INTRODUCTION:

India’s GST compliance environment is undergoing a major upheaval as a result of two important amendments that will take effect on July 1, 2025.  Initially, following auto-population, the GSTR-3B report will be locked, preventing manual modification of figures extracted from the Invoice Furnishing Facility or GSTR-1.  The updated GSTR-1A form must now be used for any modifications.  Second, there is a strict three-year time limit that prevents returns that are more than three years past their due date from being viewed on the GST portal. 

Despite their seeming complexity, these reforms were long needed and essential.  By removing inconsistencies between outside supply and tax obligation data, a persistent problem that resulted in audit problems and fraud risks, the lock on GSTR-3B guarantees correctness and consistency.  By imposing the three-year limit, tax reporting gains much-needed discipline and finality and is shielded from data manipulation and unending backtracking.

These changes may appear to be just another layer of red tape at first, but they are actually a strong framework created with the interests of taxpayers in mind. These reforms make accuracy the norm rather than an option by standardizing filings, decreasing mismatches, and preventing false claims. Indeed, there is a learning curve, but in the end, these actions result in a GST system that is easier to understand, more equitable, and more straightforward for all parties.

STATUS QUO ANTE: 

Beginning in July 2025, the guidelines for filing GST returns will change, affecting all taxpayer segments.  Due to the changes, taxpayers must file their GST returns accurately and on time; otherwise, they will risk receiving GST notices and penalties. 

The Government of India created the GSTR-3B, a consolidated summary return of inward and outgoing supply, to ease the burden on companies who have just switched to the GST.

 It would be challenging for many small and medium-sized firms to file returns by the July 2017 deadlines because many of them have been employing manual accounting procedures.  As a result, tax payments between July 2017 and June 2018 will be made using the GSTR-3B, a straightforward form.^[1] Up until June 2025 returns (either quarterly or monthly), GSTR-3B can be modified to reflect any pre-filled data. 

There used to be no legal deadline for filing unfiled GST returns. Even for tax periods that were several years old, taxpayers, including dealers and businesses, were permitted to file GST returns. The GST portal permitted such late filings without a hard cutoff, but the only penalty was the imposition of late fees and interest.

GST COMPLIANCE AFTER THE JULY 2025 OVERHAUL:

• Notification that the auto-populated obligation in GSTR-3B cannot be edited

Starting in July 2025, the outgoing supplies and taxes listed in Table 3 of GSTR-3B (summary return) cannot be manually edited.  GSTR-1 (returns for details of outgoing supplies), GSTR-1A (returns for adjustment of GSTR-1 details), or IFF (month 1 and 2 sales reporting facility for quarterly filers) are examples of GST returns that often automatically populate these details. This new rule for filing GST returns is expected to increase the significance of GSTR-1A.  Any changes to the outgoing supplies and taxes on them that were previously reported in GSTR-1 or IFF should be made using GSTR-1A, with the exception of the recipient’s GSTIN.  Before submitting GSTR-3B for the same tax period, the taxpayer can add or modify tax liability details. (https://www.gst.gov.in/newsandupdates/read/606). 

• GST return has been barred on expiry of three years 

On June 7, 2025, the GST network released a second advise enforcing the rule that a GST return filed after three years from the due date is no longer eligible for submission.  This update will prevent taxpayers from filing GST returns after three years from the return’s due date.  We were informed of this change by the CBIC on October 1, 2023, and as of July 2025, the GSTN has activated this validation on the official GST portal. 

 On June 18, 2025, a follow-up advisory was released.  According to this guidance, the GSTN has advised taxpayers to file all outstanding GST returns by the deadline of July 31, 2025, which is the end of the three-year term. (https://www.gst.gov.in/newsandupdates/read/607 )

• E-way bill portal 2 launch:

According to the GSTN’s advice dated June 16, 2025, the NIC will introduce a second e-way bill portal, https://ewaybill2.gst.gov.in/, on July 1, 2025.  The goal is to guarantee real-time data synchronization and do away with reliance on a single site.  It indicates that the E-Way Bill 2 portal is made to instantly synchronize e-way bill information with the main site.^[2]

COMPLIANCE EVOLUTION:

The modifications point to a move toward a more automated and structured environment for GST compliance. Businesses must make sure their data is timely and precise across all GST forms because GSTR-3B is locked, and previous returns are time-barred.

There would be no opportunity for revisions later on because any errors or filing delays in GSTR-1 will be automatically carried over to GSTR-3B.  If changes are made after GSTR-2B is generated, which usually happens around the 14th of the month, it may impact buyers’ ability to claim ITC.

FINAL THOUGHTS:

Strengthening accuracy and accountability in tax compliance is the goal of the GST amendments, which go into effect in July 2025. The system now guards against abuse and retroactive modifications by locking GSTR-3B after auto-population and prohibiting return filing for longer than three years. By taking these actions, fraud risks are decreased and consistency is encouraged.

Companies now need to concentrate on accurate and timely filings because mistakes in GSTR-1 will have an immediate impact on GSTR-3B and cannot be corrected later. Simplified, automated, and disciplined compliance is the focus with real-time syncing through the new e-way bill portal.

Author: Shreya Bhatnagar

REFERENCES:

^[1] https://www.zoho.com/in/books/gst/how-to-file-gstr-3b.html

^[2] https://cleartax.in/s/gst-return-filing-rule-changes-from-july-2025 

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