have been made fully exempt from GST.
33 life-saving drugs for cancer, rare diseases are exempted and medical apparatus will are now either exempt or taxed at 5 per cent.

GST Appellate Tribunal (GSTAT) to be made operational

The Goods and Services Tax Appellate Tribunal (GSTAT) will be made operational, wherein appeals shall be started to be accepted by end of September 2025, hearings shall begin by December 2025. Any backlog appeals must be filed by 30 June 2026 in phased manner.

The GST Appellate Tribunal’s Principal Bench will also act as the National Appellate Authority for Advance Ruling.

Reforms in Input Tax Credit and refund processing norms:

A move to risk based provisional refunds: Exporters and Inverted-duty businesses can get up to 90 per cent of refund on a provisional basis from 1 October 2025.
Removal of the minimum threshold under Section 54(14) for refunds on exports with payment of tax — beneficial especially for small exporters via courier/postal modes.
Clarifications have been provided on post sale discounts and reversal of ITC in certain cases.

Simplification in the GST registration process for small suppliers:

A simplified registration approval to be automated within 3 working days for eligible applicants having systematically low risk including small sellers using e-commerce for business.

2. The Apex Court clarifies the scope of parallel proceedings under GST regulations [Armour Security (India) Ltd. (2025) 33 Centax 222 (SC)]

In this case, the taxpayer had received a show cause notice from State GST authorities alleging under declaration of tax paid and excess claim of ITC and subsequently received search and seizer proceeding under Section 67(2) of the CGST Act, 2017 for the same period from the Central GST authorities. The taxpayer had filed a writ petition in the Delhi High court arguing that Section 6(2)(b) of the CGST Act, 2017 has been violated.

The said writ petition was dismissed by the Hon’ble Delhi Hight Court against which a SLP was admitted in the Hon’ble Supreme Court, and it was held by the Apex Court that action taken solely for inquiry or evidence gathering such as summons, search or seizures does not constitute as ‘initiation of any proceeding’ by the Central GST authorities. The formal commencement only starts once adjudication though issuance of SCN is initiated. However, the apex court has also given guidelines regarding inquiries/investigations by the GST authorities so as to avoid duplication of issuance of SCN by both the authorities at once i.e. State as well as Central GST authorities.

3. Secondment of employees is non-taxable supply under Schedule III- The Hon’ble Karnataka Hight Cout in case of Alstom Transport India Limited [TS-647-HC(KAR)2025-GST]

In this case, the taxpayer had seconded expatriate employees from foreign group entities but they operated under full administrative and functional control of the petitioner. These employees were on the payroll of the petitioner whereas the social security and related benefits were provided by foreign group companies and were further recovered from the petitioner. The petitioner discharged voluntary RCM liability on the amount of recovery of social security discharge from Nov 2020. A show cause notice was issued demanding the GST on the entire salary amount paid to such employees treating it as a manpower supply.

The Hon’ble Karnataka HC held that the judgement given by Hon’ble Supreme Court in Northern Operating Systems should not be blanketly applied and the importance should be given to the facts of each case and held that as functionally and administratively the employees are under the control of the petitioner, the salary portion is covered under the Schedule III of the CGST Act, 2017 and no GST is payable under RCM basis on such salary portion.

Important Notifications issued during the quarter

1. Amendment in procedure for distribution of input tax credit under reverse charge mechanism by Input Service Distributor (ISD) to distinct persons:

Sub Rule 1(A) of Rule 39 of the CGST Rules, 2017, which provides the procedure for distribution of input tax credit under reverse charge mechanism by Input Service Distributor to distinct persons has been amended to include input tax credit under reverse charge for which integrated tax (IGST) has been paid, and clarification has been provided that Section 9 pertains to Central Goods and Services Tax Act, 2017. These changes have been made effective 1 April 2025.

