GST Filing Rules to Change from July

New Delhi: Starting July 2025, goods and services tax or GST compliance will undergo a shift with two key changes — locking of GSTR-3B forms and a three-year deadline for filing returns. These changes, introduced by the GST Council, aim to improve accuracy and transparency in return filing, while reducing mismatches and fraudulent claims. The move is aimed at ensuring consistency between GSTR-1 (which records outward supplies) and GSTR-3B (used to pay tax), reducing revenue leakages due to mismatches.

As per the GST rule, from the July 2025 return period, the GSTR-3B form will become non-editable once the tax details are auto-populated. Taxpayers will no longer be allowed to manually alter figures related to outward supplies and tax liability in the form. Instead, all such corrections must be made using the GSTR-1A form before filing GSTR-3B.Only one correction per tax period will be allowed. Besides, manual entries will still be permitted for reverse charge transactions.

For the last eight years, the GST Council, comprising finance ministers from the Centre and states, has already brought several changes on simplification of GSTR forms and other reforms to ease taxpayers’ burden and broaden the base in the country. However, experts suggest that there should be more room for simplification on compliance, reduce tax slabs to three and by bringing petroleum products under GST among others.

As per a PwC India report, the GST in India now stands at a critical juncture where aligning with global trade dynamics is essential. “The evolving landscape of international trade, coupled with the growing need to attract investments in the manufacturing and global capability centre sectors, calls for a GST framework that is agile, investor-friendly, and globally competitive,” the PwC report said on Monday.

After completing eight years of implementation, the GST subsumed about 17 local taxes and 13 cesses into a five-tier structure, simplifying the tax regime. Currently, GST is a 4-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are at the lowest 5 per cent slab

“A transition from 4-tier to a 3-tier rate structure would reduce interpretational disputes, improve tax certainty and simplify compliance. A comprehensive review of GST rate slabs is required to minimise the disparity between the GST rate on inputs as against that on output, especially for sectors such as electronic vehicle, aviation and e-commerce, which face credit accumulations on account of the inverted tax structure,” PwC said.

The PwC report also made a case for levying GST on petroleum products, starting with jet fuel or aviation turbine fuel (ATF), to remove the cascading effect and cash flow problem of the industry. “Petrol, diesel, natural gas and other petroleum products continue to be excluded from the GST regime and remain subject to central excise duty and state VAT. Such products can be brought within the ambit of GST only upon a specific recommendation by the GST Council, comprising finance ministers from states and the Centre,” it said.