Comprehensive Analysis of CGST (Third Amendment) Rules, 2025 – Key Reforms & Compliance Impacts

The CBIC vide Notification No. 13/2025–Central Tax, dated September 17, 2025, notifies the Central Goods and Services Tax (Third Amendment) Rules, 2025. Unless specified otherwise in the amendments, all provisions come into force on 22nd September 2025. Notably, certain amendments carry specific commencement dates (for example, some rules have retrospective effect from 1st April 2025 or prospective effect from 1st October 2025, as detailed below). The short title formalizes the name of this amendment set, and the commencement clause means businesses and authorities must apply these changes from the effective dates indicated (with immediate effect from 22.09.2025 for most rules, and special dates for others as mentioned). This ensures clarity on when each new rule or change becomes operational.

Impact: GST practitioners should note the effective dates for compliance. Changes without a special date apply from 22-Sept-2025, meaning systems and processes (returns, refunds, appeals, etc.) should incorporate the new rules from that date. Changes with retrospective effect (e.g., Rule 39 amendment from 01-Apr-2025) require reviewing past transactions of the current financial year for compliance, while future-dated changes (e.g., Rule 91 from 01-Oct-2025) allow preparatory adjustments. Understanding the commencement schedule is crucial for timely implementation and avoiding non-compliance with the new rules.

2. Rule 31A(2) Amendment – Value of Supply in Lottery, Betting, Gambling, Horse Racing

Interpretation: Rule 31A of the CGST Rules (dealing with valuation of certain actionable claims like lottery, betting, gambling, and horse racing) is amended in sub-rule (2) by substituting the figure “128” with “140”. In practical terms, this changes the taxable value multiplier used to compute the value of supply for these activities. Originally, the rule deemed the value of supply to be the prize or face value multiplied by 100/128 (which corresponded to a gross-up for a 28% GST rate). The amendment to “140” means the value of supply will now be taken as 100/140 of the gross amount, effectively increasing the portion of the price attributable to taxable value. This reflects a higher effective GST burden (consistent with a rate adjustment from 28% to 40%, as 100/140 corresponds to approximately 40% tax on gross). Legally, this tightening indicates that for lotteries, betting and similar supplies, the government has increased the base value for tax calculation, ensuring a greater tax outflow from the same gross proceeds.

Impact: This change is effective from 22.09.2025. Businesses in the lottery and gaming industry must recalibrate their pricing and accounting systems. A higher multiplier (140 instead of 128) means a higher taxable base and thus higher GST on the same transaction value. For example, if a lottery ticket is sold at a price that includes tax, under the new rule a larger fraction of that price is considered the net supply value, increasing the tax amount to 28% of (price*100/140) which equates to 40% on the price inclusive of tax. Compliance-wise, companies should update valuation formulas in their GST calculations immediately on the effective date. They should also anticipate increased tax liability on betting/gambling turnovers and may need to adjust product pricing or payout structures to maintain margins. Additionally, contracts or agreements referencing tax assumptions should be revisited to account for this change in valuation methodology.

3. Rule 39(1A) Amendment – ISD Distribution of ITC (Covering IGST Reverse Charge)

Interpretation: With retrospective effect from 1st April 2025, Rule 39(1A) of the CGST Rules (which governs the procedure for Input Service Distributors (ISD) to distribute input tax credit) is amended. After the words and figures “of section 9” (which refer to supplies attracting reverse charge under section 9 of CGST Act), the following text is inserted: “of the Central Goods and Services Tax Act, 2017 or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017”. In essence, this inclusion means that an ISD can now distribute credits of GST paid under reverse charge not only for intra-state supplies (CGST Act, section 9) but also for inter-state supplies or imports that fall under IGST Act section 5(3) or 5(4). Sections 5(3) and 5(4) of IGST Act enumerate cases where the recipient is liable to pay IGST on reverse charge, such as certain notified supplies or import of services. By amending Rule 39(1A) to explicitly cover these, the rule aligns the ISD mechanism with all reverse-charge scenarios under GST. Legally, it expands the scope of credit distribution via ISD to include IGST paid on procurements like import of goods/services or other notified interstate reverse charge supplies.

Impact: Back-dated to 01.04.2025, this amendment requires companies using ISD to revisit how they allocated ITC from April 2025 onward. ISDs (typically head-offices distributing credits to branches) can now legitimately distribute IGST credits that arose from reverse charge liabilities, which previously might have been ambiguous or not covered. This is beneficial for businesses because it ensures full utilization of IGST credits across the entity – for example, GST on ocean freight, import of services, or any supply under IGST reverse charge can be pooled by the head office and allocated to units. Compliance-wise, any ITC on such IGST RCM (reverse charge mechanism) paid between April and September 2025 that was not distributed due to earlier rule wording can now be retrospectively distributed via ISD in accordance with this change. Businesses should document such distributions clearly, and if necessary, file adjustments through amendments to past ISD returns (Form GSTR-6) to align with this expanded scope. This change essentially harmonizes ISD credit distribution with the legal provisions, preventing loss of credits and providing clarity to multi-location organizations.

