Key Highlights Of GST Notification And Clarification Circulars In December 2025

NOTIFICATIONS UPDATES

Notification No. 19/2025 - Central Tax

The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification seeking to notify supplies under section 15(5) of CGST Act for valuation based on Retail Sale Price (RSP) on 31 December 2025.

Seeks to notify supplies under Section 15(5) of CGST Act for valuation based on Retail Sale Price (RSP)

You may refer to Notification No. 20/2025 - Central Tax, i.e., Seeks to notify Central Goods and Services Tax (Fifth Amendment) Rules, 2025, for this update.

Notification No. 19/2025 - Central Tax (Rate)

Notification No. 19/2025 - Integrated Tax (Rate)

Notification No. 19/2025 - Union Territory Tax (Rate)

CBIC issued a notification on 31 December 2025 seeking to amend the GST rates applicable to tobacco products.

GST rate changes - Pan Masala, tobacco & Nicotine Products

The Government has revised the GST rates on the following specified goods with effect from 1 February 2026:

• Schedule VII (14%/28%) shall be omitted.
• Above rates are in addition to Compensation Cess, wherever applicable.

Notification No. 20/2025 - Central Tax

CBIC has issued a notification seeking to notify Central Goods and Services Tax (Fifth Amendment) Rules, 2025 on 31 December 2025.

Seeks to notify Central Goods and Services Tax (Fifth Amendment) Rules, 2025

The Government has issued a notification amending the CGST Rules, 2017 by inserting a new Rule 31D and amending Rule 86B, effective from 1 February 2026.

Seeks to notify Central Goods and Services Tax (Fifth Amendment) Rules, 2025

• Rule 31D prescribed special valuation mechanisms for certain specified goods.
• Following specified goods covered under Rule 31D:

• Sr. No.	Chapter/ Heading/Sub-heading/ Tariff item	Description of Goods
  1	2106 90 20	Pan masala
  2	2401	Unmanufactured tobacco; tobacco refuse [other than tobacco leaves]
  3	2402	Cigars, cheroots, cigarillos and cigarettes, tobacco or of tobacco substitutes
  4	2403	Other manufactured tobacco and manufactured tobacco substitutes; "homogenized" or "reconstituted" tobacco; tobacco extracts and essences (other than biris)
  5	2404 11 00	Products containing tobacco or reconstituted tobacco and intended for inhalation without combustion
  6	2024 19 00	Products containing tobacco or nicotine substitutes and intended for inhalation without combustion

• For above notified goods, the value of supply shall be deemed to be the RSP declared on the package less the amount of tax as applicable.
• Tax amount shall be calculated using the prescribed formula: Tax amount = (RSP * applicable tax rate)/(100 + applicable tax rate)
• RSP means the maximum price declared on the package, inclusive of all taxes, cess, duties, etc.
• If multiple RSPs are declared, the highest RSP will be considered.
• If RSP is increased at any stage (before, during or after supply), the revised RSP shall be adopted.
• Where different RSPs are declared for different areas, the RSP applicable to that particular area shall be used for valuation.

Amendment to Rule 86B (Restriction on ITC Utilization)

• A new clause (f) is added to the first proviso of Rule 86B.
• Registered people (other than manufacturers) dealing in goods covered under Rule 31D shall be exempt from the restrictions of Rule 86B, provided that tax has been paid by the supplier on the basis of RSP valuation.

GST PORTAL UPDATES

Gross and Net GST revenue collections for the month of November 2025

The GSTN team has released Gross and Net GST revenue collections for the month of November 2025. Detailed report may be viewed here.

FAQs on GSTR - 9/9C for FY 2024-25

GSTN released additional FAQs on GSTR-9/9C for FY 2024–25 on 4 December 2025. Please see the details here.

Advisory on reporting values in Table 3.2 of GSTR-3B

The advisory on reporting values in Table 3.2 of GSTR-3B has been released with the following key points:

• Table 3.2 of GSTR-3B reports inter-state supplies made to unregistered persons, composition taxpayers, and UIN holders and is auto-populated from the relevant tables of GSTR-1, GSTR-1A, and IFF.
• From the November 2025 tax period onwards, Table 3.2 will be non-editable in GSTR-3B.
• Any correction required in the values of Table 3.2 for the same tax period can be made only through GSTR-1A.
• Amendments made in GSTR-1A will immediately update the auto-populated values in GSTR-3B. Such supplies can also be amended in subsequent tax periods through GSTR-1 or IFF.
• Taxpayers are advised to report accurate values in GSTR-1, GSTR-1A, or IFF to avoid frequent amendments and ensure compliance.

Auto Suspension of GST Registration due to Non-Furnishing of Bank Account Details as per Rule 10A

Auto Suspension of GST Registration for Non-Furnishing of Bank Details (Rule 10A)

• Taxpayers (except TCS, TDS, and Suo-moto registrations) must provide bank account details within 30 days of GST registration or before filing GSTR-1/IFF, whichever is earlier.
• Failure to furnish bank details will lead to automatic suspension of GST registration.
• Once bank details are submitted, cancellation proceedings are automatically dropped.
• If not dropped the same day, taxpayers can manually click "Initiate Drop Proceedings" under: Services > User Services > View Notices and Orders.
• Furnishing bank account details is not mandatory for OIDAR and NRTP taxpayers. However, for OIDAR taxpayers who select "Representative Appointed in India" as 'Yes', furnishing bank account details is mandatory.

Advisory & FAQ on Electronic Credit Reversal and Re-claimed Statement & RCM Liability/ITC Statement

GSTN has released an advisory and FAQs on the Electronic Credit Reversal and Re-claimed Statement and the Reverse Charge Mechanism (RCM) Liability/ Input Tax Credit (ITC) Statement, explaining how these statements now regulate and control ITC reporting in GSTR-3B.

Electronic Credit Reversal & Re-claimed Statement (Reclaim Ledger)

ITC temporarily reversed in Table 4(B)(2) and later re-claimed in Table 4(A)(5)/4(D)(1) of GSTR-3B, effective from Aug-2023 (for monthly taxpayer) and Jul-Sep-2023 (for quarterly taxpayer).

RCM Liability/ITC Statement (RCM Ledger)

RCM liability in Table 3.1(d) and corresponding ITC in Table 4(A)(2) and 4(A)(3) of GSTR-3B, effective from Aug-2024 (for monthly taxpayer) and Jul-Sep-2024 (for quarterly taxpayer).

As of Now

• Currently, the system only shows warning messages if excess ITC is reclaimed or claimed; however, filing of GSTR-3B is still allowed.
• Taxpayers were given multiple opportunities to declare or amend opening balances for past ITC reversals or RCM ITC relating to periods prior to implementation.

Upcoming Change

• ITC reclaimed in Table 4(D)(1) cannot exceed the closing balance in the Reclaim Ledger and current period reversal in Table 4(B)(2).
• ITC under RCM in Table 4(A)(2) & 4(A)(3) cannot exceed RCM tax paid in Table 3.1(d) plus the closing balance in RCM Ledger.
• Negative balances or excess ITC claims will not be permitted going forward.
• If a taxpayer already has a negative balance in either ledger, GSTR-3B filing will be blocked until corrected by:
• • Reversal of excess ITC must be done in Table 4(B)(2) or paying it as liability if no ITC is available
  • For RCM, by paying additional RCM liability or reducing the excess RCM ITC claimed.

GST is moving from a warning-based approach to strict system-level enforcement to ensure that ITC and RCM claims are supported by actual reversals and tax payments, thereby preventing excess or incorrect availing of ITC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.