On January 23, 2025, the Ministry of Finance issued Notification No. 07/2025 – Central Tax, amending the Central Goods and Services Tax (CGST) Rules, 2017. These amendments introduce key provisions to enhance compliance and streamline processes for specific taxpayers, especially those not required to formally register under the CGST Act but still obligated to make payments under it.
The core objective of these amendments is to ensure efficient tax compliance by enabling seamless payments for entities or individuals who are not required to register under GST but need to make tax payments. Additionally, the changes include updates for composition taxpayers and enhanced procedures for temporary registrations.
Key Amendments and Their Implications
1. Introduction of Rule 16A – Grant of Temporary Identification Number (TIN)
- Provision: Rule 16A enables the Proper Officer to issue a Temporary TIN to persons who are not required to register under the CGST Act but are obligated to make payments under it.
- Purpose: This provision ensures that such individuals or entities can comply with their tax obligations without formal registration. The Temporary TIN will be issued through an order in FORM GST REG-12.
Form: FORM GST REG-12
- Updated to reflect Temporary TIN details, including the taxpayer's personal information, reason for registration, and bank details.
2. Amendment to Rule 19 – Inclusion of FORM GST CMP-02
- Provision: Rule 19 now includes FORM GST CMP-02 for composition taxpayers, allowing them to notify their decision to opt into the Composition Scheme and initiate an amendment in their GST registration.
- Purpose: This simplifies the process for composition taxpayers to update their registration status.
Form: FORM GST CMP-02
- Used by composition taxpayers to intimate their decision to opt for the Composition Scheme.
3. Amendment to Rule 87 – Payment Facility for Temporary TIN Holders
- Provision: Rule 87(4) is amended to allow persons holding Temporary TIN to generate challans and make payments via the GST common portal.
- Purpose: This ensures that Temporary TIN holders can fulfill their payment obligations without delay, even before formal GST registration.
Before vs. After the Amendment
| Aspect | Before Amendment | After Amendment | Benefit to Taxpayer |
|---|---|---|---|
| Rule 16A – Temporary TIN | No provision for Temporary TIN | Rule 16A enables issuance of Temporary TIN for persons required to make payments under GST but not formally registered. | Ensures compliance for taxpayers without formal registration. |
| Rule 19 – Composition Taxpayer Intimation | Only FORM GST REG-10 applicable for registration amendments | Now includes FORM GST CMP-02 for composition taxpayers to update their registration status. | Simplifies updates for composition taxpayers opting for the Composition Scheme. |
| Rule 87 – Payment for TIN Holders | No mention of Temporary TIN holders | Rule 87(4) allows Temporary TIN holders to generate challans and make payments via the GST portal. | Facilitates payment for Temporary TIN holders without full registration. |
| FORM GST REG-12 | Used for formal registration | Updated to accommodate Temporary TIN issuance details. | Provides efficient tracking for taxpayers with Temporary TINs. |
| FORM GST CMP-02 | Not linked to registration amendments | Now linked in Rule 19, enabling composition taxpayers to update their GST registration. | Allows composition taxpayers to efficiently update their GST status. |
Purpose and Use of Key Forms
| Form | User | Purpose |
|---|---|---|
| FORM GST REG-12 | Temporary TIN holders | To document the issuance of Temporary TIN, capturing personal details, reason for registration, and bank information. |
| FORM GST CMP-02 | Composition taxpayers | To intimate the decision to opt for the Composition Scheme and trigger necessary amendments in GST registration. |
Conclusion
The amendments are made under Section 164 of the CGST Act, 2017, and reflect the recommendations of the GST Council. The introduction of Rule 16A and the updates to FORM GST REG-12 aim to improve tax compliance by allowing Temporary TINs and simplifying the process for composition taxpayers. These changes will streamline compliance for taxpayers, ensuring that they can meet their obligations with minimal disruption.
Taxpayers are advised to stay informed about these updates and ensure timely compliance as the changes come into effect.
