GST Alert! Massive Finance Act 2025 Amendments Go Live on Oct 1, 2025
The Central Board of Indirect Taxes and Customs under the Ministry of Finance (Department of Revenue) shared a notification (No. F. No. CBIC-20001/2/2025-GST) dated September 17, 2025 in powers given by Section 1(2) and clause (b) of the Finance Act, 2025 (7 of 2025).
The Central Government announced the selection of October 1, 2025 as the date on which the provisions of clauses (ii) and (iii) of Section 21, Sections 122 to 124 and Sections 126 to 134 of the said act will come into effect.
In the Finance Act, 2025, Sections 122 to 124 and 126 to 134 launches many major amendments to the Central Goods and Services Tax (CGST) Act, 2017. These provisions, which became effective on October 1, 2025, mainly focus on clarifying existing GST rules, streamlining compliance, and strengthening enforcement mechanisms.
| Provision of Finance Act, 2025 | Summary |
| Clauses (ii) and (iii) of Section 121 | Clause (ii): Changes in definition of Local authority
Clause (iii): Definition of Unique identification marking inserted |
| Section 122 | In section 12 of the Central Goods and Services Tax Act, sub-section (4) shall be omitted. This sub-section delt with Time of Supply for issue of vouchers in case of supply of goods. |
| Section 123 | In section 13 of the Central Goods and Services Tax Act, sub-section (4) shall be omitted. This sub-section delt with Time of Supply for issue of vouchers in case of supply of services. |
| Section 124 | For the words “plant or machinery”, the words “plant and machinery” shall be substituted. This has been substituted with effect from the 1st day of July, 2017 to nullify the effect of Supreme Court’s Judgement in case of Safari Retreats. |
| Section 126 | No reduction in output tax liability of the supplier shall be permitted, if the:
(i) ITC as is attributable to such a credit note, if availed, has not been reversed by the recipient, where such recipient is a registered person; or (ii) Incidence of tax on such supply has been passed on to any other person, in other cases.”. This has been done to give a legal color to Invoice Management System |
| Section 127 | Changes made in section 38 to give a legal color to Invoice Management System |
| Section 128 | In section 39 of the Central Goods and Services Tax Act, in sub-section (1), for the words “and within such time”, the words “within such time, and subject to such conditions and restrictions” shall be substituted.
This gives backing to provisions of maximum time limit of 3 years for belated filing of GSTR-3B, Non-allowance of GSTR-3B filing if consecutive GSTR-1 and previous GSTR-3B are not filed |
| Section 129 | Now in case of any order demanding penalty without involving demand of any tax, no appeal [Section 107: Appeals to Appellate Authority] shall be filed against such order unless a sum equal to ten per cent. of the said penalty has been paid by the appellant. |
| Section 130 | Now in case of any order demanding penalty without involving demand of any tax, no appeal [Section 112: Appeals to Appellate Tribunal] shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 107 has been paid by the appellant. |
| Section 131 | New Section 122B has been inserted for Penalty for failure to comply with track and trace mechanism (Section 148A) for certain goods notified by Government: tobacco, pan masala, scrap, plastic, and paper |
| Section 132 | New Section 148A has been inserted for Track and trace mechanism for certain goods notified by Government: tobacco, pan masala, scrap, plastic, and paper |
| Section 133 | Amendment in Schedule III of CGST Act, 2017:
i. To insert clause (aa) in paragraph 8 of Schedule III of the CGST Act, 2017 w.e.f. 01.07.2017, to explicitly provide that supply of goods warehoused in a Special Economic Zone (SEZ) or Free Trade Warehousing Zone (FTWZ) to any person before clearance of such goods for exports or to the Domestic Tariff Area, shall be treated neither as supply of goods nor as supply of services. ii. This brings transactions relating to supply of goods warehoused in SEZ/FTWZ at par with the existing provision in GST for transactions in Customs bonded warehouse. |
| Section 134 | No refund shall be made of all such tax which has been collected, but which would not have been so collected, had section 133 been in force at all material times. |
For complete details refer the following notification-