4. Rule 91(2) Substitution – Time-bound Provisional Refund Process

Interpretation: With effect from 1st October 2025, Rule 91(2) of the CGST Rules (governing grant of provisional refunds to exporters and other refund applicants) is entirely substituted with a new provision. The new Rule 91(2) mandates that the proper officer shall issue an order in Form GST RFD-04 (the provisional refund sanction order) “within a period not exceeding seven days from the date of the acknowledgement” of the refund claim (Form GST RFD-02/RFD-01 acknowledgement). This issuance is to be done on the basis of system-identified risk parameters, meaning the GST system will flag refund claims for risk and the officer will act accordingly. Two provisos are attached:

• Discretion to Withhold: The officer may decide not to grant a provisional refund at all if certain risk criteria are met – but to do so, they must record reasons in writing and then proceed straight to final order under Rule 92 instead. This provides a safeguard allowing denial of the 90% provisional refund in cases of high suspicion (e.g. risky or fraudulent claims) with proper justification.
• No Revalidation Required: The second proviso clarifies that an RFD-04 order, once issued, need not be revalidated by the officer, even if the final refund sanction (under Rule 92) happens later. Formerly, if the provisional refund order lapsed due to time or process, revalidation was a procedural hurdle; this clause removes that requirement, simplifying the process.

In short, the rule now institutionalizes a fast-track refund for low-risk claims within 7 days, subject to an automated risk evaluation, and removes redundant administrative steps.

Impact: This amendment brings a significant compliance improvement for businesses, especially exporters and those with refund claims. By binding officers to a 7-day timeline for provisional refunds, genuine refund claims (like export ITC refunds) should see funds released more quickly, aiding cash flow. The mention of “identification and evaluation of risk by the system” suggests that taxpayers with a good compliance profile (e.g. no serious past discrepancies, high ratings in GST system) will benefit from automated provisional sanction up to 90% of the claim within a week. On the other hand, the first proviso signals that if the claim is flagged (for example, mismatch in returns, dubious taxpayer history), the officer can skip provisional refund – businesses in this situation will have to wait for the final order (which could take longer) and should be prepared to furnish additional proofs. The elimination of revalidation of Form RFD-04 reduces bureaucratic friction – once a provisional refund is granted, it remains valid until adjusted in final order, so businesses won’t need to chase officers for extending validity. In practice, refund processing will become more system-driven and time-bound, so companies should ensure their refund applications are accurate and complete at the time of filing (to avoid being flagged in risk analysis). Overall, this fosters trust and quicker relief for compliant taxpayers while focusing scrutiny on risky cases.

5. Rule 110 Amendments – Streamlined Appellate Tribunal Appeal Process

Interpretation: Rule 110 of the CGST Rules outlines the procedure for filing an appeal to the GST Appellate Tribunal. The Third Amendment introduces several changes to modernize this process (effective from 22.09.2025 unless stated otherwise):

• In sub-rule (1), after the phrase “filed electronically and provisional acknowledgement”, the rule now inserts “in Part A of Form GST APL-02A”. This indicates that when an appeal is filed, the provisional acknowledgment of its filing will be issued in Part A of a newly introduced Form GST APL-02A (replacing the earlier practice of Form GST APL-02). The omission of the earlier proviso in sub-rule (1) means any special condition or relaxation that was previously given (likely related to manual filing or delays) is now removed, implying the process is fully electronic and standardized.
• In sub-rule (2), the proviso is omitted as well. The removed proviso might have pertained to situations like condonation of delay or additional document requirements for the appeal to be admitted. Its deletion simplifies the rule – now sub-rule (2) likely uniformly prescribes the final acknowledgment or admission process without exceptions.
• In sub-rule (4), wherever the words “FORM GST APL-02” appeared (for issuance of final acknowledgment of appeal or any order of the tribunal on admission), they are substituted with “Part B of Form GST APL-02A”. This confirms that Form GST APL-02A is divided into Part A (provisional acknowledgment) and Part B (final acknowledgment). The final acknowledgment (Part B) would be issued once the appeal is verified and admitted by the Tribunal, or used to communicate any deficiencies/rejections, aligning with the new two-stage acknowledgment system.

Overall, these amendments collectively herald the introduction of Form GST APL-02A for appeals, replacing the older Form APL-02. The procedural streamlining (removal of provisos and redundant steps) suggests a move towards a fully electronic, two-stage appeal filing process in line with the operationalization of GST Tribunals.

Impact: For legal and finance professionals handling GST litigation, these changes are significant. From 22nd Sept 2025, any new appeal to the GST Appellate Tribunal must use the updated forms and process. Upon filing an appeal, practitioners will receive a Part A – Provisional Acknowledgment (with a provisional appeal number) immediately, which serves as proof of filing. The omission of earlier provisos likely means fewer conditions to fulfill at the time of filing; for instance, previously an appeal might not get an acknowledgment if certain documents (like certified copies of order) weren’t submitted within seven days – the removal could mean such requirements are handled differently now or at the final stage. Once the Tribunal processes the appeal, a Part B – Final Acknowledgment will follow, confirming either admission (with a permanent number) or detailing any rejection or necessary action. Compliance-wise, appellants should familiarize themselves with Form GST APL-02A (Parts A & B) and ensure appeals are filed electronically through the GST portal or Tribunal system that supports this form. The change to “self-attested copies” in Rule 111 (discussed below) complements this by trusting the appellant’s own attestation for documents. Ultimately, these amendments aim to reduce paperwork and delays in the appeals process – GST advisors should find the process more transparent and quicker, provided all information is correctly submitted. It will be crucial to adhere to any new guidelines for what needs to accompany an appeal (since the automatic provisional acknowledgment will issue upon electronic filing, one must later ensure the Tribunal receives any required certified documents or fees to secure the final acknowledgment).

