From May 2025, a key GST rule mandates separate reporting of B2B and B2C sales in GSTR-1. Exports are now strictly classified under B2C. This change aims to streamline HSN-wise data validation and reduce mismatches in GST returns.
Goods and Services Tax (GST) 2.0 reform, which came into effect from September 22nd, 2025, brought relief for the common people and boosts for businesses. One of the key GST updates under 2.0 reform is that it simplified the GST tax structure from a 4-slab (5%, 12%, 18% and 28%) to a 3-slab (5%, 18% and 40%).
The next phase of the GSTR-1 enhancement will provide the taxpayers with an enhanced GSTR-1 online summary view, recipient(s) wise summary PDF and remove need of SUBMIT before FILE. The details regarding the same will also be informed to the taxpayers in due course.
What is changing? Starting from December 1, 2025, the GST portal will enforce a hard stop on filing old returns. Businesses will be permanently barred from filing any GST return (GSTR-1, GSTR-3B, GSTR-9) that is more than three years past its original due date.
Starting May 2025, the CBIC has introduced a significant GST rule change that affects how businesses report their sales in GSTR-1. All taxpayers must now clearly bifurcate B2B and B2C transactions when entering HSN summary details. This impacts exporters, suppliers, and e-commerce operators directly.
Base year and payment period
For example, GST/HST credit payments calculated on the 2024 tax return will start being issued in July 2025, which is the beginning of the payment period.
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
From April 2025, GSTR-3B will auto-populate liability and ITC values based on GSTR-1 and GSTR-2B, with limited room for manual correction. Starting July 2025, Table-3 of GSTR-3B becomes non-editable, so errors in GSTR-1 or IFF filings will directly impact tax liability.
Starting September 22, 2025, GST in India will be simplified to primarily two rates: 5% and 18%, with a special 40% rate on luxury and sin goods like tobacco and high-end vehicles. Many essentials, including certain medicines and foods, are now zero-rated, while several items see reduced rates.
Effective October 1st, 2025, a new set of rules for GST return filing will come into effect. This marks the first filing cycle under the GST 2.0 reforms, aimed at improving transparency, control, and accuracy in Input Tax Credit (ITC) management through the Invoice Management System (IMS).
2022, Works contract services provided to Central and State Government, or Local Authorities, which were earlier eligible for concessional rate of 12% GST,would attract GST at the rate of 18% in view of amendment carried out in notification No. 11/2017- Central Tax (Rate) vide notification No.
GSTR-1 HSN summary rules clarified: B2B HSN entry in Table 12 is now mandatory and validated by GSTN. For B2C, taxpayers with turnover up to ₹5 crore can leave HSN blank. Separate tabs for B2B and B2C simplify filing and reduce errors.
Tax changes for 2025, largely driven by the "One Big Beautiful Bill" (OBBBA) Act, introduce significant deductions for seniors, tips, overtime, and auto loan interest, expand the Child Tax Credit, and raise the SALT deduction cap to $40,000, while making several 2017 Tax Cuts and Jobs Act provisions permanent, including the seven tax brackets. Key changes include a $2,200 Child Tax Credit, a $6,000 senior deduction, deductions for qualified tips and overtime, and a permanent standard deduction increase.
Using the wrong tax codes or accounting method
Many GST mistakes are the result of using incorrect tax codes or the wrong accounting method: Tax codes: If a GST-free sale is coded as taxable in your accounting system, you'll pay GST unnecessarily. If a taxable sale is coded GST-free, you'll underpay.
The shift to a two-slab system of 5% and 18%, removing the earlier 12% and 28% rates, will make taxation more transparent and easier to follow. At the same time, a 40% on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft ensures fairness and revenue balance.
GST Notification 17/2025-Central Tax dt. 18-October-2025
Registered taxpayers can now file their GSTR-3B for the month of September 2025 or the quarter of July–September 2025 by October 25, 2025, instead of the earlier due date.
Every registered taxable person, other than an input service distributor/ composition taxpayer/ persons liable to deduct tax u/s 51 / persons liable to collect tax u/s 52 is required to file Form GSTR-1, the details of outward supplies of goods and/or services during a tax period, electronically on the GST Portal.
Goods and services tax credit
According to the federal government, the maximum annual amount an individual may receive from July 2025 to June 2026 is $533, while a married or common-law couple could see up to $698 combined.
How to Avoid GST on Overseas Purchases Legally
GST Rate and Slab Changes in September 2025
GST rate cuts on 200 items happened from 22nd September 2025. 90% of items in the current 28% slab are moved to the 18% slab. Almost 99% of the items in the 12% slab are moved to the 5% slab.
If your GST turnover is below the $75,000 threshold, you may choose to register. But if you do, regardless of your turnover, you must: include GST in the price of most goods and services you sell. claim GST credits for most business purchases you make.
India's GST regime is undergoing a landmark transformation with the 56th GST Council meeting unveiling GST 2.0 - next-generation reforms simplifying tax slabs to 5%, 18%, and 40%. Effective from September 22, 2025, these reforms aim to ease compliance, boost consumption, and fuel economic growth.
Gross GST collections for July 2025 reached Rs. 1,95,735 crore, which is higher than last month's figures. Year-on-year data indicates that July 2025 collections are 7.5% higher than those of July 2024, when they stood at Rs. 1,82,075 crore.
The GST network issued another advisory on 7th June 2025, implementing the rule of time-barring of GST return filing beyond three years from the due date. By this update, taxpayers will not be able to file GST returns after three years from the due date of such return.