Central GST Third Amendment Rules, 2025: Key Reforms and Implications

On 17-9-2025, the Ministry of Finance notified the Central Goods and Services Tax (Third Amendment) Rules, 2025, aimed at streamlining refund procedures, refining appellate mechanisms, and enhancing reporting formats in annual returns and reconciliation statements. This Amendment Rule will come into effect form 22-9-2025. Notably, certain provisions have distinct effective dates:

1. Rule 39 Amendment: Deemed effective from 1-4-2025

2. Rule 91 Amendment: Effective from 1-10-2025

Key Points of Central GST Third Amendment 2025:

1. The Third Amendment amends the Central Goods and Services Tax Rules, 2017, reflecting the government’s commitment to:

   • Streamlining refund and appeal mechanisms

   • Enhancing transparency in ITC reporting

   • Addressing complexities in e-commerce taxation

   • Improving reconciliation between financial statements and GST returns

2. The Valuation multiplier for actionable claims such as lottery tickets has been revised from 128 to 140 under Rule 31A (2). This change directly impacts the tax computation for businesses engaged in lottery, betting, and gambling activities.

3. Under Rule 39 (1A), the scope of input tax credit distribution by Input Service Distributors (ISDs) has been expanded to include supplies under reverse charge as per sections 5(3) and 5(4) of the Integrated GST Act. This ensures a more inclusive and accurate distribution of ITC across branches and units of businesses operating in multiple states.

4. Rule 91(2) has been substituted to mandate that refunds be processed based on system-driven risk evaluation, with the proper officer required to issue FORM GST RFD-04 within seven days of acknowledgment. This automation is expected to reduce delays and enhance refund efficiency.

5. Rule 110 has been revised to introduce FORM GST APL-02A, replacing the earlier APL-02 and dividing the appeal process into Part A (acknowledgment) and Part B (submission).

6. A new Rule 110A empowers the President or Vice-President of the Appellate Tribunal to assign appeals to a Single Member Bench if the matter does not involve a question of law. If a similar issue has already been adjudicated by a Bench comprising both a Technical and Judicial Member, future appeals on the same issue must follow the same composition.

7. Additionally, the ₹50 lakh threshold under Section 109(8) will now be calculated cumulatively across all issues and tax periods covered in the appealed order, ensuring consistency and fairness in bench allocation.

8. Rule 113(2) has been substituted to require the Appellate Tribunal to issue a summary of its order in FORM GST APL-04A, clearly indicating the final amount of demand confirmed.

9. The annual return FORM GSTR-9, has been amended as follows:

   1. Table 6A1: Input Tax Credit (‘ITC’) of previous FY availed in April—October of current FY.

   2. Table 6H1: IGST credit availed on imports in next FY.

   3. Table 7A—7H: Consolidated ITC reversals under Rules 37, 37A, 38, 39, 42, 43 and section 17(5).

   4. Table 13: ITC availed in next FY for supplies received in current FY.

   5. Table 14: Differential tax paid due to adjustments in Tables 10 & 11.

10. In FORM GSTR-9C, which reconciles audited financials with GST returns, new rows have been added to account for supplies where tax is payable by e-commerce operators under Section 9(5).

11. This includes Row D1 in Part II and Row K2 in Part III, ensuring that both suppliers and e-commerce platforms accurately report their respective liabilities. The terminology has been updated to reflect “payable” rather than “paid,” and additional liabilities can now be settled through either cash or ITC.

12. Late fee reporting has been formalized under Section 47(2), and references to the electronic credit ledger have been incorporated to reflect modern digital practices.

13. The Instructions to FORM GSTR-9 and GSTR-9C have been extensively updated to reflect changes applicable from FY 2024—25 onwards, including revised definitions, updated table references, and clarified reporting logic for ITC availed, reversed, and reclaimed across financial years.

14. FORM GST APL-02A is introduced marking a significant step toward digitizing and streamlining the appeals process. By splitting the form into two parts and aligning it with the revised rules, the government has made it easier for taxpayers to file and track appeals electronically.