GST New Rules from April 1, 2025: What’s Changing & How It Affects You

New GST Rules from April: Impact on Businesses & Consumers

The Goods and Services Tax (GST) framework is set to undergo significant changes from April 1, 2025. These modifications aim to streamline taxation, enhance compliance, and curb fraudulent activities. If you’re a business owner, taxpayer, or consumer, here’s everything you need to know about how these new GST rules will impact you.

1. Multi-Factor Authentication (MFA) Becomes Mandatory

To enhance security and prevent data breaches or fraudulent transactions, the government is making Multi-Factor Authentication (MFA) mandatory for all GST-registered users. Previously, this was applicable only to businesses with a turnover exceeding Rs. 20 crore (since January 2025) and Rs. 5 crore (since February 2025). Now, from April 1, 2025, all users must enable MFA to access the GST portal.

What This Means for You:

• GST login will require an OTP verification in addition to a username and password.
• Businesses should ensure their registered mobile numbers are updated on the GST portal to avoid access issues.
• This step will reduce the risk of fraudulent activities and unauthorized access to GST data.

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2. Changes in E-Invoicing Rules for Businesses

Starting April 1, businesses with a turnover of Rs. 10 crore or more must report their e-invoices to the Invoice Registration Portal (IRP) within 30 days. Currently, this rule applies only to businesses with a turnover of Rs. 100 crore or more.

Impact on Businesses:

• Failing to report e-invoices within 30 days will result in their rejection.
• SMEs and mid-sized businesses must upgrade their billing systems to comply with the new regulation.

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3. Hotel & Restaurant Bills Might Increase

Hotels with room tariffs below Rs. 7,500 currently charge 5% GST without Input Tax Credit (ITC). However, from April 1, 2025, these hotels can opt for 18% GST with ITC benefits.

How This Affects Consumers:

• Restaurants in such hotels may increase food prices to accommodate the higher tax rate.
• Consumers should check if the restaurant is charging 5% GST (without ITC) or 18% GST (with ITC).

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4. Higher GST on Used Cars

The sale of second-hand cars will now attract 18% GST instead of 12%. This applies to used car dealerships and agencies involved in the resale of vehicles.

Effect on Buyers & Sellers:

• Expect higher prices for second-hand cars from dealerships due to the increased tax burden.
• Private individuals selling their used cars will not be affected, as GST applies only to registered businesses.

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5. Rationalization of GST Rates in the Future

Finance Minister Nirmala Sitharaman has indicated that GST rates may further decrease as the tax slab restructuring process nears completion. The Revenue Neutral Rate (RNR), which was 15.8% in 2017, has now dropped to 11.4% in 2023, and further reductions are expected.

What to Expect:

• Possible simplification of GST slabs in the near future.
• Reduced tax burden on consumers and businesses.

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Final Thoughts

With enhanced security measures, stricter compliance norms, and changes in tax rates, the new GST rules from April 1, 2025, will significantly impact businesses and consumers alike. Whether you’re a small business owner, a hotelier, a car dealer, or a consumer, staying informed about these changes will help you navigate the transition smoothly.

• Make sure your GST-registered mobile number is updated.
• Prepare your billing systems for the new e-invoicing regulations.
• Be aware of tax rate changes while making purchases.

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