Overview of Recent GST Circulars and Official Directives
This article provides a summary of recent GST circulars and orders issued by the central tax department, detailing important clarifications and compliance updates. It covers topics such as the GST treatment of post-sale discounts, the authority structure for DGGI cases, and the use of Reference Numbers on GST portal communications instead of Document Identification Numbers. Further directives explain benefits under Section 128A of the CGST Act, revised GST rates for specific goods, conditional waivers for GSTR-9C late fees, GST applicability on various services, and the regularization of GST for co-insurance and reinsurance transactions.
📖 4 min read read🏷️ GST Circulars and Orders
Government entities issue Goods and Services Tax (GST) circulars to clarify rules or announce decisions to a wide audience. Conversely, official orders are released to implement immediate compliance requirements concerning specific issues. This article provides an overview of the most recent GST circulars and orders issued since the tax system's introduction.
Overview of Central Tax Circulars
| Notification Number | Date | Subject | Description |
|---|---|---|---|
| 251/08/2025 | 12-Sep-2025 | Clarification on various doubts related to treatment of secondary or post-sale discounts under GST | This circular clarifies the GST treatment of secondary or post-sale discounts. It states that reversing Input Tax Credit (ITC) is unnecessary when suppliers issue financial or commercial credit notes that do not reduce the original tax liability or transaction value. Post-sale discounts from manufacturers to dealers are not considered if the dealer operates on a principal-to-principal basis without an agreement between the manufacturer and the end customer. However, if such an agreement exists and the manufacturer funds a price reduction through credit notes to the dealer, this discount is viewed as an inducement and becomes part of the consideration for the dealer’s supply to the end customer. Additionally, general post-sale discounts do not apply to separate services provided by the dealer. GST is only payable when the dealer offers specific promotional or support services, such as advertising or co-branding, under a clear agreement with defined consideration. |
| 250/07/2025 | 24-Jun-2025 | Reviewing authority, Revisional Authority and Appellate Authority in respect of orders passed by Common Adjudicating Authority (CAA) for show cause notices issued by DGGI | This directive standardizes the authorities responsible for reviewing, revising, and appealing orders-in-original (O-I-Os) issued by Common Adjudicating Authorities (CAAs) in cases handled by the Directorate General of GST Intelligence (DGGI). For review and revision under Sections 107 and 108, the Principal Commissioner or Commissioner of Central Tax overseeing the CAA is designated. Appeals under Section 107 are directed to the Commissioner (Appeals) with territorial jurisdiction over the Principal Commissioner or Commissioner in charge of the CAA, as per Notification 02/2017-Central Tax. The Principal Commissioner or Commissioner under whom the CAA operates acts as the respondent authority for departmental representation and may authorize an officer to represent. The reviewing or revisional authority may request comments from the relevant DGGI formation before making a decision. |
| 249/06/2025 | 09-Jun-2025 | Generation and quoting of Document Identification Number(DIN) on any communication issued by the officers of the Central Board of Indirect Taxes and Customs (CBIC) to tax payers and other concerned persons | This circular addresses the requirement for Document Identification Numbers (DINs) on communications issued by the Central Board of Indirect Taxes and Customs (CBIC) through the GST common portal. It clarifies that communications generated and served via the GST common portal already include a verifiable Reference Number (RFN). This RFN can be validated on the portal to display details such as its date, the document date, module, communication type, and issuing office. Under Section 169(1)(d) of the CGST Act, summaries, notices, and orders must be served electronically. Therefore, because portal communications already bear an RFN, a separate DIN is not required, and RFN-bearing communications are considered valid. Previous guidance from Circulars 122/41/2019-GST and 128/47/2019-GST is updated accordingly. |
| 248/05/2025 | 27-Mar-2025 | Various issues related to availment of benefit of Section 128A of the CGST Act, 2017 | This directive addresses various aspects related to availing benefits under Section 128A of the CGST Act, 2017. Section 128A, coupled with Rule 164, offers relief for Section 73 demands for the financial years 2017–18 to 2019–20. It clarifies that tax paid through GSTR-3B before November 1, 2024, is eligible for the 128A benefit, even if paid before a notice or order, subject to verification. Payments must be processed through the electronic liability register, and this applies even when amounts were previously paid via GSTR-3B. For notices covering mixed periods, taxpayers should pay the portion for periods covered by Section 128A and then file Form SPL-01/SPL-02 to withdraw the appeal for that specific portion, allowing the appellate authority to proceed with the remaining period. Point 6 in the Table at para 4 of Circular 238/22/2024-GST is withdrawn to reflect this. Administrative instructions include issuing trade notices and reporting any implementation difficulties to the Board. |
