Stay informed with the most recent updates in Goods and Services Tax (GST) for May 2025. This comprehensive overview covers policy changes, compliance deadlines, enforcement actions, and significant judicial decisions impacting taxpayers across India.
Major GST Policy Updates
- CBIC’s Amendments to GST Refund and Appeal Rules
The Central Board of Indirect Taxes and Customs (CBIC) has introduced significant changes effective May 2025
- Invoice-Based Refunds: Taxpayers must now provide invoice-level details for refund claims.
- No Retroactive Refunds: Refunds for payments made before the new rules are no longer permissible.
- Appeal Withdrawals: Partial withdrawal of appeals is allowed, streamlining the dispute resolution process.
2. GSTN Advisories: Enhancements in GSTR-1/1A
The Goods and Services Tax Network (GSTN) has implemented the following changes from the May 2025 return period:
- Mandatory HSN Reporting: Table 12 of GSTR-1/1A now requires mandatory reporting of HSN codes— 4 digits for businesses with turnover up to ₹5 crore and 6 digits for those above. Manual entry is disabled; selection must be made from a dropdown list.
- Bifurcation of Table 12: Separate tabs for B2B and B2C supplies have been introduced to enhance clarity and reduce errors.
- Mandatory Document Details: Table 13, capturing document details like invoices and credit/debit notes, is now compulsory.
3. GSTR-3B Table 3.2 remains Editable
Responding to taxpayer feedback, the GSTN has deferred the plan to make Table 3.2 of GSTR-3B non-editable. Taxpayers can continue to manually adjust inter-state supply details to ensure accuracy.
Compliance Calendar: Key GST Deadlines for May 2025
Ensure timely compliance with the following deadlines:
- 10 May: GSTR-7 (TDS) and GSTR-8 (TCS) for April 2025
- 11 May: GSTR-1 for monthly filers.
- 20 May: GSTR-3B and GSTR-5A (OIDAR) for April 2025.
- 25 May: PMT-06 payment for QRMP taxpayers.
- 31 May: ITC-03 filing for taxpayers opting into the Composition Scheme for FY 2025-26.
Enforcement Actions and Legal Developments
1. Crackdown on Fake ITC Claims
The Directorate General of GST Intelligence (DGGI) in Chandigarh uncovered a ₹30.21 crore fake Input Tax Credit (ITC) scam involving multiple bogus firms in Ludhiana. The alleged mastermind has been arrested, highlighting the government’s commitment to combating tax evasion.
2. Kerala’s Operation Fuego Marino
Kerala’s GST department launched “Operation Fuego Marino” to tackle the distribution of spurious diesel. Over 400 officers conducted raids across 50 locations, targeting unauthorized coastal pumps and illegal yards.
3. Supreme Court’s Relief to Paytm’s First Games
The Supreme Court stayed a ₹5,712 crore GST notice against Paytm’s First Games, providing temporary relief and positively influencing investor sentiment.
Judicial Decisions Impacting GST
1. Use of ITC for Pre-Deposit in Appeals
The Supreme Court upheld the Gujarat High Court’s decision allowing taxpayers to use Input Tax Credit (ITC) for pre-deposit payments required when filing GST appeals. This ruling eases financial burdens and enhances liquidity for businesses.
2. GST on Club Services
The Kerala High Court reaffirmed the principle of mutuality, ruling that services provided by clubs to their members are not considered ‘supplies’ under GST, thereby not taxable.
GST Collections and Economic Indicators
The government released state-wise GST collections for May 2025, indicating a continued upward trend in gross revenues across most states. This reflects stronger enforcement and economic momentum.
GST Implications on Public Sector Projects
A dispute has arisen between the Urban Development Ministry and the Finance Ministry over GST demands related to NBCC’s Kidwai Nagar redevelopment project. The Finance Ministry seeks GST from NBCC’s escrow account, leading to inter-departmental disagreements.
Simplification of GST Registration for Small Businesses
The government has relaxed rules to boost GST registration among small businesses. These measures aim to simplify the registration process and encourage compliance among micro, small, and medium enterprises (MSMEs).
Conclusion: May 2025 has been a pivotal month for GST developments in India, marked by significant policy changes, enforcement actions, and judicial rulings. Taxpayers are advised to stay informed and ensure compliance with the latest regulations to avoid penalties and take advantage of new provisions.