GST

GSTN Advisory applicable from October 2025

October 2, 2025
admin

Important Dates

  • Invoice-wise GSTR-7: September 2025 tax period (due 10th October 2025).
  • 3-Year Return Filing Restriction: Effective from October 2025 period.
  • IMS Changes: Effective October 2025 tax period onwards.

1. Invoice-wise Reporting in Form GSTR-7 (From September 2025)

  • Background:
    Notification No. 09/2025 – Central Tax (dated 11.02.2025) amended GSTR-7 to capture invoice-level details of TDS deducted.
  • Effective Date:
    From the September 2025 tax period (due date: 10th October 2025), deductors must report invoice-wise instead of only consolidated TDS data.
  • Implication for TDS Deductors:
    Earlier, deductors reported total taxable value and total TDS deducted. Now, each invoice on which TDS is deducted must be reported separately.

Who deducts TDS under GST (Form GSTR-7)?

  • Section 51 of CGST Act, 2017 makes certain persons responsible to deduct TDS under GST.
  • These are not based on nature of goods or services but on status of the deductor, such as:
    • Departments or establishments of Central/State Government
    • Local Authorities
    • Governmental agencies
    • Notified persons (e.g. Public Sector Undertakings, authorities set up under an Act, societies fully owned/controlled by Government, etc.)
    • Metal scrap buyer ( must get registered as a TDS deductor also along with normal GST registration )
    • TDS applicability, the contracted amount in a year exceeds Rs. 2.5 Lakh excluding GST and Cess.(Amount can be individual or consolidated)
    • In case of metal scrap dealing, both parties must be registered under GST,( B2B transaction only) and the buyer is liable to deduct GST TDS@2% (CGST1%, SGST1% or IGST 2% where applicable)
    • Deductor must deposit TDS within 10 days after the end of the month in which deduction is made in Govt account
    • TDS is deposited into the Govt Account and it reflects in the Electronic Cash Ledger of the deductee (supplier)
    • Invoice, date, amount and party-wise ( GST No) reporting is a must in GSTR 7
    • Suppose the seller of metal scrap is from Delhi and the buyer from U.P., both are registered under GST. the buyer wants delivery to be made in Delhi, as the location of the buyer and the place of supply are in different states. this TDS provision will not apply.
    • If the place of supply and the location of the recipient are in different states, then this TDS provision will not be applicable.
  • Example:
    Suppose Local authority. pays a contractor ₹5,00,000 under two separate invoices:
    • Invoice 1 – ₹3,00,000 (TDS @ 2% = ₹6,000)
    • Invoice 2 – ₹2,00,000 (TDS @ 2% = ₹4,000)
      In GSTR-7, both invoices (with numbers, dates, and taxable values) must be entered separately.

Role of Scrap Dealers

  • Scrap dealers are usually suppliers of goods (metal scrap) – not TDS deductors.
  • Scrap dealers themselves file GSTR-1 / 3B (not GSTR-7) to declare their outward supply.
  • 🔹 Invoice-wise Reporting Applicability
  • Yes, invoice-wise reporting in GSTR-7 is applicable – but only to the buyer who is liable to deduct TDS under GST, when the scrap seller and scrap buyer are registered under GST, transaction value between them individually or consolidated amount exceeds Rs 2.5lakh(excluding GST and Cess), then the buyer has to get registered as TDS deductor and deduct TDS under GST at the time of payment or crediting the supplier in books and deposit it till 10 th of next month in Govt account
  • TDS rate is 2%(1% CGST and 1%SGST) or 2% IGST.
  • The scrap dealer will simply see the TDS credit reflected in Electronic Cash Ledger (auto-populated once deductor files GSTR-7).
  • The place of supply and location of the recipient must be in the same state; if in different states, TDS on GST provision will not apply
  • Crux
  • Scrap dealers themselves do not file GSTR-7 → so invoice-wise reporting does not directly apply to them.
  • Buyers of scrap (if they are notified TDS deductors) must report invoice-wise TDS in GSTR-7 from Sep 2025 onwards.
  • Scrap dealers only need to ensure invoices are proper so that buyers can deduct & report TDS

