The latest, major amendments in GST law for 2025-2026 revolve around "GST 2.0 reforms," featuring a major rate rationalization into a three-tier structure (5%, 18%, and 40% for sin/luxury goods) effective September 22, 2025. Key changes include replacing the 12% and 28% slabs, introducing 40% for luxury items, mandatory Input Service Distributor (ISD) mechanisms from April 1, 2025, and enhanced Invoice Management Systems (IMS).
Tax Rates
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.
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).
Starting from 1st April 2025, a new GST rule will be applied, GST-registered businesses with multiple GSTINs under the same PAN must register as an Input Service Distributor (ISD). This amendment has been introduced to simplify Input Tax Credit (ITC) distribution and enhance compliance.
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%.
implemented from April 01, 2025
ISD registration becomes mandatory with the following key aspects: (i) ITC available for distribution to be distributed in the same month. (ii) ITC distributed should not exceed the ITC available for distribution. (iii) Both eligible and ineligible ITC needs to be distributed separately.
The CRA will make these payments on the 5th day of July and October 2025, and of January and April 2026.
GST Notification 5/2025-Central Tax dt. 10-January-2025
05/2025 extends the due date for registered persons who are required to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017. These taxpayers must file their GSTR-7 return for December 2024 by January 12, 2025.
However the authorities may argue that Finance Act, 2025 + notifications+ portal readyness is sufficient to place IMS mandatory from 01/10/2025. An element of risk is involved, if it is not followed, despite Rule 60 is yet to be amended.
Total Net GST revenue for October 2025 stands at ₹1,69,002 crore, which is 0.6% higher(monthly growth) and 7.1% higher (yearly growth) than the corresponding period last year at ₹1,68,054 crore.
Impact on Businesses
Due to the GST Amendment Act, multiple businesses, whether it is small-scale or large-scale businesses, enjoy the benefits of simpler compliance procedures such as rationalised late fees and enhanced ITC rules.
India's Goods and Services Tax (GST) system has entered a new era with the rollout of GST 2.0, effective from September 22, 2025. The Council has simplified the structure into a 5% slab for essentials, 18% for standard goods, and 40% for luxury/sin items, replacing the earlier complex categories.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
Here are some of the primary and most common errors made by enterprises, and this is how you can fix them as well.
Payment amounts are recalculated every July
For example, the information from your 2024 tax return determines the GST/HST credit amount you get for the payment period from July 2025 to June 2026. You could get up to: $533 if you are a single individual. $698 if you are married or have a common-law partner.
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.
For the July 2025–June 2026 benefit year, the maximum annual GST amounts are: $533 – Single individual. $698 – Married or common-law couples. $184 – Per eligible child under 19.
What are the new GST rate slabs for 2025 in India? The slabs under the 2025 Next-Gen GST Reforms are 0% (exemption), 5% and 18%. A new 40% GST slab has been introduced for luxury goods like premium cars and bikes, and sin goods like cigarettes and tobacco.
Under the new GST rule effective from 1st April 2025, businesses operating multiple GST registrations under one PAN must compulsorily register as an Input Service Distributor (ISD)—a shift from the earlier optional requirement.
20th August 2025
Due to the incessant rains in various parts of Maharashtra, the government has extended GSTR-3B due date for July 2025 from 20th August to 27th August 2025.
Good news is, Starting July 2025, the HST/GST credit has increase by 2.7%, helping low- and modest-income households stretch their budgets. This tax free quarterly payment can put hundreds of extra dollars into your pocket each year.
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.
GST Notification 8/2025-Central Tax dt. 23-January-2025
This waiver applies to registered persons who failed to submit the required reconciliation statement (FORM GSTR-9C) along with the annual return but submit it before March 31, 2025.