| 247/2025 | 14/02/2025 | Clarification regarding GST rates & classification (goods) based on the 55th GST Council meeting recommendations | This clarification concerns GST rates and classification for various goods based on recommendations from the 55th GST Council meeting. Pepper of the genus Piper (green, white, or black) falls under HSN 0904 and is subject to 5% GST. Agriculturists supplying dried pepper or raisins from their plantations are exempt from GST and not required to register, provided the produce is from land cultivation. Ready-to-eat popcorn mixed with salt and spices is classified under HS 21069099, attracting 5% GST if not pre-packaged and labelled (S.No. 101A of Schedule I of N/N 1/2017-CT(Rate)), or 12% GST if pre-packaged and labelled (S.No. 46 of Schedule II of N/N 1/2017-CT(Rate)). Popcorn mixed with sugar is classified under HS 17049090 and attracts 18% GST. Fly ash bricks, aggregates, and blocks fall under HS 6815 with a 12% GST rate. Articles made of cement, concrete, or artificial stone (reinforced or not) are classified under HS 6810 and attract 18% GST. Autoclaved aerated concrete (AAC) blocks containing over 50% fly ash content are classified under HS 6815 and attract 12% GST. |
| 246/2025 | 30/01/2025 | Clarification on applicability of late fee for delay in furnishing of Form GSTR-9C | This circular clarifies the conditional waiver of late fees for delayed filing of Form GSTR-9C. The scheme limits late fees to delays associated with filing Form GSTR-9 (annual return), provided Form GSTR-9C (reconciliation statement) is submitted by March 31, 2025. Taxpayers who submitted Form GSTR-9 but failed to file Form GSTR-9C for the financial years 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, or 2022-23 are granted relief from late payment fees. However, no refund will be issued for late fees already paid for delayed GSTR-9C submissions for these financial years. |
| 245/2025 | 28/01/2025 | Clarifications regarding applicability of GST on certain services. | This circular clarifies the applicability of GST on various services. It addresses GST on penal charges levied by Regulated Entities (REs). It also confirms a GST exemption for RBI-regulated Payment Aggregators (PAs) for settlement amounts up to Rs. 2,000 in a single transaction via credit, debit, charge, or other payment card services. GST on research and development services provided by Government Entities against grants is regularized for the period July 1, 2017, to October 9, 2024, on an 'as is where is' basis. The Delhi Development Authority (DDA) cannot be considered a local authority under GST law. Furthermore, GST on a Reverse Charge Mechanism (RCM) basis for renting immovable property (excluding residential dwellings) by unregistered persons to registered persons under composition levy is regularized for the period October 10, 2024, to January 15, 2025, on an 'as is where is' basis. |
| 244/2025 | 28/01/2025 | Regularising payment of GST on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding /re-insurance commission deducted from the reinsurance premium paid by the insurer to the reinsurer. | This circular regularizes GST payments for specific insurance activities and transactions for the period July 1, 2017, to October 31, 2024, on an 'as is where is' basis. This includes the apportionment of co-insurance premiums by a lead insurer to a co-insurer for insurance services jointly provided to the insured in co-insurance agreements. It also covers services rendered by an insurer to a reinsurer, for which ceding commission or reinsurance commission is deducted from the reinsurance premium paid by the insurer to the reinsurer. |
Further Reading
Frequently Asked Questions
What is the primary difference between a GST circular and a GST order?
GST circulars typically provide clarifications or communicate decisions to a broad audience, while GST orders are issued for immediate compliance effect regarding specific matters requiring attention.
How do post-sale discounts impact GST liability according to recent clarifications?
The recent clarification states that Input Tax Credit (ITC) reversal is not needed for financial or commercial credit notes that don't reduce original tax liability. Discounts given by manufacturers to dealers are generally not considered unless there's an agreement with the end customer and the manufacturer funds the price reduction, making it part of the dealer’s consideration.
What is the significance of the Document Identification Number (DIN) or Reference Number (RFN) in GST communications?
Communications issued through the GST common portal now bear a verifiable Reference Number (RFN), which replaces the need for a separate Document Identification Number (DIN). The RFN can be validated on the portal, providing details of the communication.
Can taxpayers receive benefits under Section 128A of the CGST Act for past demands?
Yes, Section 128A, along with Rule 164, provides relief for Section 73 demands from FY 2017–18 to 2019–20. Tax paid via GSTR-3B before November 1, 2024, qualifies for this benefit, even if paid before a notice or order, subject to verification.
What are some key GST rate changes for goods like pepper, popcorn, and building materials?
Recent updates classify pepper under HSN 0904 at 5% GST. Ready-to-eat popcorn with salt/spices is generally 5% or 12%, while popcorn with sugar is 18%. Fly ash bricks and AAC blocks with over 50% fly ash are typically 12% GST, while other cement articles attract 18%.