2. Amendment pertaining to grant of provisional refund:

Effective from 1 October 2025, a substitution has been made in sub-rule (2) of Rule 91 of the CGST Rules, 2017 to clarify that the provisional refund shall be granted basis evaluation of risk by system within seven days from the date of the acknowledgement of the refund, and where such provisional refund is not provided the reasons shall be recorded in writing, and the proper officer shall proceed with the final order sanctioning refund. Further, the order issued in FORM GST RFD-04 shall not be required to be revalidated by the proper officer.

3. Amendment in procedure pertaining to appeal to the Appellate Tribunal:

Rule 110 of the CGST Rules has been amended to specify that the acknowledgment indicating appeal number against the order uploaded on the common portal, whether self-certified or otherwise shall be issued in ‘Part B’ of FORM GST APL-02A and the date of filing of appeal shall be determined based on the date of uploading the order copy online.

Further, Rule 110A has been inserted to implement the procedure for appeals to be heard by a single member bench where the appeal does not involve a question of law for a tax or input tax credit, including any fine, fee or penalty cumulatively amounting to INR 50 lakhs as specified in sub-section 8 of Section 109 of the CGST Act, 2017. Where on scrutiny the appeal is found to involve a question of law, the same may be sent back to the President or Vice-President of the Tribunal for reconsideration. Further, where similar issues involving the same taxable person and State were already heard by a division bench, the new appeal must also be heard by a division bench only.

In Sub-rule (1) of Rule 111 of the CGST Rules, a clause has been inserted post the words provisional acknowledgement, "in Part A of FORM GST APL-02A". further, proviso to sub-rule (1) and sub rule (2) are omitted. In Sub-rule (4),"FORM GST APL-02" to be substituted with: “Part B of FORM GST APL-02A” — wherever it appears. Thereafter, in the second proviso, the words "self-certified copy" has been replaced with "self-attested copy".

Sub-Rule 2 of the Rule 113 has been substituted and it has been clarified that the Appellate Tribunal shall, along with its order under sub-section (1) of Section 113 of CGST Act, 2017, issue, or cause to be issued, a summary of the order in FORM GST APL-04A clearly indicating the final amount of demand confirmed by the Appellate Tribunal.

4. Changes in Annual Return / Reconciliation Tables (GSTR 9 / GSTR 9C related changes):

The amendments in Form GSTR-9 are proposed which are pertaining to reporting transactions for the financial year declared in returns of the next financial year, clarifications on how ITC (Input Tax Credit) availed, reversed, and reclaimed should be declared, etc.

5. Other Miscellaneous Notifications:

Vide Notification No. 13/2025 – Central Tax dated 17 September 2025, CBIC has notified amendments in the Central Goods and Services Tax Rules, 2017, pursuant to the 56th GST Council meeting, namely effective from 22 September 2025.
Vide Notification No. 14/2025 – Central Tax dated 17 September 2025, the CBIC has notified that registered persons who are not entitled for refund on provisional basis under CGST Act, 2017 which includes registered taxpayer who has not undergone Aadhaar authentication or are persons engaged in the supply of specified goods mentioned in the said notification.
Vide Notification No. 15/2025 – Central Tax dated 17 September 2025, CBIC has notified that registered persons having aggregate turnover in any financial year up to two crore rupees are exempted from filing annual return for the financial year 2024-25.
Vide Notification No. 16/2025 – Central Tax dated 17 September 2025, CBIC has notified 1 October 2025 as the date from which clauses (ii) and (iii) of Section121, Sections 122 to 124 and Sections 126 to 134 of the Finance Act, 2025 shall come into force.
Vide Notification No. 9/2025 – Central Tax (Rate) and 10/2025 – Central Tax (Rate) each dated 17 September 2025, the erstwhile rate notification for supply of goods issued in 2017 as amended from time to time are superseded in line with recommendations of the 56 GST Council meeting. Similarly, vide Notification No. 15/2025 – Central Tax (Rate) and 10/2025 – Central Tax (Rate) each dated 17 September 2025, the erstwhile rate notification for supply of services issued in 2017 as amended from time to time are superseded in line with recommendations of the 56 GST Council meeting. Other similar notifications are also issued to make suitable amendment in GST rates in line with recommendations of 56 GST Council meeting.

