GST Updates – May 2025 Digest

🛠️ 1. GSTN Compliance & Portal Enhancements

• HSN Reporting in GSTR‑1/1A (Phase‑III): Effective May 2025, taxpayers:
  • ≤ ₹5 Cr turnover: Must report 4-digit HSN
  • > ₹5 Cr turnover: Must report 6-digit HSN
  Table 12 split into B2B/B2C tabs. Table 13 now mandatory.
• Biometric Aadhaar Verification: Mandatory for all new GST registrations PAN India, through appointment-linked facilitation centers.
• Invoice-Level TDS & Refund Filing: Invoice-wise GSTR‑7 reporting and refund claims for exports, SEZ, and deemed exports now live. Refund invoices get locked until processed.
• Appeal Withdrawal (Section 128A): Auto-withdrawal allowed before acknowledgment. Screenshot proof needed with application.
• GSTR‑3B Table 3.2 Editing: Editable status continues. Non-editable status deferred for now.

📜 2. CBIC Notifications & Rule Amendments

• Central GST (2nd Amendment) Rules, 2025: Issued late March, updated in May. Includes:
  • Late fee clarifications
  • Co-insurance GST
  • Common adjudication officer guidelines
• Refund Rules Updated: Refunds not allowed for payments prior to new rules. Invoice-wise filing now via Form RFD‑1.
• Instruction No. 03/2025-GST: Details Aadhaar biometric process and use of REG‑03/REG‑04 for physical verification.

⚖️ 3. Judicial & Legal Developments

• Supreme Court Verdict – Appeal Pre-Deposit via ITC: On May 19, 2025, ITC from Electronic Credit Ledger allowed for the 10% GST appeal pre-deposit. Huge liquidity relief.
• Other HC updates: Include quashing of ECIRL blocking, procedural violations—see detailed AAR/HC cases in full update.

🚨 4. Changes Announced in May, Effective July 2025

• Return Time-Bar: GST returns will be time-barred 3 years from due date. No late filing after this unless notified.
• GSTR‑3B Non-Editable: Auto-drafted GSTR‑3B values non-editable from July 2025. Use new GSTR‑1A for corrections.

📌 Summary Table

💼 Action Points for Professionals

• Ensure HSN reporting is updated as per dropdown validation
• Guide clients through biometric Aadhaar registration process
• Adapt refund procedures to invoice-level submissions
• Prepare clients for July return filing restrictions
• Advise use of ITC ledger for upcoming appeals under Section 107

🏭 Industry-Specific GST Impact – May 2025

Here’s how key sectors have been affected by GST updates and market dynamics in May 2025:

🏗️ Real Estate

• 5% GST continues to apply on under-construction residential properties, whereas completed (ready-to-move) units are GST-exempt.
• Developers under the 12% regime for commercial properties continue to avail input tax credit (ITC).
• Despite projected growth from ₹584B (2024) to ₹845B (2030), no new GST incentives were announced for green or leased commercial infrastructure.

Implication: Buyers gain clarity; developers may push for future GST rate relief in upcoming Council meets.

🌐 E‑Commerce & Exports

• U.S. de minimis exemption (up to US$800) creates new scope for Indian B2C exporters as Chinese competitors lose duty exemptions.
• Exporters face EDPMS system complexities while handling low-value, high-volume shipments.
• GST TCS under Section 52 (1% for marketplaces) remains applicable for all e-commerce operators.

Implication: Boost for MSME exports; firms must ensure EDPMS compliance and refund readiness.

🚚 Logistics & Warehousing

• Warehousing stock across India expected to grow from 533 msf (2024) to 700–800 msf by 2030.
• GST revenue surge in May, linked to 25% import growth and 13.7% domestic activity, highlights logistics expansion.
• No GST rate changes, but increased compliance scrutiny expected for inter/intra-state movements.

Implication: Logistics firms should improve invoice matching and review IGST apportionments on warehouse transfers.

🚨 Fraud Alerts & Sectoral Risks

• ₹643 crore ITC fraud unearthed in Andhra; multiple fake firms used to claim credits.
• ₹26 crore scam exposed in Chhattisgarh iron scrap trade.
• ₹7.85 crore circular trading fraud involving a Chartered Accountant found in Delhi.
• CBIC urges use of Document Identification Numbers (DINs) to verify genuine GST summons and notices.

Implication: Businesses must rigorously validate their vendor networks and only respond to verified GST communications.

📌 Sector-Wise Action Summary