Stox N Tax

Big GST Changes from April 1, 2025: What Every Business Must Know!

Table of Contents

  1. Introduction
  2. Hotel Room Tariff Rates: Reclassification
  3. Mandatory Multi-Factor Authentication (MFA) on GST Portal
  4. GST on Sale/Purchase of Used Vehicles
  5. Revised GST Rates on Popcorn
  6. GST Exemption for Farmers Supplying Specific Produce
  7. E-Commerce Reporting: GSTR-8 Format Update
  8. TDS Filers: GSTR-7 Format Changes
  9. E-Invoice Reporting Window for Large Businesses
  10. Construction Materials: ACC Blocks at 12% GST
  11. Redefinition of Pre-Packaged & Labelled Goods
  12. Conclusion
  13. FAQs

1. Introduction

Starting April 1, 2025, several significant changes will take effect under India’s GST regime. These updates aim to streamline compliance, enhance reporting accuracy, and tighten system security. From hospitality to e-commerce, every industry will feel the impact.

2. Hotel Room Tariff Rates: Reclassification

GST rates on hotel accommodation will now vary based on room tariff:

  • Rooms priced above ₹7,500/day:
    18% GST with Input Tax Credit (ITC) available.
  • Rooms priced below ₹7,500/day:
    5% GST without ITC.

Impact: Mid-range hotels may need to rethink pricing to optimize tax costs for customers and maintain competitiveness.

3. Mandatory Multi-Factor Authentication (MFA) on GST Portal

From April 1, 2025, all users must log into the GST portal using Multi-Factor Authentication (MFA).

What this means:

  • Additional verification like OTPs, authenticator apps, etc., will be required.
  • Enhances data security, reduces risk of fraud or unauthorized access.

4. GST on Sale/Purchase of Used Vehicles

An 8% GST will now apply on the marginal value during the sale or purchase of old cars.

  • Marginal value = Sale price minus depreciated value or purchase price.
  • Likely to raise the effective tax burden for both individual and dealer transactions.

5. Revised GST Rates on Popcorn

Depending on labeling and content, the GST rates are now categorized as:

  • Unlabelled Popcorn: 5%
  • Labelled Popcorn: 12%
  • Sugar-coated Popcorn: 18%

Impact: Snack manufacturers and retailers must assess product labeling and ingredients to determine accurate GST.

6. GST Exemption for Farmers Supplying Specific Produce

Goods like green pepper, dried pepper, and raisins supplied directly by agriculturists will be exempt from GST.

Note: This applies only when sold directly by farmers, not through intermediaries.

7. E-Commerce Reporting: GSTR-8 Format Update

E-commerce operators will have to comply with a revised GSTR-8 format from April 1, 2025.

  • TCS (Tax Collected at Source) reporting must now align with the new format.
  • System updates may be required to avoid non-compliance.

8. TDS Filers: GSTR-7 Format Changes

Entities responsible for TDS under GST must now file a more detailed GSTR-7.

  • Likely additions include breakup of transactions, PAN validation, and reporting timelines.
  • Ideal time to train compliance teams and update ERP software.

9. E-Invoice Reporting Window for Large Businesses

Businesses with turnover above ₹10 crore cannot report e-invoices older than 30 days from their date of generation.

Example: An invoice dated March 1, 2025, must be uploaded to the IRP by March 31, 2025.

Impact: Delays in reporting can lead to penalties or rejection of e-invoices.

10. Construction Materials: ACC Blocks at 12% GST

Autoclaved Aerated Concrete (ACC) blocks with more than 50% fly ash content will now attract 12% GST.

  • Construction companies and developers must adjust procurement and billing accordingly.

11. Redefinition of Pre-Packaged & Labelled Goods

Goods weighing ≤25 kg/litre will now fall under the “pre-packaged and labelled” definition.

Implications:

  • These goods will be subject to GST even if earlier exempted.
  • Reassess classification and ensure labeling compliance to avoid disputes.

12. Conclusion

The April 2025 GST updates mark a substantial shift toward stricter compliance, greater digitization, and industry-specific clarifications. Businesses must proactively:

  • Review pricing and product labeling.
  • Update ERP systems for GSTR and e-invoice changes.
  • Train staff on new security and reporting norms.

13. FAQs

Q1. Will all GST users be affected by the new MFA requirement?
Yes, MFA will be mandatory for all GST users from April 1, 2025.

Q2. Is the 8% GST on used vehicles applicable to individuals too?
Yes, but it applies to the marginal value and may depend on the nature of sale.

Q3. Can a hotel charge 5% GST and still claim ITC?
No, the 5% GST slab disallows ITC. Only the 18% slab allows credit.

Q4. What’s the penalty for uploading an old e-invoice after 30 days?
The system will reject such invoices. Businesses may face penalties and denial of credit.

Q5. How do I check if my popcorn product attracts 5%, 12%, or 18% GST?
It depends on whether it’s labelled and whether it contains sugar coating. Always consult your tax advisor for classification.

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