Important GST Circulars and Instructions issued during the quarter

Vide Circular No. 251/08/2025-GST dated 12 September 2025, the CBIC has clarified GST implications on post sale discounts under various circumstances in order to eliminate the ambiguity and unwarranted tax litigation faced by the taxpayer which includes situation such as trade discounts, specific promotional/marketing activities undertaken by dealer, etc.

Vide Circular No. 252/09/2025-GST dated 23 September 2025, the CBIC has clarified that a Document Identification Number (DIN) is not mandatory for communications via the GST portal (with RFN) and now eOffice (with Issue Number). A new portal https://verifydocument.cbic.gov.in allows verification of eOffice Issue Numbers. However, the DIN is still mandatory for all other communications not sent via GST portal or eOffice public option.

Customs and Foreign Trade Policy related developments

1. Issuance of first tranche of Tariff Concessions under India-EFTA (Iceland, Norway and Switzerland):

Vide Notifications 41, 42 and 43 - Customs dated 30 September 2025, the CBIC has issued the first tranche of tariff concessions in case of goods imported from European countries of Iceland, Norway and Switzerland. The concession includes various exemptions from Basic Customs Duty, Health Cess and Agriculture Infrastructure and Development Cess on various goods. The Notifications can be referred to understand the tariff concessions in detail.

2. Introduction of the Customs (Finalization of Provisional Assessment) Regulations, 2025:

Vide Notification 55/2025 - Customs (NT) dated 12 September 2025, the Customs (Finalization of Provisional Assessment) Regulations, 2025 have been introduced which supersede the earlier 2018 regulations and provide time limits for importers/exporters to furnish documents or information including the prescription of customs enquiry to be completed within 14 months of the provisional assessment. The finalization of customs assessment should normally occur within three months of receiving required material, extendable up to a specified period of two years. The regulation provides for adjustment of any provisional payments made by importers/exporters against the final duty liability. The CBIC has also issued Circular No. 22/2025- Customs dated 12 September 2025 in this regard to clarify the implementation of such regulations.

3. Auto-approval of Incentive Bank Account and IFSC Code Registration requests across all customs locations:

Vide Circular No 24/2025-Customs dated 7 October 2025, if an Importer-Exporter Code (IEC) has already got a given bank account + IFSC code approved at any one customs location, then that same combination can be automatically approved by the system for other customs locations without manual intervention for the purpose of claiming IGST Refund as well as duty drawback. The existing mode of submitting the request (via ICEGATE / portal etc.) remains unchanged. In cases where auto-approval is applicable, the request will not be routed to the port officer for manual approval. The system directly grants approval.

4. Communication with taxpayers through eOffice Application:

Vide Circular No. 23/2025-Customs dated 23 September 2025, the CBIC has clarified that a Document Identification Number (DIN) is not mandatory for communications sent to taxpayers via eOffice application (with Issue Number). A new portal https://verifydocument.cbic.gov.in allows verification of eOffice Issue Numbers. However, the DIN is still mandatory for all other communications not sent via CBIC’s eOffice application.

5. Instructions under Customs:

Vide Instruction No. 21/2025-Customs dated 2 July 2025, it has been instructed by DGFT that all importers importing plastic raw material are required to be registered on the Centralized EPR Plastic Portal as per Section 6 of the EPR Guidelines.

Vide Instruction No. 23/2025-Customs dated 11 July 2025, it has been notified by DGFT that the mandatory adherence requirement of input steel for imports of steel products with bill of lading having shipped on board on or before 15 July 2025 stand exempted. Further, the mandatory adherence requirement of input steel for the final products supplied by Integrated Steel plants (ISPs) shall be exempted after verification of such licenses by BIS. Such ISPs may communicate their documentation along with BIS licenses to Ministry of Steel via email.

