The President of India, exercising powers under Article 123 of the Constitution, has promulgated the Manipur Goods and Services Tax (Second Amendment) Ordinance, 2025 (No. 2 of 2025). The Ordinance aligns Manipur’s GST law with the amendments introduced in the Finance Act, 2025 (Sections 121–134), ensuring parity with the Central Goods and Services Tax (CGST) Act, 2017.
Key Highlights:
- The move comes following the 56th GST Council meeting, which recommended swift implementation of these amendments.
- Manipur is presently under President’s Rule, following a proclamation under Article 356 issued on February 13, 2025, allowing Parliament to exercise the powers of the State Legislature.
- With Parliament not in session, the President deemed it necessary to take immediate legislative action via ordinance.
Key Legislative Amendments
- Alignment with CGST and IGST Acts: References to sections 9 of the Manipur GST Act have been expanded to include Sections 3 and 4 of the Integrated Goods and Services Tax (IGST) Act, 2017, harmonizing tax levy provisions across jurisdictions.
- Definitions Updated (Section 2):
- Introduces the concept of “unique identification marking” (UIM) – a secure digital stamp or mark for traceability.
- Clarifies meanings of “local fund” and “municipal fund” to align with self-government institutions managing local taxes and civic duties.
- Omissions and Revisions in Tax Provisions (Sections 12 & 13): Certain sub-sections have been removed to streamline tax determination for supply of services and goods, enhancing legal clarity.
- Clarification on Input Tax Credit (Section 17): Retrospective clarification (effective July 1, 2017) ensures “plant and machinery” is to be interpreted jointly, overriding contrary judicial interpretations.
- Revisions to Credit Notes (Section 34): Input tax reduction by suppliers is disallowed unless recipients reverse corresponding input credits, ensuring consistency and preventing double benefits.
- Return Filing and Compliance Changes (Sections 38–39): Simplifies GST return mechanisms by replacing “auto-generated statement” with “statement,” expanding the scope for prescribed details to enhance compliance monitoring.
- Appeals and Penalty Provisions (Sections 107 & 112): Appeals against penalty-only orders will now require a pre-deposit of 10% of the penalty amount, reinforcing deterrence and procedural discipline.
- New Penalty for Non-Compliance with Tracking System (Section 122B): Failure to adhere to the “track and trace mechanism” will attract a penalty of ₹1 lakh or 10% of tax payable, whichever is higher.
- Introduction of Section 148A – Track and Trace Mechanism:
- Empowers the government to notify specific goods and entities for mandatory UIM-based tracking.
- Mandates maintenance of digital records and operational details of manufacturing machinery.
- Enables electronic access and real-time verification to curb evasion and counterfeit goods.
- Amendments to Schedule III (Deemed Non-Supplies):
- Includes supply of goods warehoused in SEZs or Free Trade Warehousing Zones to any person before export or to the Domestic Tariff Area (DTA) as non-taxable.
- References Special Economic Zone Act, 2005 for definitions.
- Refund Restriction Clause (Section 15): Prevents refund claims for taxes already collected before these amendments, even if such collection becomes non-taxable retrospectively.
Significance and Impact
The Ordinance represents a crucial step in synchronizing state-level GST laws with national reforms aimed at digitization, transparency, and traceability in trade. The introduction of a unique identification system for goods, penalties for non-compliance, and refined credit mechanisms underscore the government’s focus on strengthening tax administration and preventing fraud.
The changes also reinforce the federal coordination under the GST Council, ensuring uniform application across states despite Manipur being under central administration.
The Manipur GST (Second Amendment) Ordinance, 2025 can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/10/The-Manipur-Goods-and-Services-Tax-Second-Amendment-Ordinance-2025.pdf
