The Central Board of Indirect Taxes and Customs (CBIC) has issued a series of GST 2.0 notifications on 17th September 2025, following the 56th GST Council meeting, aimed at rationalizing GST rates, expanding exemptions, and strengthening compliance measures.

Background: GST 2.0 and the 56th GST Council Meeting

The 56th GST Council focused on implementing GST 2.0, a reform initiative designed to:

• Simplify tax structures and schedules
• Introduce concessional rates for essential and artisan goods
• Clarify exemptions for individuals and small businesses
• Enhance compliance, Input Tax Credit (ITC) rules, and enforcement measures

As part of GST 2.0, the Council recommended changes in CGST rates, service tax rates, and exemptions across goods and services, forming the basis of the notifications issued by CBIC.

Rate-Related Notifications (Goods & Services) – Effective from 22nd September 2025

Here’s a consolidated view of notifications 9/2025 to 17/2025 with key goods/services and rates:

Non-Rate Notifications (Compliance & Procedural):

GST Notification 13/2025 – CGST (Third Amendment) Rules, 2025

This notification amends certain CGST Rules, 2017, under the Third Amendment Rules, 2025. Most changes are effective from 22nd September 2025, while some are retrospective from 1st April 2025 or come into effect on 1st October 2025.

Key changes include:

• Rule 31A(2) – The valuation multiplier for lottery, betting, and gambling has been revised from 128 to 140, increasing the taxable value and corresponding GST liability for these activities.
• Rule 39(1A) – Input Service Distributors (ISDs) can now distribute ITC on IGST paid under reverse charge, effective from 1st April 2025, enabling proper allocation of credit across multiple branches or units.
• Rule 91(2) – Refund orders in Form GST RFD-04 are required to be issued within 7 days of acknowledgment, ensuring faster processing and improved liquidity for taxpayers.
• GSTR-9 Annual Return Updates – Taxpayers must now report prior-year ITC, net ITC for the current year, reversals, deferred ITC, and reconcile tax paid vs. tax liability, enhancing transparency and compliance.
• Appeals Before GSTAT – Procedural streamlining for the GST Appellate Tribunal. Rules 110 and 111 streamline GST Appellate Tribunal filings using Form GST APL-02A with provisional (Part A) and final (Part B) acknowledgments. Rule 110A allows single-member benches to decide factual appeals up to ₹50 lakh, while legal or complex cases go to multi-member benches. Rule 111 accepts self-attested copies, reducing procedural burdens. Rule 113(2) requires a summary in Form GST APL-04A with each order, showing final tax, interest, or penalty, enhancing clarity and transparency.

GST Notification 14/2025 – Refund Restrictions

This notification restricts provisional GST refunds for certain categories, effective 1st Oct 2025:

• Aadhaar Authentication: Refunds are not allowed if the taxpayer has not completed Aadhaar authentication (Rule 10B).
• Specific Goods: Refunds prohibited for suppliers of Areca nuts (0802 80), Pan masala (2106 90 20), Tobacco & manufactured tobacco substitutes (Chapter 24), Essential oils (3301)

Authorities will process refunds only after completing the necessary verifications, ensuring compliance before any provisional amounts are released.

GST Notification 15/2025 – Annual Return Exemption

Registered persons with aggregate turnover up to ₹2 crore are exempt from filing annual returns for FY 2024-25 onwards.

GST Notification 16/2025 – Compliance & Enforcement (Finance Act Sections) Effective 1st October 2025

Appoints the date for provisions under Finance Act, 2025, sections: 121, 122–124, 126–134. Focus areas:

• Stricter ITC timelines, documentation rules, and possible reversals for unmatched/disputed invoices
• Enhanced compliance, anti-evasion, and penalty provisions

Key Takeaways for Businesses – Ensuring Smooth Compliance:

1. Update Goods & Services Classification: Review and revise HSN codes and service categories to align with the new GST rates and exemptions.
2. Revise Pricing, Billing & Accounting Systems: Ensure IGST/CGST/SGST rates are correctly applied in invoices, ERP systems, and GST returns to prevent mismatches or errors.
3. Review Contracts & Agreements: Adjust supply contracts or service agreements, where necessary, to reflect revised rates and avoid disputes or margin issues.
4. Check ITC Eligibility & Utilization: Verify Input Tax Credit calculations, particularly for mixed-rate supplies, handicrafts, essential goods, and certain services.
5. Compliance for Refunds: Ensure Aadhaar authentication is completed for eligible refund claims
6. Staff Training & System Readiness: Train finance and GST teams on new rates, exemptions, and procedural updates. Update ERP, invoicing, and accounting systems before the effective dates to avoid compliance gaps.
7. Monitor Regulatory Updates: Keep track of procedural changes, ITC reversals, and enhanced penalty provisions to maintain transparency and avoid notices.

Conclusion:

These GST 2.0 notifications reflect the government’s push to simplify tax structures, clarify exemptions, and strengthen compliance, while guiding a smooth transition to the new framework. With key changes taking effect in just three days, businesses need to act promptly to make necessary changes, ensuring readiness and avoiding compliance issues under the new GST regime.

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