2. Restriction on Filing GST Returns Beyond 3 Years (From October 2025)

  • Legal Basis:
    Finance Act 2023 introduced this amendment; implemented through Notification No. 28/2023-CT dated 31.07.2023.
  • Key Point:
    After 3 years from the original due date, taxpayers will not be able to file pending GST returns. This applies to GSTR-1, GSTR-1A, GSTR-3B, GSTR-4, GSTR-5, GSTR-6, GSTR-7, GSTR-8, GSTR-9/9C.
  • Impact from October 2025:
    • Any return whose due date was 3 years earlier or more will be blocked permanently.
    • Illustration:
      • GSTR-3B for September 2022 was due on 20th October 2022.
      • Last permissible filing date = 20th October 2025.
      • After this, filing will not be allowed.
  • Practical Advice:
    Taxpayers with backlog returns (before Sep 2022 for monthly/quarterly returns, or FY 2020-21 for GSTR-9/9C) must file before Oct 2025.

Illustration : For ease of reference and better clarity, the latest GST returns that will be barred from filing w.e.f 1st October 2025 are detailed in the table below:

GST FormsBarred Period (w.e.f. 1st November,2025)
GSTR-1/IFFSeptember-2022
GSTR-1QJuly-Sep 2022
GSTR-3B/MSeptember-2022
GSTR-3BQJuly-Sep 2022
GSTR-4FY 2021-22
GSTR-5September-2022
GSTR-6September-2022
GSTR-7September-2022
GSTR-8September-2022
GSTR-9/9CFY 2020-21

Hence, the taxpayers are once again advised to reconcile their records and file their GST Returns as soon as possible if not filed till now.

3. New IMS (Invoice Management System) Changes (From October 2025)

These changes are aimed at making reconciliation and ITC adjustments easier.

a) Pending Action for Specified Records

Taxpayers can now mark some documents as pending (for one tax period only), such as:

  • Credit Notes (CN) – upward amendments
  • Downward CN (if original CN rejected)
  • Downward amendment of invoice/debit note (only if already accepted and 3B filed)
  • ECO-document downward amendment

Example:
Supplier issues a credit note in September 2025, but recipient needs to verify before accepting. Recipient can mark it as pending until October return filing.

b) Declaring ITC Reduction Amount

  • Earlier: If ITC wrongly claimed, confusion existed whether reversal needed if ITC never availed.
  • Now: Portal allows declaring exact ITC availed and to be reversed, even partial reversal.

Example:
Invoice shows ITC of ₹10,000. Recipient availed only ₹6,000. Later, credit note issued.

  • Recipient only needs to reverse ₹6,000 (not full ₹10,000).
  • System allows entering exact figure.

c) Option to Save Remarks

  • When marking records as “Reject” or “Pending”, taxpayers can now add remarks.
  • These remarks will be visible in GSTR-2B and also to suppliers.

Example:
Recipient rejects invoice saying “Wrong GSTIN mentioned”.
Supplier sees the remark in Outward Supplies dashboard and corrects it.

GST Updates – Old vs New (Effective Sep–Oct 2025)

AreaEarlier System (Old)New System (Sep–Oct 2025 Onwards)Example for Clarity
GSTR-7 (TDS Reporting)Deductors reported total TDS for the period (consolidated, not invoice-wise).From Sep 2025 tax period, deductors must report invoice-wise details of TDS (invoice number, date, taxable value, amount deducted).XYZ Ltd. pays contractor ₹5,00,000 via 2 invoices: Invoice 1 (₹3,00,000, TDS ₹6,000), Invoice 2 (₹2,00,000, TDS ₹4,000). Now both invoices must be entered separately in GSTR-7.
Return Filing Time Limit (3 Years)Even after several years, pending returns could still be filed with late fees and interest.From Oct 2025 tax period, returns cannot be filed after 3 years from due date (applies to GSTR-1, 3B, 4, 5, 6, 7, 8, 9/9C).GSTR-3B of Sep 2022 (due 20 Oct 2022) must be filed before 20 Oct 2025. After that, portal will not allow filing.
IMS (Invoice Management System)Limited options – invoices/credit notes could only be accepted or rejected, with no facility for remarks or partial ITC reversal.From Oct 2025 tax period: 1) Pending Action allowed (for 1 tax period), 2) Declare ITC reduction (partial/full reversal permitted), 3) Remarks option (visible in GSTR-2B & supplier dashboard).Supplier issues CN of ₹10,000 ITC. Recipient availed only ₹6,000. Now recipient can reverse just ₹6,000 and add remark “Partial ITC availed, balance not claimed”.

Leave a Reply

Your email address will not be published. Required fields are marked *