Understanding Notification No. 09/2025 – Central Tax (Issued on 11th February 2025)

The Indian government has issued Notification No. 09/2025 – Central Tax to implement certain provisions of the Central Goods and Services Tax (Amendment) Rules, 2024. This notification outlines when specific rules will become effective. Below, we break it down in simple terms and explain the conditions before and after the notification with examples.

What Does Notification No. 09/2025 Say?

This notification, issued under Section 164 of the CGST Act, 2017, specifies two sets of rules that will come into effect on different dates:

S. No	Rules Implemented	Effective Date
1	Rules 2, 24, 27, and 32	11th February 2025
2	Rules 8, 37, and clause (ii) of Rule 38	1st April 2025

What Does This Mean in Simple Terms?

This notification does not introduce new laws but activates certain amendments made earlier in the GST (Amendment) Rules, 2024. These amendments modify the registration process, tax compliance, input tax credit (ITC), and other GST procedures.

Let’s break it down into two parts:

1️⃣ Changes Effective from 11th February 2025

These include modifications to Rules 2, 24, 27, and 32.

🔹 Rule 2: Definitions Updated

• Rule 2 generally deals with definitions under GST.
• This amendment likely introduces new terms or clarifies existing definitions to improve understanding and compliance.

📌 Before the Notification: Certain GST terms may have been vague or unclear.
📌 After the Notification: More precise definitions will help taxpayers follow GST rules correctly.

🔹 Rule 24: Revocation of GST Registration Simplified

• This rule deals with revocation of canceled GST registration.
• The amendment may simplify the process for businesses whose GST was canceled due to non-compliance.

📌 Before the Notification: Revoking a canceled GST required multiple approvals and long processing times.
📌 After the Notification: The process is expected to be faster and more straightforward.

✅ Example:
A business that failed to file GST returns for six months had its GST registration canceled suo moto (by the tax department). Before, revoking this cancellation required multiple appeals and high penalties. Now, the business may get an easier procedure to reactivate GST.

🔹 Rule 27: Changes in GST Registration Process

• Rule 27 governs the GST registration process, including verification and documentation.
• The amendment may introduce new conditions for obtaining GST registration.

📌 Before the Notification: The GST registration process may have been more relaxed, allowing fraudulent entities to misuse it.
📌 After the Notification: Stricter checks might be introduced to prevent fraud.

✅ Example:
Earlier, a trader could obtain GST registration with minimal verification. Now, the amendment may introduce biometric verification or enhanced scrutiny before approval.

🔹 Rule 32: Changes in GST Valuation for Certain Goods & Services

• Rule 32 defines special valuation rules for certain businesses, such as second-hand goods dealers, lotteries, and foreign exchange services.
• The amendment might modify how tax is calculated for these businesses.

📌 Before the Notification: Some businesses used special valuation methods that could lead to tax avoidance.
📌 After the Notification: The government may tighten tax calculations to ensure proper GST collection.

✅ Example:
A used car dealer earlier paid GST only on the profit margin. If the amendment changes this, the dealer may now have to pay GST on the full sale price instead of just the profit.

2️⃣ Changes Effective from 1st April 2025

These include modifications to Rules 8, 37, and clause (ii) of Rule 38.

🔹 Rule 8: Stricter Rules for GST Registration

• This rule governs how businesses apply for GST registration.
• The amendment may introduce new verification measures to prevent fake registrations.

📌 Before the Notification: Some businesses could obtain GST registration easily, even with fake details.
📌 After the Notification: New applicants may require additional verification (Aadhaar authentication, biometric check, etc.) before approval.

✅ Example:
A fraudster could earlier create a fake business and claim bogus ITC using fake invoices. With stricter registration rules, such fraud will be harder to execute.

🔹 Rule 37: Stricter Conditions for Input Tax Credit (ITC)

• Rule 37 ensures that ITC is available only if the supplier pays GST to the government.
• The amendment may impose new restrictions on ITC claims.

📌 Before the Notification: Businesses could claim ITC based on invoices, even if the supplier didn’t pay GST to the government.
📌 After the Notification: ITC can only be claimed if the supplier has filed returns and paid GST.

✅ Example:
A company buys goods worth ₹1 lakh + ₹18,000 GST but the seller does not deposit the ₹18,000 to the government. Before, the buyer could still claim ITC, but after the amendment, ITC will be blocked until the seller pays GST.

🔹 Rule 38 (Clause ii): Changes in Composition Scheme for Small Taxpayers

• Rule 38 deals with the composition scheme, which allows small businesses to pay GST at a fixed rate instead of on every sale.
• The amendment might introduce new restrictions or conditions.

📌 Before the Notification: Small businesses under ₹1.5 crore turnover could opt for composition scheme with minimal restrictions.
📌 After the Notification: New rules might require additional reporting or higher compliance.

✅ Example:
A small restaurant earlier paid 5% GST under the composition scheme. If the amendment increases compliance (like mandatory e-invoicing), they might need more documentation to continue under the scheme.

Conclusion: How Does Notification 09/2025 Impact You?

🔸 If you are applying for GST registration: Be ready for stricter verification from 1st April 2025.
🔸 If your GST was canceled suo moto: You may have an easier way to revoke it from 11th February 2025.
🔸 If you claim ITC: Ensure your suppliers file GST returns and pay taxes, or you won't get ITC after 1st April 2025.
🔸 If you deal in second-hand goods, lotteries, or forex: Expect changes in tax calculations from 11th February 2025.

This notification aims to tighten GST compliance, reduce fraud, and ensure fair tax collection. Businesses should stay updated and adjust their tax strategies accordingly! 🚀

Would you like a detailed guide on any specific rule? 😊