Important GST changes and amendments made in 2025 which will impact your taxation in 2026 – The Economic Times

Clipped from: https://economictimes.indiatimes.com/wealth/tax/important-gst-changes-and-amendments-made-in-2025-which-will-impact-your-taxation-in-2026/articleshow/126272895.cms

ET OnlineImportant GST changes and amendments made in 2025 (AI generated representative image)

2025 has been a year filled with numerous changes related to goods and services tax (GST), including some significant court rulings and GSTN advisories that have transformed how professionals conduct their business.

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Brief overview of the updates in the GST landscape in 2025

CA Jitendra Patel – Partner, Indirect Taxes, N. A. Shah Associates LLP, explains some of the major GST changes and amendments:

1. In September 2025, there was a thorough GST rates rationalisation, commonly referred to as GST 2.0. The aim was to boost the economy, reduce litigation, simplify compliance and revenue neutrality, and this has been achieved.
2. Abolition of compensation cess from most items except for a few sin goods like tobacco and cigarettes which has resulted in reduction of prices for various items like motor cars etc.
3. The launch of GST Appellate Tribunal was a significant step towards simple and accessible dispute resolution. It will provide a uniform, transparent, and reliable platform for the resolution of disputes. It will reduce ambiguity, bring uniformity across the country, and ensure that both large and small taxpayers do not have to wait long for justice.
4. Retrospective amendment in the definition of blocked credit to counter the Supreme Court ruling regarding M/s. Safari Retreats Private Limited, which allowed for a potential of claiming ITC on construction costs to be offset against the rental / leasing business of real estate players. This could negatively impact the real estate sector involved in renting out spaces.
5. In adverse adjudication orders, only levying penalty. There was no requirement of pre-deposits for filing appeal with Appellate Authorities. This has been changed and a deposit of 10 % penalty before filing appeal has been made mandatory. This will result in blockage of working capital for business.
6. Eliminating the need to have the discount linked and preapproved before a supply for GST adjustments via a credit note. This will ease the way of doing business for the trade.
7. There has been a proposal to insert a new section for enabling track and trace mechanism for specified evasion-prone goods as well as persons or class of persons who are in possession or deal with such goods. This is a very positive and stern step to check GST evasion.
8. In order to ensure proper distribution of revenue to respective states, it has been made mandatory to comply with distribution under ISD for common expenses incurred at a centralised location on behalf of all other registrations in another state.

Landmark Judgements in 2025:

Patel explains:

1. Indian Medical Association vs. Union of India & Others (Kerala High court)

In a landmark judgment, a division Bench of Kerala High Court affirmed the common law principle that an entity cannot supply goods or services to itself. In the case of a mutual association (like the IMA, a club, or a Resident Welfare Association), the members are collectively the contributors to the common fund and the beneficiaries, meaning there is no duality of a supplier and recipient required for a “supply” under GST law. Hence GST will not be applicable on contributions from members.

Supreme Court of India has admitted an SLP against the said order, hence final verdict from the Supreme Court is awaited to settle the law definitively across India

2. Shrinivasa Realcon Private Ltd. Vs. Deputy Commissioner Anti-Evasion Branch, CGST & Central Excise Nagpur & Ors (Bombay HC)

In a ruling having substantial impact on the real estate industry – The Bombay High Court, Nagpur Bench (‘High Court’), has held that no GST is payable under Reverse charge on services supplied by way of Transfer of Development Rights (‘TDR’) or Floor Space Index (‘FSI”) in a development agreement. However, Telangana High Court had a divergent view in the said matter.

3. Ajanta Pharma Limited (Gujarat High Court)

ITC distributed from an ISD Registration of the company can be claimed as a refund by the SEZ unit of the Company. ISD is only an office of the supplier and in such cases refund by the SEZ unit is permissible u/s 54(3), particularly when supplies are zero-rated and credit remains unutilized. This impacts all SEZ units where Input Tax Credit gets accumulated due to mandatory ISD registration from April 1, 2025.