Indirect Tax News Letter- November 2025

 

GST Calendar –Compliances for the month of November ’2025

 

Nature of Compliances	Due Date
GSTR-7 (Tax Deducted at Source ‘TDS’)	December 10, 2025
GSTR-8 (Tax Collected at Source ‘TCS’)	December 10, 2025
GSTR-1	December 11, 2025
IFF- Invoice furnishing facility (Availing QRMP)	December 13, 2025
GSTR-6 Input Service Distributor	December 13, 2025
GSTR-2B (Auto Generated Statement)	December 14, 2025
GSTR-3B	December 20, 2025
GSTR-5 (Non-Resident Taxable Person)	December 20, 2025
GSTR-5A (OIDAR Service Provider)	December 20, 2025
PMT-06 (who have opted for QRMP scheme)	December 25, 2025

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GST Update – November 2025 

 

1. CESTAT to move fully to e-filing from 1 January 2026

The Tribunal is transitioning to a complete digital filing architecture. Every appeal—new or pending—will have to be lodged and managed online. Even documents earlier filed in physical form must be uploaded on the portal at least a week prior to final hearing. This marks a decisive move toward eliminating paper-based processes in indirect tax litigation.

2. Annual GST compliances for FY 2024–25

GSTR-9 and GSTR-9C are now live on the portal. GSTN has issued detailed FAQs to resolve practical issues around reporting, audit adjustments, and validation errors.

3. Circular 253/10/2025

The Government has withdrawn the earlier requirement mandating a Chartered Accountant’s certificate or recipient’s undertaking confirming reversal of input tax credit against a credit note issued by the supplier. Consequently, suppliers may now reduce their tax liability on issuance of a credit note without needing such external confirmation, simplifying compliance and eliminating an additional procedural step.

Union of India v. SICPA India Pvt. Ltd. – Sikkim High Court

1. Facts

The assesse, SICPA India Pvt. Ltd., had discontinued its business operations in the State of Sikkim. Upon closure, the assesse was left with a sizeable balance of accumulated Input Tax Credit (ITC) in its electronic ledger. The assesse sought refund of this unutilized ITC, contending that since business activities had ceased, there was no possibility of utilizing the credit against future output tax. An earlier judgment of the same High Court had held that refund of accumulated ITC upon closure was permissible, even though the CGST Act does not expressly provide for such a refund category.

The Department challenged the earlier view, arguing that:

• ITC is not an unconditional entitlement;
• Refund can be granted only under the specific situations enumerated in Section 54 of the CGST Act;
• Closure of business does not fall under any statutory refund category.

The matter was placed before the High Court to re-examine the correctness of the earlier decision.

2. Issues

The decision turned on the following core questions:

• Whether a registered person who closes down its business has a statutory right to claim refund of accumulated ITC under the CGST Act.

• Whether accumulated ITC, left unutilized solely because business has ceased, can be refunded in the absence of explicit legislative sanction.

3. Held 

The Sikkim High Court held that a taxpayer whose business has ceased has no statutory right to seek refund of accumulated Input Tax Credit, as the CGST Act allows refund of unutilized ITC only in specifically enumerated situations such as zero-rated supplies or inverted duty structure, and closure of business is not one of them. ITC being a conditional concession meant solely to offset output tax, it cannot survive once taxable supplies cease; accordingly, any remaining ITC must be reversed, not refunded. The Court therefore overruled its earlier contrary decision, reiterating that refund provisions must be strictly construed, and no refund can be granted unless explicitly authorized by statute.

Hikal Ltd. v. Union of India – Bombay High Court

1. Facts

Hikal Ltd. was subjected to proceedings initiated under Rule 96(10) of the CGST Rules, 2017, which at the relevant time imposed restrictions on exporters claiming IGST refunds where they had availed certain benefits under other export incentive schemes. In the midst of these proceedings, Rule 96(10) was omitted by the Government without incorporating any savings clause preserving pending actions.

Despite the omission, the Department continued to pursue action against Hikal Ltd. under the deleted rule, contending that the omission did not nullify past liabilities or ongoing proceedings. The assessee challenged this continuance, arguing that once the rule stood deleted without savings, it must be treated as though it never existed, and no authority could sustain proceedings founded upon it.

Thus, the dispute reached the Bombay High Court to determine the effect of the deletion of Rule 96(10) on pending proceedings.

2. Issues

Whether the omission of Rule 96(10) of the CGST Rules, without a savings clause, results in automatic termination of all pending proceedings initiated under that rule. Whether a deleted rule can continue to operate for past periods in the absence of explicit statutory preservation of liabilities. Whether ongoing actions against Hikal Ltd., premised solely on Rule 96(10), were legally sustainable post-omission.

3. Held

The Bombay High Court held that upon omission of Rule 96(10) without any savings clause, all pending proceedings that do not constitute “past and closed transactions” automatically lapse, and the deleted rule must be treated as if it never existed in the statute book. The Court applied the settled principle under Section 6 of the General Clauses Act, 1897, that unless the Legislature expressly preserves accrued liabilities, the repeal or omission of a provision entirely extinguishes the basis for continuing proceedings under it. Consequently, any action taken or continued against Hikal Ltd. solely under Rule 96(10) after its omission was rendered unsustainable in law. The Court therefore held that the Department could not proceed further, as the statutory foundation for such proceedings had ceased to exist.

Eagle Security & Personnel Services v. Union of India – Bombay High Court

1. Facts

The assessee, engaged in providing security and manpower services, supplied certain outward services that were liable to tax under the reverse charge mechanism (RCM) in the hands of the recipient. While computing its input tax credit (ITC) eligibility under Sections 17(2) and 17(3) of the CGST Act, the Department treated these RCM-taxable outward supplies as “exempt supplies”. This treatment reduced the proportion of eligible ITC available to the assessee. The assessee challenged the legislative scheme itself, contending that including RCM-taxable outward supplies within the definition of “exempt supplies” was arbitrary, ultra vires, and resulted in unjust denial of ITC.

2. Issues

Whether Sections 17(2) and 17(3) of the CGST Act, 2017—requiring inclusion of RCM-taxable outward supplies in the value of exempt supplies—are constitutionally valid. Whether denial of proportionate ITC on account of such inclusion violates the principles of neutrality, arbitrariness, or excessive legislative delegation. Whether ITC constitutes a vested right, thereby restricting the Legislature’s power to impose conditions or limitations on its availment.

3. Held

The Bombay High Court upheld the validity of Sections 17(2) and 17(3), holding that ITC is a conditional statutory benefit, not an absolute right, and the Legislature is empowered to determine the circumstances in which ITC may be restricted or denied. Including RCM-taxable outward supplies within “exempt supplies” for apportionment of credit was found neither arbitrary nor unconstitutional, as it reflected a deliberate policy choice to prevent unintended credit flow where the supplier bears no output tax liability. The Court emphasized the limited scope of judicial review over economic and tax policy, and concluded that the impugned provisions were rational, consistent with GST’s architecture, and did not warrant interference.