GST WEEKLY UPDATE :28/2025-26 (12.10.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Important Advisory on Invoice Management System (IMS): Date- October 8, 2025:

It has come to the attention of the GST Network (GSTN) that certain social media posts and messages are spreading incorrect information regarding changes in the GST return filing process effective from October 1, 2025. In light of this, GSTN has issued an important clarification to dispel misconceptions and ensure taxpayers are correctly informed.

No Change in Auto-Population of ITC

Taxpayers are advised that there is no change in the mechanism of auto-population of Input Tax Credit (ITC). The ITC details will continue to flow automatically from GSTR-2B to GSTR-3B as before.

The recent implementation of the Invoice Management System (IMS) does not alter this existing process. Hence, taxpayers are not required to make any manual interventions for ITC population in GSTR-3B.

GSTR-2B Generation – No Manual Action Required

• Automatic Generation: GSTR-2B will continue to be generated automatically on the 14th of every month, without any manual action or dependency on taxpayer inputs.
• Flexibility to Modify: Even after GSTR-2B is generated, taxpayers will be able to take actions in the IMS portal up to the filing of GSTR-3B.
• Regeneration Option: Based on actions taken in IMS, taxpayers can regenerate GSTR-2B if any changes are made before filing GSTR-3B.

This ensures continued ease and flexibility for taxpayers while maintaining data accuracy and consistency.

Credit Note Handling – New Flexibility from October 2025

Effective from the October 2025 tax period, certain enhancements are being introduced for better control over Credit Note processing:

• Option to Keep Pending: Recipient taxpayers will have the option to keep a Credit Note or related document pending for a specific period if needed.
• Partial Reversal Flexibility: Upon acceptance of a Credit Note, the recipient will have the flexibility to reduce ITC only to the extent availed, enabling manual adjustment of the reversal amount as per their records.

This feature aims to provide improved alignment between supplier and recipient records and to minimize reconciliation challenges.

Conclusion

The GSTN reiterates that the Invoice Management System (IMS) is being implemented to enhance transparency and efficiency, without disrupting existing filing mechanisms.
Taxpayers are urged to rely only on official communications from GSTN or CBIC and to disregard unverified information circulating online.

2. CBIC Clarifies: Importers Must Obtain GST Registration in States Where Warehouses Are Located:

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that importers or businesses maintaining warehouses in states different from their head office are required to obtain GST registration in those states as well. The clarification addresses queries raised by the Kirana Committee of Delhi, particularly concerning storage and supply of goods from third-party cold storage facilities.

Definition of ‘Place of Business’

The CBIC, referring to Section 2(85) of the CGST Act, 2017, emphasized that the term ‘place of business’ includes any location from where business operations are ordinarily carried out, such as warehouses, storage facilities, or godowns. Therefore, if goods are stored in a state different from the principal place of business and supplies are made from that location, such premises are deemed a place of business for GST purposes.

Mandatory Registration Under Section 22

Under Section 22 of the CGST Act, every person making taxable supplies from a State is liable to be registered in that State, provided the aggregate turnover exceeds the prescribed threshold.

Accordingly, if goods are stored and supplied from a warehouse situated in Haryana, while the head office is in Delhi, the entity must obtain GST registration in Haryana as well.

Third-Party Warehouses Also Covered

Importantly, CBIC clarified that the nature of ownership or operation of the warehouse—whether self-managed or run by a third-party cold storage operator—does not change the legal requirement.

If the supply of goods originates from such a warehouse, GST registration in that State becomes mandatory, and all provisions of the CGST Act will apply mutatis mutandis.

Treatment as Distinct Persons

CBIC reiterated that establishments of the same PAN in different States are treated as distinct taxable persons under GST. Consequently, any movement of goods from the head office (e.g., Delhi) to a warehouse (e.g., Haryana) shall be accompanied by a valid tax invoice and e-way bill.
Such transfer is considered a supply between distinct persons, and GST liability must be discharged accordingly.

Determination of Place of Supply

The place of supply for goods is the location where the movement terminates for delivery:

• Intra-State Supply: Movement and delivery within Haryana will attract CGST and SGST.
• Inter-State Supply: Movement from Haryana to another State will attract IGST.

GST on Cold Storage Services

The Board also clarified that cold storage services are categorized as services related to immovable property. Thus, the place of supply for such services will be the location of the storage facility. Consequently, CGST and SGST of the state where the warehouse is located will be applicable.

Key Takeaway

Businesses operating across multiple states must carefully assess their warehousing and supply chains to ensure GST compliance. Storing and supplying goods from another state, even through third-party facilities, creates a separate taxable presence, necessitating registration and appropriate tax reporting in that state.

3. AAR & Important Judgements:

(i) Delhi High court Judgement Regarding Educational Consultancy Services to Foreign Universities Qualify as ‘Export’, Not ‘Intermediary’; Refund Sustained

(Commissioner of Delhi Goods and Service Tax (DGST), Delhi v. Global Opportunities Private Limited [W.P.(C) 10189/2025])

Key Takeaways:

• The Delhi High Court held that consultancy services rendered by the assessee to foreign educational institutions (FEIs) for facilitating admissions of Indian students qualify as export of services under the IGST Act, and do not fall within the ambit of “intermediary” as defined under Section 2(13).

• The assessee provided educational consultancy services to Indian students and received commission from FEIs upon successful admissions. The Revenue contended that the assessee acted as an agent/intermediary for FEIs and was, therefore, not entitled to export benefits under Section 13(8)(b). 

Court’s Findings:

• Relying on Ernst & Young Ltd., K.C. Overseas Education Pvt. Ltd. (affirmed by the Supreme Court), and Oceanic Consultants Pvt. Ltd., the Court held that services rendered directly to foreign universities are independent consultancy services on a principal-to-principal basis.

• Merely promoting or representing the interests of FEIs does not make the consultant an intermediary, since there is no facilitation or arrangement of supply between two distinct parties.

• The Court concluded that the assessee functions as an independent service provider, and thus, the consultancy qualifies as export of services under the IGST framework. 

Verdict: Educational consultancy services provided to foreign universities are exports, not intermediary services. Refund of IGST is sustainable.

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.