Ministry of Finance, through Notification No. 16/2025 – Central Tax dated 17 September 2025, has appointed 1 October 2025 as the date for bringing into effect several amendments to the Central Goods and Services Tax Act, 2017, as introduced by the Finance Act, 2025. Key changes include revisions in definitions and clarifications. Section 2 has been amended to expand the scope of “taxable supply” by linking it to the Integrated GST Act, to clarify “local fund” and “municipal fund” within the definition of government entities, and to insert a new definition of “unique identification marking” for goods. Provisions relating to place of supply under sections 12 and 13 have been amended by omitting sub-section (4). Section 17(5) has been modified to substitute “plant or machinery” with “plant and machinery,” applicable retrospectively from July 1, 2017, to settle interpretational disputes. Section 34 has been amended to restrict tax reduction through credit notes unless corresponding input tax credit is reversed or tax incidence has not been passed on. Further amendments include changes in return filing provisions under sections 38 and 39, revised pre-deposit requirements for penalty-related appeals under sections 107 and 112, and insertion of new penalty provisions under section 122B. Section 148A introduces mandatory unique identification marking for specified goods, enabling electronic tracking. Schedule III has been updated retrospectively to cover supply of goods warehoused in SEZs and FTWZs before clearance. Section 134 bars refunds of taxes already collected on supplies retrospectively covered under the amendments.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS)
Notifications No. 16/2025–Central Tax | Dated:17th September, 2025
S.O. 4206(E).— In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2025 (7 of 2025), the Central Government hereby appoints the 1st day of October, 2025, as the date on which the provisions of clauses (ii) and (iii) of section 121, sections 122 to 124 and sections 126 to 134 of the said Act, shall come into force.
[F. No. CBIC-20001/2/2025-GST]
RAUSHAN KUMAR, Under Secy.
**
EXTRACT OF RELEVANT SECTIONS OF Finance Act, 2025
121. In the Central Goods and Services Tax Act, 2017 (hereinafter referred as the Central Goods and Services Tax Act), in section 2,––
(i) in clause (61), after the word and figure “section 9”, the words, brackets and figures “of this Act or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017” shall be inserted with effect from the 1st day of April, 2025;
(ii) in clause (69),––
(a) in sub-clause (c), after the words “management of a municipal”, the word “fund” shall be inserted;
(b) after sub-clause (c), the following Explanation shall be inserted, namely:––
‘Explanation.––For the purposes of this sub-clause—
(a) “local fund” means any fund under the control or management of an authority of a local self-government established for discharging civic functions in relation to a Panchayat area and vested by law with the powers to levy, collect and appropriate any tax, duty, toll, cess or fee, by
whatever name called;
(b) “municipal fund” means any fund under the control or management of an authority of a local self-government established for discharging civic functions in relation to a Metropolitan area or Municipal area and vested by law with the powers to levy, collect and appropriate any tax, duty, toll, cess or fee, by whatever name called;’;
(iii) after clause (116), the following clause shall be inserted, namely:––
‘(116A) “unique identification marking” means the unique identification marking referred to in clause (b) of sub-section (2) of section 148A and includes a digital stamp, digital mark or any other similar marking, which is unique, secure and non-removable;’.
122. In section 12 of the Central Goods and Services Tax Act, sub-section (4) shall be omitted.
123. In section 13 of the Central Goods and Services Tax Act, sub-section (4) shall be omitted.
124. In section 17 of the Central Goods and Services Tax Act, in sub-section (5), in clause (d),––
(i) for the words “plant or machinery”, the words “plant and machinery” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 2017;
(ii) the Explanation shall be numbered as Explanation 1 thereof, and after Explanation 1 as so numbered, the following Explanation shall be
inserted, namely:––
‘Explanation 2.––For the purposes of clause (d), it is hereby clarified that notwithstanding anything to the contrary contained in any judgment, decree or order of any court, tribunal, or other authority, any reference to “plant or machinery” shall be construed and shall always be deemed to have been construed as a reference to “plant and machinery”;’.
