GST WEEKLY UPDATE :30/2025-26 (26.10.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1.    A Major Leap in Ease of Doing Business: GST registration within 3 days:

Beginning November 1, 2025, India will usher in a new era of tax compliance with the introduction of a Simplified GST Registration System—a key reform under the government’s GST 2.0 package. This initiative promises to significantly reduce delays and human intervention by ensuring automatic approvals within three working days for most new applicants.

The reform reflects the government’s commitment to ease of doing business, transparency, and data-driven governance, marking a pivotal shift from bureaucratic discretion to systemic efficiency.

Key Features of the New Framework

Under the new framework, automatic GST registration will be granted in two specific cases:

1. System-identified applicants based on risk and data analytics, ensuring that trustworthy applicants are not held up unnecessarily.
2. Self-assessed applicants whose estimated monthly output tax liability does not exceed ₹2.5 lakh.

The Finance Ministry estimates that approximately 96% of all new GST applicants will qualify for this simplified approval route, reducing administrative bottlenecks and accelerating business onboarding.

Government’s Vision: Efficiency with Empathy

Finance Minister Nirmala Sitharaman emphasized that this reform signifies a shift in governance focus—from policy formulation to effective on-ground execution. The vision for GST 2.0 is one where systems function “by design, not by discretion.”

The new model encourages trust-based compliance, blending facilitation with firmness. While the system is designed to treat taxpayers with dignity, it remains vigilant against tax evasion and fraudulent practices.

Conclusion

The introduction of the Simplified GST Registration System is more than just a procedural change—it represents a philosophical shift in how the state engages with businesses. By prioritizing automation, transparency, and taxpayer dignity, India is reinforcing its position as a progressive and compliance-friendly economy.

As the reform takes effect from November 1, 2025, it is poised to become a milestone in the ongoing evolution of GST, making it simpler, faster, and fairer for millions of taxpayers nationwide.

2. CBIC Notifies Revised Definition of ‘Nominated Agency’ for Import of Precious Metals under GST:

Revising the definition of the term “Nominated Agency” under the Goods and Services Tax (GST). The amendment, effective from November 1, 2025, seeks to align the GST framework with corresponding provisions under the Customs Notification No. 45/2025–Customs, governing the import of gold, silver, and platinum.

List of Nominated Agencies (Effective from November 1, 2025)

Impact and Implications

The redefinition of “Nominated Agency” brings regulatory clarity and harmonization between GST and Customs frameworks. It also ensures that only authorized and monitored entities can import precious metals under concessional duty regimes, thereby enhancing transparency, compliance, and traceability in the bullion supply chain.

Conclusion

This revision marks a significant step toward synchronized policy design between indirect tax laws. Effective November 1, 2025, the move is expected to streamline operations for the bullion industry while strengthening regulatory oversight under both GST and Customs frameworks.

3. Important AAR:

(i) AAAR On ITC Allowed on Capital Goods for Power Transmission Installed Outside Factory Premises:

(Applicant – Elixir Industries Private Limited)

Whether ITC is admissible on capital goods such as wires, cables, and electrical equipment installed outside the factory and transferred to GETCO for maintenance, or whether such ITC is blocked under Section 17(5) of the CGST Act.

Held:

The Gujarat AAAR upheld the AAR’s ruling and allowed ITC, holding that:

• The Respondent met all conditions under Section 16 of the CGST Act for availing ITC (valid invoice, receipt of goods/services, tax payment, return filing).
• Assets like wires, cables, and feeder bays were plant and machinery, not immovable property, as they were not permanently affixed and could be removed for maintenance.
• The exclusion under Section 17(5) for land, building, civil structures, or pipelines laid outside the factory did not apply.
• CBIC Circular No. 219/13/2024-GST (June 26, 2024)—clarifying ITC eligibility on ducts/manholes in optical fiber projects—supported the admissibility of ITC here.
• The transfer to GETCO was only for maintenance and did not affect eligibility for ITC. 

Result: Revenue’s appeal rejected; ITC admissible to Elixir Industries Pvt. Ltd. 

Key Takeaway:

Capital goods used for power transmission infrastructure, even when installed outside factory premises, qualify as plant and machinery eligible for ITC if used in the course of business and not permanently affixed to earth. 

(ii) AAAR On ITC Not Allowed on Expenses Incurred for Buyback of Shares:

(Applicant – Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC))

Whether ITC can be claimed on expenses incurred for buyback of shares undertaken in the course of business.

Held:

The Gujarat AAAR upheld the AAR’s ruling disallowing ITC, observing that:

• Shares are securities as per Section 2(h) of the Securities Contracts (Regulation) Act, 1956, and are neither goods nor services under Sections 2(52) and 2(102) of the CGST Act.
• Transactions in securities lie outside GST ambit; hence, no ITC can be availed on related expenses.
• Although buyback is a corporate activity in the course of business, it does not qualify as a taxable supply under GST.
• Under Sections 17(2) and 17(3), ITC attributable to exempt supplies—such as securities—is to be reversed. 

Result: ITC disallowed; appeal dismissed.

Key Takeaway:

Expenses related to share buyback or securities transactions, even if incurred for business purposes, are not eligible for ITC since securities fall outside the GST framework.

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.