6. Insertion of Rule 110A – Procedure for Appeals before a Single-Member Bench

Interpretation: A new Rule 110A is inserted after Rule 110 to lay down how certain appeals will be handled by a Single Member Bench of the GST Appellate Tribunal. This rule, effective 22.09.2025, establishes a mechanism for filtering and assigning cases to single-member benches where permissible under the law (Section 109 of the CGST Act). Key provisions include:

• Transfer of Eligible Appeals: Under sub-rule (1), the President of the Appellate Tribunal (or a Vice-President, if authorized for a State Bench) may, suo motu (on his own motion) or upon application by the parties, scrutinize an appeal and transfer it to a Single Member Bench of that State, provided the case does not involve any question of law. This means purely factual disputes or low-complexity cases (typically of smaller monetary value) can be handled by a single-member (which could be either a Judicial Member or a Technical Member sitting alone), thereby expediting the process. The President/Vice-President will examine the appeal’s subject matter during registration to decide this.
• Reverting if Legal Issue Arises: Sub-rule (2) stipulates that if a single-member bench, while hearing a transferred appeal, realizes a substantial question of law is involved, that single member must record reasons in writing and send the case back to the Tribunal President/Vice-President. In other words, any appeal that unexpectedly raises an interpretative or legal precedent issue cannot be decided by a lone member; it will be reallocated to a regular Division Bench (comprising two members). This safeguard preserves the quality and authority of decisions on legal questions by ensuring they are heard by a two-member bench (Judicial + Technical).
• Consistency Check (Avoiding Contradictory Rulings): Sub-rule (3) introduces a check during the initial scrutiny or reconsideration: if the same taxpayer (“same taxable person within a State”) and the same issue for a different period has already been decided or even heard by a Division Bench (a bench of two Members) in the Tribunal, then the new appeal must not go to a single member bench. Such cases must continue to be heard by a Division Bench. This prevents inconsistent outcomes and ensures that once a matter has been treated as significant enough (or complex enough) for two members, future similar disputes stay with a two-member bench for coherence. It essentially locks important issues to Division Benches even if monetary value is below the threshold, maintaining uniformity in rulings for the same issue.
• Monetary Limit Clarification (₹50 Lakh): The CGST Act Section 109(8) permits single-member benches for cases where the tax or credit involved does not exceed ₹50 lakh (except questions of law). Sub-rule (4) clarifies that this ₹50,00,000 limit is to be calculated cumulatively for the appeal in question. This means if an appeal involves multiple issues or multiple periods, one must add up all the tax, ITC, fine, fee, or penalty amounts in dispute across all issues/periods covered in that one appeal order. If the combined amount exceeds ₹50 lakh, the case is not eligible for single-member hearing. This prevents artificially splitting disputes or filing a single appeal covering many small amounts to bypass the threshold. Only genuinely small cases (in total impact) qualify for single bench disposal.

Impact: The introduction of Rule 110A operationalizes the functioning of the newly set up GST Appellate Tribunals by enabling single-member benches to hear cases, which can significantly speed up dispute resolution for less complex matters. For GST appellants, this means:

• Faster Disposal for Small Cases: If your appeal is below ₹50 lakh in total tax involved and doesn’t hinge on an unclear legal interpretation, it may be decided by a single member, likely resulting in quicker hearings and judgments (since scheduling a single member is easier than a full bench). This is beneficial for businesses contesting smaller demands or refund rejections – the process becomes more efficient and cost-effective.
• No Compromise on Precedential Issues: The safeguards ensure that if your case involves a principle of law or a recurring issue already considered by a division bench, it won’t be downgraded to a single bench. So, consistency and legal certainty are maintained – taxpayers will not face a situation where a single-member bench contradicts a larger bench on the same point. If an appellant believes their case involves an important legal question, they might prefer it be handled by a two-member bench; Rule 110A provides a mechanism for that (the member can escalate it back, or the President can choose not to assign it to single bench in the first place).
• Preparation for Scrutiny: Since the Tribunal leadership will scrutinize appeals at the outset for eligibility, appellants should draft clear grounds of appeal. If only factual issues are raised (like contesting calculation errors, or eligibility of a refund where law is settled), it’s likely to go to single bench. If there is a mix of issues, including interpretation, be prepared that the case could be re-routed to a division bench. This new process means practitioners must be vigilant – if a case is wrongly sent to single bench and one foresees a legal issue, they should raise it, or conversely, if a case qualifies for single bench but isn’t marked as such, one could apply for it to be heard by a single member to expedite the matter.

In summary, Rule 110A aims to balance efficiency (through single-member disposal of straightforward, low-value cases) with jurisprudential consistency (keeping important questions with multi-member benches). GST advisors should monitor Tribunal allocations under this rule and adjust their litigation strategy accordingly.

7. Rule 111 Amendments – Applications to Appellate Tribunal (Procedural Simplification)

Interpretation: Rule 111 deals with applications to the Appellate Tribunal (for matters like rectification or stay, distinct from appeals). The Third Amendment aligns Rule 111’s procedure with the changes made in Rule 110, effective 22.09.2025:

• In sub-rule (1), after “provisional acknowledgement”, the phrase “in Part A of Form GST APL-02A” is inserted, just as in Rule 110. This indicates that when a miscellaneous application (other than a normal appeal) is filed to the Tribunal, a provisional acknowledgment will be issued in Form GST APL-02A (Part A). The earlier proviso to sub-rule (1) is omitted, removing any special condition previously attached (possibly related to timelines or document submission for such applications). This streamlining mirrors the appeal process: an application gets an instant provisional number upon e-filing.
• In sub-rule (2), the proviso is omitted. Previously, this proviso might have allowed some relaxation (for instance, condoning delay in filing an application) or required a particular action for acknowledgment. Its removal standardizes the application process – all applications are treated uniformly for acknowledgment purposes under the new Form APL-02A system.
• In sub-rule (4), two changes are made: (i) any reference to “FORM GST APL-02” is now replaced with “Part B of FORM GST APL-02A”, meaning the final acknowledgment or order on the application will be in Part B of the new form (similar to appeals). (ii) In the second proviso of sub-rule (4), the wording “self-certified copy” is replaced by “self-attested copy”. This is a subtle but important change in documentation requirements: self-attested means the applicant (or authorized signatory) can attest copies of documents by signing them, instead of needing a certification by a gazetted officer or notary. It aligns with common legal practice where the onus is on the declarant to vouch for document authenticity, simplifying compliance.