126. In section 34 of the Central Goods and Services Tax Act, in sub-section (2), for the proviso, the following proviso shall be substituted, namely:––
“Provided that no reduction in output tax liability of the supplier shall be permitted, if the––
(i) input tax credit as is attributable to such a credit note, if availed, has not been reversed by the recipient, where such recipient is a
registered person; or
(ii) incidence of tax on such supply has been passed on to any other person, in other cases.”.
127. In section 38 of the Central Goods and Services Tax Act,––
(i) in sub-section (1), for the words “an auto-generated statement”, the words “a statement” shall be substituted;
(ii) in sub-section (2),––
(a) for the words “auto-generated statement under”, the words “statement referred in” shall be substituted;
(b) in clause (a), the word “and” shall be omitted;
(c) in clause (b), after the words “by the recipient,”, the word “including” shall be inserted;
(d) after clause (b), the following clause shall be inserted, namely:—
“(c) such other details as may be prescribed.”.
128. In section 39 of the Central Goods and Services Tax Act, in sub-section (1), for the words “and within such time”, the words “within such time, and subject to such conditions and restrictions” shall be substituted.
129. In section 107 of the Central Goods and Services Tax Act, in sub-section (6), for the proviso, the following proviso shall be substituted, namely:––
“Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty has been paid by the appellant.”.
130. In section 112 of the Central Goods and Services Tax Act, in sub-section (8), the following proviso shall be inserted, namely:––
“Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 107 has been paid by the appellant.”.
131. After section 122A of the Central Goods and Services Tax Act, the following section shall be inserted, namely:—
“122B. Notwithstanding anything contained in this Act, where any person referred to in clause (b) of sub-section (1) of section 148A acts in
contravention of the provisions of the said section, he shall, in addition to any penalty under Chapter XV or the provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees or ten per cent. of the tax payable on such goods, whichever is higher.”.
132. After section 148 of the Central Goods and Services Tax Act, the following section shall be inserted, namely:––
“148A. (1) The Government may, on the recommendations of the Council, by notification, specify,—
(a) the goods;
(b) persons or class of persons who are in possession or deal with such goods, to which the provisions of this section shall apply.
(2) The Government may, in respect of the goods referred to in clause (a) of sub-section (1),––
(a) provide a system for enabling affixation of unique identification marking and for electronic storage and access of information contained
therein, through such persons, as may be prescribed; and
(b) prescribe the unique identification marking for such goods, including the information to be recorded therein.
(3) The persons referred to in sub-section (1), shall,––
(a) affix on the said goods or packages thereof, a unique identification marking, containing such information and in such manner;
(b) furnish such information and details within such time and maintain such records or documents, in such form and manner;
(c) furnish details of the machinery installed in the place of business of manufacture of such goods, including the identification, capacity, duration of operation and such other details or information, within such time and in such form and manner;
(d) pay such amount in relation to the system referred to in sub-section (2), as may be prescribed.”.
133. In Schedule III of the Central Goods and Services Tax Act,––
(i) in paragraph 8, after clause (a), the following clause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of July, 2017, namely:––
“(aa) Supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person before clearance for
exports or to the Domestic Tariff Area;”;
(ii) in Explanation 2, after the words “For the purposes of”, the words, brackets and letter “clause (a) of” shall be inserted and shall be deemed to have been inserted with effect from the 1st day of July, 2017;
(iii) after Explanation 2, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of
July, 2017, namely:––
“Explanation 3.––For the purposes of clause (aa) of paragraph 8, the expressions “Special Economic Zone”, “Free Trade Warehousing
Zone” and “Domestic Tariff Area” shall have the same meanings respectively as assigned to them in section 2 of the Special Economic
Zones Act, 2005.”.
134. No refund shall be made of all such tax which has been collected, but which would not have been so collected, had section 133 been in force at all material times
