GST WEEKLY UPDATE :32/2025-26 (09.11.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar!!

1.    Deadline Alert: Amend GSTR-1 for FY 24-25 by November 11th!

If you’ve filed your GSTR-1 for FY 24-25 with incorrect B2B sales details, now’s the time to amend it. The last date to make these amendments is November 11, 2025. This deadline is crucial because the buyer needs to see the correct ITC reflected in their GSTR-2B by November 14, 2025, to claim it in their GSTR-3B.

Key Points:

– Amendment Deadline: November 11, 2025, for GSTR-1 amendments for FY 24-25.

– ITC Claim Deadline: November 30, 2025, to claim ITC in GSTR-3B for FY 24-25.

– GSTR-2B Reflection: Buyers need to see ITC reflected in GSTR-2B by November 14, 2025.

Why is this important?

– Ensures buyers can claim ITC on time.

– Avoids potential penalties and interest.

– Keeps your GST records up-to-date.

What to do?

– Log in to the GST portal and navigate to the ‘Returns’ section.

– Select the financial year and tax period for which you want to make amendments.

– File the amendment before November 11, 2025.

2. Deadline Alert: Amend GSTR-3B for FY 24-25 by November 20th!

       Once your monthly GSTR-3B (which summarizes outward supplies, tax liability, and ITC claimed) is filed for a tax period, it cannot be revised. For FY 2024-25 (i.e., period April 2024 to March 2025), the monthly return filed in October 2025 has been recognized as the last opportunity to make any amendments to sales or ITC entries for that year.

What kinds of corrections can be made:

You may use the October 2025 GSTR-3B (or the returns until its filing date) to rectify items such as:

• Outward supplies (sales) that were omitted in the earlier returns of FY 2024-25 — e.g., invoices not included.
• ITC on inward supplies for FY 2024-25 which was eligible but not taken earlier — provided the supplier has reported the invoice in his GSTR-1 and the credit reflects in your GSTR-2B.
• Credit/debit notes or modifications in invoice values, tax amounts or GSTIN details relating to FY 2024-25.
• Reconciliation and adjustments per the system-generated GSTR 2B of your inward supplies for FY 2024-25, so you do not lose eligible ITC.

What you must ensure:

• Confirm that your suppliers have reported the relevant invoices (for your ITC claim) in their GSTR-1 so that your GSTR-2B captures the same. If their reporting is delayed, you need to coordinate with them so that it appears in the portal in time for your filing.
• For any omitted outward supply, ensure you declare it in the appropriate section of GSTR-3B for October 2025 (or correct classification) so that your turnover figures for FY 2024-25 are accurate.
• For ITC not previously claimed but eligible for FY 2024-25, ensure you claim it in the October 2025 GSTR-3B (subject to supplier and system conditions).
• Keep meticulous records of the corrections made: the nature of error/omission, invoice details, supplier GSTIN, and evidence of communication/correction. This is critical in case of later audit or enquiry.
• Acknowledge that after the October 2025 GSTR-3B filing window, you may lose the opportunity to claim these adjustments for FY 2024-25. The statutory cut-off for claiming ITC, and for amending outward supply details, is being strictly enforced.

3. Rule 43 of the CGST Rules, 2017 – ITC Reversal for Capital Goods:

Background:

Under the Goods and Services Tax (GST) regime, businesses are entitled to claim Input Tax Credit (ITC) on goods and services used in the course or furtherance of business. However, when such goods or services are used partly for taxable supplies and partly for exempt supplies or non-business purposes, a proportionate reversal of ITC becomes necessary.

Rule 43 of the Central Goods and Services Tax (CGST) Rules, 2017, specifically governs the manner of ITC reversal in relation to capital goods.

Scope of Rule 43:

Rule 43 deals exclusively with capital goods that are used for both taxable and exempt supplies.

• Rule 42 of the CGST Rules, on the other hand, deals with ITC apportionment and reversal for inputs and input services.
• Hence, while both rules address proportional ITC reversal, the nature of the goods/services they cover differs.

Comparison between Rule 42 and Rule 43:

Step-by-Step Calculation Process under Rule 43:

1. Identify the Total Input Tax (T)

Determine the total GST paid on the capital goods at the time of purchase.
For example, if a capital good is purchased with GST of ₹1,80,000, then:
T = ₹1,80,000

 2. Determine the Common Credit (Tc)

If the capital good is used for both taxable and exempt supplies:

• ITC attributable to taxable supplies → fully allowed
• ITC attributable to exempt supplies → not allowed
• Balance ITC → treated as common credit (Tc) to be apportioned over time. 

3. Useful Life of Capital Goods

The useful life of a capital good, for ITC reversal purposes, is considered as 60 months (5 years) from the date of invoice. 

4. Monthly Credit Calculation

Common ITC attributable per month is calculated as:
Monthly Credit = Tc ÷ 60

This represents the monthly portion of ITC to be adjusted for exempt supplies. 

5. ITC Reversal for Exempt Supplies

Each month, the ITC reversal amount is determined using the formula:

E = (Value of Exempt Supplies ÷ Total Turnover) × (Tc ÷ 60)

Where:

• E = Monthly ITC reversal amount
• Value of Exempt Supplies = Value of exempt supplies during the tax period
• Total Turnover = Total turnover during the same period

This formula ensures proportionate reversal of ITC corresponding to the extent of exempt supplies.

Illustrative Example

A Chartered Accountancy firm purchases a computer worth ₹1,00,000 plus ₹18,000 GST, which is used for both taxable and exempt activities.

• Total Input Tax (T) = ₹18,000
• Common Credit (Tc) = ₹18,000
• Monthly ITC = ₹18,000 ÷ 60 = ₹300 per month

If during a tax period, the proportion of exempt turnover to total turnover requires reversal, the firm will compute the monthly reversal using the formula under Rule 43.

Key Takeaways

• Rule 43 ensures fair and proportionate utilization of ITC on capital goods.
• ITC is spread over a notional useful life of 60 months.
• Monthly monitoring and reversal are required based on the share of exempt supplies.
• Proper documentation and computation are critical for GST compliance.

4. Important Judgements:

       (i) Hon’ble Supreme Court Decision Regarding Buyer Not Liable for Seller’s Default on Tax: (Commissioner (Trade & Tax), Delhi vs. Shanti Kiran India Pvt. Ltd.)

Background:

A buyer (Shanti Kiran India Pvt. Ltd.) claimed Input Tax Credit (ITC) under Delhi VAT.

The seller, however, didn’t deposit tax with the Govt. — so ITC was denied.

Core Issue:

Can ITC be denied to a genuine buyer just because the seller failed to pay tax?

Delhi High Court:

If the purchase is genuine and tax is paid to the seller →

 ITC cannot be denied merely due to seller’s default.

Supreme Court Ruling:

✅ SC agreed that a bona fide buyer should not suffer for seller’s fault.

* But directed the Department to verify the genuineness of transactions.

If found genuine → ITC must be allowed.

Principle Established:

Buyer can’t be treated as a defaulter if:

✔ Purchase is genuine

✔ Valid tax invoice exists

✔ Payment made via bank

❌ No evidence of collusion with seller

Why This Matters (Even Under GST):

If ITC is denied due to supplier default, submit:

🧾 Invoice |  E-way bill |  Bank proof | Supplier GST details

👉 Then the burden shifts back to the Department.

Key Takeaway:

Genuine Buyer ≠ Tax Evader

Tax law cannot punish the innocent for someone else’s fault.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(The author is a well known Chartered Accountant practicing in Direct and Indirect Taxes at Ahmedabad)