• Notification Date: 18-12-2024
• Notification No: N/A

What’s coming for GST in 2025: Key Changes for Business

India’s Goods and Services Tax (GST), which has been in place since 2017, is about to experience some necessary changes. The 55th GST Council meeting, scheduled for December 21, 2024, will mainly focus on updates that could influence businesses in 2025. Here is a simple breakdown of what is expected.

A New GST Rate Structure?

The government is considering overhauling the recent GST rate system, which has multiple tiers. Businesses could soon see a more straightforward structure of tax. Proposals include lowering GST on items like packaged drinking water, bicycles, and notebooks to just 5%. At the same time, luxury items like expensive wristwatches and shoes might see an increase in tax rates up to 28%. There is also talk of making health insurance premiums—currently exempt from GST for coverage up to ?5 lakh—a change that would benefit many businesses and individuals.

GST Appeals and Amnesty Offer

The backlog of GST appeals has been piling up, with over 14,000 appeals pending as of mid-2023. To help clear this accumulation, the government is working on establishing the GST Appellate Tribunal (GSTAT) by the end of the year. In the meantime, businesses can take advantage of an amnesty scheme that waives interest and penalties if applications are submitted by June 30, 2025. This is a great opportunity to resolve outstanding issues without extra costs.

The New Invoice Management System (IMS)

A significant change that businesses will need to adapt to is the Invoice Management System (IMS), which started in October 2024. Under IMS, recipients of invoices must either accept or reject them. If no action is taken, the invoice is automatically accepted. This system aims to reduce errors in tax filings, but businesses will need to ensure their processes are ready for it.

Businesses may benefit from these changes in 2025, but it will be necessary to stay informed and prepared.