Central GST (Third Amendment) Rules, 2025: Key Reforms & Compliance Impacts

The Central Goods and Services Tax (Third Amendment) Rules, 2025, notified by the CBIC, introduce significant changes to the GST framework to improve compliance, streamline processes, and provide clarity. While most provisions take effect on September 22, 2025, some have retrospective or prospective commencement dates.

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Key Reforms & Compliance Impacts

1. Valuation of Lottery & Gambling (Rule 31A(2)) 🎲

The rule for valuing actionable claims like lotteries and betting is amended by replacing the figure “128” with “140”. This change, effective September 22, 2025, raises the taxable value and, consequently, the GST liability on these activities. Gaming businesses must adjust their pricing and accounting systems to reflect this higher tax burden.

2. Input Service Distributor (ISD) Credit (Rule 39(1A)) 📜

This amendment has a retrospective effect from April 1, 2025. It expands the scope of an ISD’s credit distribution to include IGST paid under the reverse charge mechanism (RCM), such as on import of services. This change helps multi-location businesses fully utilize IGST credits that were previously ambiguous to distribute, thereby preventing credit loss.

3. Provisional Refund Process (Rule 91(2)) 💸

Effective October 1, 2025, this rule mandates a fast-track provisional refund process. The proper officer must now issue a provisional refund order in Form GST RFD-04 within seven days of the refund claim’s acknowledgment. This is a significant relief for exporters and businesses with genuine claims, as it improves cash flow. The new rule is system-driven and removes the need for revalidation of the provisional order, while allowing officers to deny provisional refunds for high-risk claims with proper justification.

4. Appellate Tribunal Appeal Process (Rules 110 & 111)

These changes, effective September 22, 2025, streamline the appeal and application process for the newly operational GST Appellate Tribunals. The introduction of Form GST APL-02A (with Part A for provisional and Part B for final acknowledgment) standardizes the electronic filing procedure. A notable simplification is the shift to “self-attested” copies of documents instead of certified ones, reducing the procedural burden on taxpayers.

5. Single-Member Bench for Appeals (Rule 110A) 👨‍⚖️

This new rule, effective September 22, 2025, allows for the disposal of non-legal, fact-based appeals by a single-member bench of the Tribunal. To qualify for a single-member bench, the total tax, interest, or penalty in dispute must not exceed ₹50 lakh. This is intended to expedite the resolution of smaller, less complex cases while ensuring that significant legal issues are heard by a regular two-member bench.

6. Summary of Tribunal Order (Rule 113(2))

Effective September 22, 2025, this amendment requires the Tribunal to issue a summary of its order in a new standardized Form GST APL-04A. This form will clearly state the final demand confirmed by the Tribunal, providing a concise and unambiguous document for taxpayers and tax officers to use for compliance and enforcement.

7. GSTR-9 (Annual Return) Amendments 📝

Applicable from Financial Year 2024-25 onwards, the instructions for FORM GSTR-9 have been updated to provide a more granular breakdown of Input Tax Credit (ITC). New lines have been added to distinguish between current-year ITC and prior-year ITC claimed in the current year. The reporting of ITC reversals is also made more specific, with separate entries for reversals under Rule 37A and Rule 38, enhancing transparency and alignment with a taxpayer’s GST returns and system-generated data.