Impact: These amendments further the digitization and simplification of Tribunal processes for taxpayers and practitioners:

• Unified Acknowledgment System: Now both appeals and applications use Form GST APL-02A Parts A & B for acknowledgment. Users will experience a uniform interface: file electronically and get a Part A acknowledgment (provisional) immediately for any matter filed, whether it’s an appeal against an order or an application for rectification/stay. This gives immediate confirmation of filing which is crucial for time-bound matters (e.g., if a stay application is filed, one can demonstrate it’s been submitted via the provisional acknowledgment).
• Simplified Document Submission: The shift from “self-certified” to “self-attested” copies reduces the burden of obtaining attestations from third parties. Now, an appellant or applicant can simply sign copies of the required documents (such as a copy of the appealed order, or any supporting documents) to certify their authenticity. This is not just semantic – it expedites filing because the taxpayer no longer needs to seek a certification stamp; their own signature suffices, carrying legal responsibility. It’s a welcome change for practitioners as it aligns GST appeals with standard judicial practices and avoids delays in collating papers.
• Omission of Provisos: The removal of provisos in sub-rules (1) and (2) signals that previous special cases or exceptions are removed, likely because the process has been overhauled. For example, if earlier a provisional acknowledgment was withheld pending physical submission of documents within 7 days, now the portal likely issues Part A immediately and Part B after verification. This means practitioners must be diligent: even though provisional acknowledgment is automatic, they must still ensure all required documents and full applications are in order for the final acknowledgment (Part B) to be issued. The onus is on the applicant to follow up and respond to any deficiency intimation by the Tribunal to get the application admitted.

In essence, Rule 111 now matches Rule 110 in approach – e-filing friendly and user-centric. GST professionals should update their checklists for Tribunal filings to use Form APL-02A and take advantage of the self-attestation allowance. It reduces procedural hurdles, thereby allowing focus on substantive issues in the appeal/application. The professional tone of documentation remains important, as self-attestation carries an implicit declaration of authenticity and any false attestation could invite penal consequences.

8. Rule 113(2) Substitution – Tribunal to Issue Summary of Order (Form GST APL-04A)

Interpretation: Rule 113 pertains to orders of appellate authorities and Tribunals. The amendment substitutes sub-rule (2) entirely with a new requirement: when the Appellate Tribunal passes an order under section 113(1) of the CGST Act (i.e. disposes of an appeal), it “shall, along with its order… issue, or cause to be issued, a summary of the order in Form GST APL-04A, clearly indicating the final amount of demand confirmed by the Appellate Tribunal.”. In plainer terms, whenever the GST Appellate Tribunal gives its judgment on a case, it must simultaneously prepare a summarized version of the outcome in a standardized Form APL-04A, highlighting the key result – especially the quantum of tax, interest or penalty upheld or modified by the Tribunal. This summary would include the essential elements of the decision (likely taxpayer details, appeal number, decision result, amounts confirmed or reduced, etc.) as a concise document separate from the detailed order.

Previously, appellate orders were issued in narrative form and communicated via a detailed order only. The introduction of Form GST APL-04A ensures a uniform format for summary of decisions, which can be quickly understood by taxpayers and tax officers for enforcement. The rule places the responsibility on the Tribunal either to issue this summary itself or to have it issued (perhaps by the registry) along with the main order. This change is effective 22.09.2025 and complements Section 113 of the Act by adding a procedural step for clarity.

Impact: The immediate effect is that every Tribunal order will be accompanied by a summary sheet (Form GST APL-04A) providing the crux of the decision, especially the final demand amount confirmed. For businesses and tax authorities, this has practical advantages:

• Clarity and Quick Reference: Often, Tribunal orders can be lengthy and cover multiple issues. The Form APL-04A will distill the outcome – for example, it will explicitly state how much tax, interest, or penalty is finally due from the taxpayer after the appeal, if any. This helps the taxpayer know their liability at a glance and helps authorities initiate recovery (if demand is confirmed) without ambiguity. It eliminates potential confusion in interpreting the operative part of the order, as the summary is authoritative on the demand figure.
• Administrative Efficiency: From a compliance perspective, having a summary means less risk of miscommunication. The GST portal or tax offices might use this Form APL-04A to update ledgers or records. Taxpayers should cross-verify that the summary matches the understanding of the order. If a Tribunal order provides relief (say, deletes a penalty), the summary form will clearly reflect “penalty – reduced to ₹0” or similar. This document could become the basis for downstream processes (like issuing refund of pre-deposits, or closing recovery proceedings), so it’s crucial. Businesses are advised to ensure they obtain a copy of Form APL-04A along with the detailed order when their case is decided.
• Standardization: For GST practitioners, Form APL-04A will create a standard format to communicate outcomes. It may list details such as whether the appeal was allowed or dismissed, the sections involved, and any directions if the matter is remanded. Being a prescribed form, it ensures that all Tribunals across India provide consistent information. Practitioners should familiarize themselves with this form’s layout. In the event of any discrepancy between the detailed order and the summary, one would likely rely on the detailed order, but such discrepancies are expected to be rare due to the phrasing “clearly indicating the final amount of demand confirmed.”