Vide Instruction No. 24/2025-Customs dated 22 July 2025, it has been informed that effective from 01 June 2025, the Customs Authority of Mauritius has started issuing electronic certificates of origin (e-CoOs) under the India-Mauritius CECPA, which shall be a valid document for preferential tariff treatment, provided it is authorised and its genuineness is verified. Further, it is to be uploaded on the e-Sanchit portal by the Importer/ Customs Broker for availing the preferential tariff treatment.

Vide Instruction No. 26/2025-Customs dated 14 August 2025, guidelines have been provided for handling exports of items suspected to fall under the SCOMET list. Customs officers are directed to refer to the CBIC’s online repository of SCOMET clarifications and, if needed, escalate unresolved cases to the Customs-III Section with full technical details. Further, the requirement of the Chartered Engineer certificate is done away with.

Vide Instruction No. 27/2025-Customs dated 26 August 2025, Customs officers are required to verify the validity of BIS registration on the BIS-CRS portal before clearing imported goods. It is also clarified that the above procedure must not be limited only to the cases of imports of CCTVs but be followed in respect of import of all items requiring BIS registration under the CRO.

6. Miscellaneous updates under Foreign Trade Policy and SEZ:

A. Extension of RoDTEP Scheme and filing of Annual RoDTEP returns:

The DGFT vide Notification 35/2025 dated 30 September 2025 has extended the scheme of Remission of Duties and Taxes on Exported Products (RoDTEP) beyond 30 September 2025 until 31 March 2026 for exports made from Domestic Tariff Area units, Advance Authorization holders, Special Economic Zone units and Export Oriented Units (EOUs). The existing RoDTEP rates will continue.

B. Electronic filing and Issuance of Preferential Certificate of Origin (CoO) under India-EFTA TEPA with effect from 1 October 2025:

Vide Trade Notice No. 13/2025-2026 dated 30 September 2025, it was clarified that Preferential Certificates of Origin for exports to Iceland, Liechtenstein, Norway and Switzerland under the above said agreement will be rolled out on Trade Connect ePlatform (www.trade.gov.in) which serves as the unified digital platform for application and issuance of all electronic Certificates of Origin (eCOO) for Indian exports. The detailed process is explained in the trade notice.
Vide Notification No. 31/2025-26 dated 23 September 2025, the DGFT has notified the revised SCOMET List under Appendix-3 of Schedule III (Export Policy), ITC (HS) 2022-reg, wherein the revised Appendix-3 (List of SCOMET items) has been uploaded on the DGFT website under the heading “Regulatory Updates”> “Import, Export, and SCOMET Policy” allowing a transition period of 30 days from the issue of notification.
Vide Notification No. 28/2025-26 dated 28 August 2025, the DGFT has amended para 2.03 of the FTP 2023 enabling provisions of imports of inputs by Advanced Authorisation holders, EOUs and SEZs that are subjected to mandatory quality control orders by the Department of Chemicals and Petrochemicals, raising the export obligation period from existing 6 months to 18 months, as notified in para 4.4 of the Handbook of Procedures.
Vide Notification No. 24/2025-26 dated 11 August 2025, the DGFT has prohibited the import of certain goods including bleached and unbleached woven fabrics of jute or other textile (HS code 5310 90), twine, cordage, rope, etc. of jute or otherwise, cables (HS codes 5608 90 and 5607 90), sacks and bags of jute (HS code 6305 10) from Bangladesh to India via land ports. Only imports via Nhava Sheva seaport are allowed. Other conditions of Notification No. 21/2025 dated 27 June 2025 remain in force. This notification is issued in furtherance to Instruction No. 20/2025-Customs dated 1 July 2025 issued in this regard.
Vide Public Notice No. 22/2025 dated 9 September 2025, the Handbook of Procedures has been amended to include an additional paragraph for the purpose of ease of doing business by providing correction facility in the online system for correction in unit measurement, ITC HS code of import items, correction in valuation of import items, etc.

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