In summary, the Rule 113(2) change is a transparency and convenience measure. It does not alter taxpayers’ rights or liabilities by itself, but it greatly aids in communicating the outcome. Finance professionals should incorporate reviewing the APL-04A form as a standard step after any Tribunal judgment – to ensure what the department will treat as the payable amount is accurate. This form can also serve as a quick document to share with company management or auditors to evidence the result of litigation without them needing to parse a complex legal order.

9. Amendments to FORM GSTR-9 (Annual Return) – Reporting Enhancements from FY 2024-25 Onwards

Interpretation: The notification introduces extensive changes to FORM GSTR-9 (Annual Return) format and instructions, applying for Financial Year 2024-25 and onwards filings. The aim is to align the annual return with recent GST amendments (such as extended deadlines for ITC claims up to Nov 30 of next year, new ITC rules like 37A, etc.) and improve clarity in reporting. Key changes are as follows:

• ITC Availment Details (Table 6): In Part III of GSTR-9, under “Details of ITC availed during the financial year”, two new lines A1 and A2 are inserted:
  • A1 – ITC of preceding financial year availed in current FY: This captures Input Tax Credit that pertains to an earlier financial year but was claimed in the GSTR-3B of April to October of the current FY (filed up to 30th Nov). Essentially, any ITC of, say, FY 2024-25 that was missed and later availed in Apr–Oct 2025 returns will be separately disclosed here (and is already included in 6A, the total ITC). Notably, ITC reclaimed under Rule 37 (for payments made after 180 days) or Rule 37A (re-credit after supplier pays tax, a new provision) are excluded from A1, since those are reported elsewhere.
  • A2 – Net ITC of the financial year: This line represents current year ITC net of any prior-year credits. It is defined as “A – A1”, where A is total ITC availed (from 6A). So A2 effectively shows how much ITC was truly earned and availed within the same FY. This distinction helps tax officers see how much credit is attributable to invoices of that year versus brought in from previous year (which is important because ITC for a financial year now has a cutoff of 30th Nov of next year per Section 16(4) as amended).

Correspondingly, Table 6H (which lists “Other ITC availed…”), had an exclusion clause “(other than B above)” referring to 6B; this phrase is now omitted, since the new breakdown provides clarity on reclaimed ITC. Also, Table 6J (Difference in ITC) is redefined to account for A2: previously J = I – (A through whatever), now J is “Difference (I – A2 above)”. This means the difference is calculated after removing prior-year ITC, yielding a more accurate picture of discrepancies between available vs availed current-year ITC. Additionally, Table 6M (which was unused or for adjustments) is repurposed: now M is “ITC availed through ITC-01, ITC-02 and ITC-02A (other than GSTR-3B and TRAN forms)”. This ensures any ITC availed via transitional forms or during new registration (ITC-01 for new registrations, ITC-02 for transfer of business, ITC-02A for mergers) is distinctly reported, excluding normal returns and TRAN (legacy credit) forms. This granular breakup helps in audits to segregate regular ITC vs one-time credits.

• ITC Reversals Details (Table 7): Under “Details of ITC reversed and ineligible ITC”, two new sub-entries are added after 7A:
  • A1 – As per Rule 37A: This line captures ITC reversals done under Rule 37A, which likely refers to reversals for non-payment to supplier beyond 180 days followed by re-availment (Rule 37A is a newer rule permitting re-credit when supplier later pays the tax). This ensures any ITC that had to be reversed due to supplier default (and which might be reclaimed later) is transparently reported.
  • A2 – As per Rule 38: This is another specific category, presumably for reversals under Rule 38. (Rule 38 deals with Blocked credit or special credit reversal situations, perhaps concerning banking companies or some new provision introduced by 2025 – it may correspond to a new rule for re-availment of proportionate credit, etc.). By explicitly naming rules 37A and 38, the form segregates these regulated reversals from general reversals. Previously, Table 7 only had broad heads like 7A (as per Rule 37), 7B (Rule 39) etc., so adding 7A1 and 7A2 highlights the introduction of new types of ITC reversals that need separate disclosure.
• Other ITC related information (Table 8): Changes in Table 8 aim to improve reconciliation of ITC between GSTR-3B (claimed ITC) and GSTR-2A/2B (suppliers’ reported ITC).
  • Entry 8B is modified to explicitly read “ITC as per 6(B) above”. Table 6B of GSTR-9 is ITC as per GSTR-2A (auto-populated). This label change likely aligns 8B to directly pull that number, making comparison clearer.
  • In 8H, after the existing text “(as per 6(E) above)” (which is ITC available but not availed), the words “in the financial year” are inserted. This emphasizes that 8H (which is ITC available in GSTR-2A but not availed by the taxpayer) should be limited to credits of that financial year. It likely avoids confusion given the extended timelines – only ITC pertaining to that year, not availed in that same year, goes to 8H.
  • A new row 8H1 is introduced: “IGST Credit availed on import of goods in next financial year”. This specifically captures any IGST paid on imports (which appears in GSTR-2A for a year) but the credit was actually claimed in the next financial year’s returns (Apr–Oct, up to 30 Nov). Since import IGST is often a large figure, disclosing how much of it was claimed later (within the extended window) helps the department track adherence to the Section 16(4) cut-off. It complements the new Part V changes (for ITC availed next year).
  • 8I (Total ITC available vs availed difference) is redefined as “I: Difference [G – (H + H1)]”. That is, the mismatch between what suppliers reported vs what the taxpayer claimed now takes into account the import IGST claimed next year as well. G is total input available (from suppliers and imports), H + H1 is what was not claimed in that year (domestic not claimed + import not claimed), so G – (H+H1) effectively equals the ITC actually availed for that year including those claimed next year on imports. This refinement ensures the difference isn’t overstated by including credits that were intentionally deferred to next year under the law.
• Tax Paid Details (Table 9): Table 9, which shows taxes paid as declared in returns, is completely revamped to provide more insight. The new format breaks down tax paid into mode of payment and compares with tax payable, as shown below:

This layout is repeated for each tax head – Central Tax, State/UT Tax, Integrated Tax, Cess – and also rows for Interest, Late Fee, Penalty, Others. Essentially, for each category of liability, the annual return will show how much was the total payable (from the returns), how much of that was discharged via cash versus ITC, the sum paid, and whether there was any shortfall (or excess). The last column “2-8” in the template is the difference between payable and paid. This change is significant because previously GSTR-9 only captured total paid amount; now it explicitly reconciles if any tax was not paid (or paid in excess) during the year. It also segregates the method of payment, highlighting reliance on cash vs credit. This provides a clear compliance snapshot – for instance, if a taxpayer reported tax due but didn’t fully pay it, the difference column will flag that amount. It aids both taxpayers in self-auditing and authorities in detecting unpaid liabilities year-wise.

• Transactions of Subsequent Year (Part V): Perhaps the most crucial changes reflect the extended timelines (up to 30th Nov of next FY) granted by the Finance Act, 2025 for reporting amendments and ITC of a given year in the returns of the next year. In Part V of GSTR-9 (which reports additions or amendments related to the financial year made after year-end), rows 10-14 and their descriptions are substituted to a new format:
  • Row 10: “Supplies/tax declared through Invoices/Debit Notes/Amendments (+)” – This captures any outward supply (sales) disclosures pertaining to the reporting year which were omitted and later added in the returns of April–Oct of the next FY (filed by 30 Nov). It includes upward amendments or late-reported invoices/debit notes that increased taxable value or tax for that year, but were actually reported late.
  • Row 11: “Supplies/tax reduced through Amendments/Credit Notes (–)” – Conversely, any reductions in outward supply for the year (through credit notes or downward amendments) that were carried out in the Apr–Oct returns of the next year (by 30 Nov) are reported here. Together, Row 10 and 11 detail the net effect of post-year-end adjustments on sales for that year. Previously, GSTR-9 had similar rows but up to Oct 31 (old deadline) and they were numbered 10 & 11; now they explicitly align with the new November 30 cut-off and clarify the types of documents included (invoices, DN/CN, amendments).
  • Row 12: “ITC of the financial year reversed in the next financial year” – This reports any ITC pertaining to the year in question that was reversed in the GST returns of the next year (Apr–Oct, filed by 30 Nov). For example, if during Apr–Oct of next year the taxpayer realizes some FY24-25 credit was ineligible or had to be reversed (perhaps due to not paying supplier within 180 days or other reasons), and does so in next year’s GSTR-3B, that amount is declared here. The instructions clarify this is not part of Table 7 (current year reversals) and that one can use Table 4(B) of next year’s GSTR-3B to fetch these figures. This isolates late reversals beyond the financial year, improving transparency of compliance.
  • Row 13: “ITC of the financial year availed in the next financial year” – This corresponds to ITC for the year (say FY 2024-25) that was actually availed in the returns of Apr–Oct of the next year (FY 2025-26) up to 30 Nov. Essentially it’s the total late ITC which missed the year’s deadline but was taken within the extended window (this is the sum that was detailed as A1 in Table 6 of the next year’s return). By reporting it here, the annual return gives a full picture of ITC related to the year whether taken timely or late. (Prior to FY2024-25, taxpayers had the option not to fill these late-claim tables for FY20-21 to 23-24 due to frequent due date extensions; now it becomes a standard requirement going forward.)
  • Row 14: “Differential tax paid on account of declarations in 10 & 11 above” – After adjusting outputs in Rows 10 and 11, if additional GST was payable (or excess paid earlier) for that year, this row requires a breakdown of such differential tax paid in the next year. It includes a small table showing, for each tax head (CGST, SGST, IGST, Cess), the amount of tax that became payable due to the late amendments and how much was paid, with any difference. Ideally, the difference should be zero if the taxpayer properly discharged all such liability in the next year’s returns. This ensures that any late-uploaded invoices (row 10) or credit notes (row 11) which affected the tax for the year have been fully accounted for in terms of tax payment. It essentially reconciles the adjustments with the taxes actually paid subsequently, functioning as an important audit checkpoint.

Together, the new Part V makes GSTR-9 a comprehensive document capturing all adjustments made up to the extended statutory limit (30th Nov of following year), thereby synchronizing the annual return with Section 16(4) and amendment deadlines changes introduced in 2025.

• Instructions and Other Changes: The notification also updates the Instructions to GSTR-9 to reflect these changes and clarify reporting for FY 2024-25 onward. For example, the definition of terms (GSTIN, ITC, etc.) is standardized. Instruction paragraph 4 is updated to include FY 2024-25 in the exception for certain tables (since some comparative figures were optional for initial years). Paragraph 5’s table now includes references to FY 2024-25 in various places to ensure the new year’s data is considered in optional fields and comparisons. Crucially, a new detailed guidance is inserted (e.g., a new paragraph 2A or 5 in instructions) explaining how to report ITC that was availed and then reversed and then reclaimed, depending on whether the reversal was under rule 37/37A or not. For instance, the instructions now say: if ITC of a previous year was claimed and reversed under rule 37/37A and reclaimed in the current year, it should not be reported in 6A1 but rather in 6H (reclaims); whereas if ITC was reversed for other reasons and reclaimed, it should be reported in 6A1. These clarifications are aimed at preventing double counting or omission in the new A1/A2 and related tables. Additionally, the instructions for Table 6B are tweaked to guide that from FY 2024-25 onwards, in cases of ITC availed, reversed, and reclaimed: the first-time availed goes to 6B, the reversal goes to Table 7, and the reclaimed credit goes to 6H. This level of detail in instructions underscores the complexity added by allowing ITC reclaim in extended periods and ensures taxpayers correctly populate the annual return.

Impact: For GST-registered businesses, annual compliance for FY 2024-25 will require more granular data and careful preparation. The changes are extensive:

• Systems and Record-Keeping: Accounting or GST return software must be updated to capture these new fields. Throughout FY 2024-25 and especially during Apr–Nov 2025, companies should tag ITC claims and reversals with the financial year they belong to. For example, if in Oct 2025 you claim some ITC from a March 2025 invoice, that needs to be flagged so it can be reported in “ITC of preceding FY availed in current FY” (A1). Similarly, if you reverse ITC in July 2025 for an invoice of Jan 2025 (due to non-payment within 180 days), and then reclaim it in December 2025 after payment (though December reclaim would be outside 30 Nov, so actually not allowable – but for example’s sake), the part reclaimed within Apr–Oct needs separate treatment. Granular tracking is essential. Businesses may need to maintain schedules for ITC carry-forwards and reversals to fill GSTR-9 accurately.
• Enhanced Transparency and Audit Trail: The new tables A1/A2, 7A1/7A2, 8H1, etc., provide tax officers a clear view of compliance with time limits. Section 16(4) deadline enforcement: Table 13 and A1 together reveal how much ITC a taxpayer missed claiming in the correct year and had to claim later. Tax authorities can readily see if someone consistently avails large prior-year credits (which might indicate systemic delays or issues in procurements). Rule 37 & 37A enforcement: Tables 7A1 and instructions around 6A1/6H let officers check if ITC reversals for non-payment were properly done and only reclaimed when due. The annual return now distinguishes “ITC reclaimed” vs “first-time availed”, closing gaps where taxpayers might accidentally (or intentionally) double count. Part V alignment: With the due date now standardized to 30 Nov, Part V ensures all such adjustments are on record. Auditors will likely use these disclosures to ensure clients adhered to cutoff dates – any credit taken after 30 Nov will simply not appear in 13 and thus should not exist, enforcing discipline.
• Reconciliation and Liability Check: The revamped Table 9 (tax payable vs paid) is effectively a self-reconciliation of liability. Taxpayers preparing GSTR-9 must reconcile their GSTR-3B filings to compute those figures. Any difference (outstanding liability) will be glaring. This might prompt many to voluntarily pay off any shortfall for the year before filing GSTR-9, as leaving a difference invites scrutiny or notices. It’s a move towards encouraging full payment of taxes – since late payment would show up and interest would be applicable. From a business perspective, finance teams should verify that for each tax head, the “Tax Payable” (auto-populated from GSTR-3B total liabilities of the year) matches the “Total Paid” (cash + ITC) for that head. If not, an explanation or rectification may be needed before annual return submission.
• Data Volume and Effort: The annual return form is now more detailed; filling it will require careful effort. Compliance teams must be aware of new Form GSTR-9 requirements well in advance (perhaps the government/CBIC will also release an updated utility and guidance). Training might be required for staff or consultants to properly classify transactions into these new buckets. Expect that the annual return for FY 2024-25 will take longer to compile than previous years due to these additional disclosures. Firms should not leave it to the last minute; they should start compiling the lists of late claimed invoices, late credit notes, import IGST credits claimed late, etc., as the year progresses.
• Professional Advisors: For GST auditors and practitioners, these changes signal a more rigorous reconciliation process. The annual GST Audit (if reinstated, or even self-certified reconciliation in GSTR-9C) will use this data. In fact, changes to GSTR-9C (reconciliation statement) are also on the anvil, as hinted in GST Council discussions. The TaxO summary indicates similar enhancements in GSTR-9C (integration of Section 9(5) supplies, etc.). Therefore, the annual return’s changes are part of a broader move to tighten compliance reporting. Professionals should incorporate checks for each new row – e.g., verify that A1 plus A2 equals 6A total ITC, ensure no overlap between 6H (reclaimed ITC) and 6A1 entries, etc., to avoid inconsistencies.

The amendments w.r.t. Form GSTR-9 bring the form up-to-date with legislative changes and aim to improve the quality of information furnished to the tax authorities. While this will increase the compliance burden in terms of data collection and return preparation, it will also reduce ambiguity and errors in annual reporting. GST practitioners and taxpayers should treat FY 2024-25 as a transition year for annual compliance, invest time in understanding new requirements, and possibly update their internal systems or seek professional tools that can generate the figures for the new tables. Early preparation and consultation can ensure a smooth filing when the time comes, and help avoid penalties or notices for omissions in this more exhaustive annual return format.

10. Amendments in FORM GSTR-9C

The notification introduces several important modifications in FORM GSTR-9C (Reconciliation Statement). In Part II, under the reconciliation of turnover, a new line item D1 is inserted to capture supplies on which tax is payable by e-commerce operators under Section 9(5), with the obligation clearly marked as “Supplier to report.” Correspondingly, the formula for reconciliation is updated from (A–B–C–D) to (A–B–C–D–D1) to ensure correct computation of taxable turnover.

In Part III, under reconciliation of tax paid, a new item K-2 is added to disclose supplies on which the e-commerce operator is liable to pay tax under Section 9(5), making it mandatory for the operator to report such liabilities separately. Moreover, the term “paid” is replaced by “payable” to bring accuracy in describing liability obligations. Further, wherever additional tax liability is to be shown, the amendment allows reporting payments not only through cash but also through Input Tax Credit (ITC).

Impact: These changes are intended to bring greater transparency and accountability in reporting e-commerce transactions under Section 9(5). By creating separate disclosure heads for such supplies, the law ensures both suppliers and operators properly account for tax responsibilities. Taxpayers must carefully segregate their transactions, since non-reporting could lead to mismatches between GSTR-9C and GSTR-9.

11. Insertion of FORM GST APL-02A

A completely new form, GST APL-02A (Provisional Acknowledgment for Appeals/Applications), is introduced. This form provides for a two-stage acknowledgment system:

• Part A: Provisional acknowledgment issued upon submission of appeal/application on the GST Tribunal portal.
• Part B: Final acknowledgment after scrutiny by the Registry/Bench, confirming registration or rejecting/dismissing the appeal.

Impact: This change streamlines the appeals process before the GST Appellate Tribunal. Taxpayers now have an immediate record of filing (Part A) while awaiting scrutiny, reducing disputes about filing deadlines. It also enhances transparency by providing formal communication in cases of rejection, dismissal, or jurisdictional errors.

12. Insertion of FORM GST APL-04A

A new summary form GST APL-04A is introduced to record the outcome of Tribunal orders. It includes sections for:

• Disputed and determined amounts of tax, interest, penalty, and fees,
• Place of supply–wise breakup,
• Specific details for remanded cases, and
• Anti-profiteering orders.

Impact: This form standardizes how Tribunal decisions are summarized, ensuring clarity on confirmed liabilities and reducing misinterpretation of detailed orders. It facilitates easier follow-up for taxpayers, officers, and auditors by highlighting the quantifiable results of litigation.

13. Substitution of FORM GST APL-05

The earlier appeal form APL-05 is fully substituted. The new format captures extensive details such as: appellant and respondent particulars, case summaries, demand/penalty details, pre-deposit compliance, issues under dispute, and categorized annexures (A–E).

Impact: The revised form strengthens the documentation framework for Tribunal appeals, compelling appellants to provide structured, comprehensive details. This improves efficiency in case scrutiny, ensures uniformity across appeals, and aligns with digital filing requirements. Businesses must prepare complete and accurate case summaries and annexures to avoid delays in admission.

14. Substitution of FORM GST APL-06

The new APL-06 provides for cross-objections before the Tribunal under Section 112(5). It requires disclosure of appellant/respondent details, amount under dispute (tax, interest, penalty, etc.), and a structured table for relief claimed. Annexures are included to summarize issues and replies.

Impact: This gives respondents (including tax authorities) a formal platform to raise cross-objections against appeals, ensuring balanced representation before the Tribunal. Businesses should expect increased engagement from the department in litigation, making it important to prepare strong counter-arguments and anticipate cross-objections.

15. Substitution of FORM GST APL-07

FORM GST APL-07 relates to applications filed by the tax authorities before the Appellate Tribunal under section 112(3) of the CGST Act. This provision empowers the Commissioner or an authorized officer to challenge orders passed by appellate or revisional authorities. The present notification substitutes the earlier format of APL-07 with a revised and more comprehensive structure.

The notification introduces a new FORM GST APL-07, which replaces the earlier version relating to applications filed by tax authorities before the Appellate Tribunal under section 112(3) of the CGST Act. The revised form is far more comprehensive and structured, requiring the appellant (Commissioner or authorized officer) to provide complete identification details, jurisdiction, and authorization. It also captures full particulars of the respondent, including GSTIN, address, and nature of business, along with details of the order under challenge. Importantly, the form now mandates a clear case summary, covering the brief issue, period of dispute, market value of seized goods (where applicable), and whether the dispute involves the place of supply. To ensure standardization, it introduces annexures that require a point-wise comparison of positions taken by the adjudicating authority, appellate/revisional authority, and the appellant. This framework compels the appellant authority to articulate issues with precision and discourages vague or generalized appeals.

Another key feature of the substituted form is the introduction of a demand table, where tax, interest, penalty, fees, and other charges must be clearly segregated across Central, State/UT, and Integrated tax, as well as cess. The table is designed to auto-populate from system records (like APL-01/DRC-07) wherever available, ensuring accuracy and reducing clerical errors. Additionally, a new authorization clause has been added, requiring the officer filing the application to declare that they have been duly authorized by the Commissioner under section 112(3), with a copy of such authorization to be uploaded. This ensures accountability and prevents unauthorized filings. Overall, the new APL-07 form represents a major procedural reform that enhances transparency, enforces accountability, and standardizes how tax authorities present appeals before the Tribunal, thereby facilitating quicker and more efficient adjudication.

Impact: The substitution of FORM GST APL-07 has a significant impact on the GST appellate framework. By making the form more structured and comprehensive, it ensures that tax authorities present appeals in a clear, systematic, and uniform manner. The inclusion of detailed sections such as the case summary, respondent’s business profile, chronological statement of facts, and categorized issues compels officers to precisely identify the grounds of dispute. This not only reduces the chances of vague or frivolous appeals but also helps the Appellate Tribunal quickly understand the crux of the matter, thereby improving efficiency in adjudication. Further, the introduction of a detailed demand table and the requirement of a Commissioner’s authorization add layers of accountability and transparency. Auto-population of demand data from system records minimizes clerical errors, while the authorization clause prevents unauthorized appeals, strengthening procedural discipline. Collectively, these reforms standardize the appeal process, save time for both appellants and the Tribunal, and contribute to faster and fairer resolution of disputes under GST.

The Compete Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/09/NN-13-CT-The-Central-Goods-and-Services-Tax-Third-Amendment-Rules-2025.pdf