Gujarat govt brings ordinance to align state GST law with Centre's 2025 amendments

The move seeks to synchronise the state's indirect tax framework with recent amendments enacted by the Finance Act, 2025, following recommendations of the 55th GST Council meeting.

As the state legislature is not in session, the ordinance was promulgated under Article 213 of the Constitution, allowing the state to push through urgent legislative updates. One of the standout provisions is the introduction of a new Section 148A, which empowers the government to implement a track-and-trace mechanism for certain categories of goods.

This system will require specific items to carry unique identification markings and allow for real-time electronic monitoring across the supply chain. To ensure compliance, a newly inserted Section 122B lays out stringent penalties for violators -- Rs 1 lakh or 10 per cent of the tax due, whichever is greater. The measure is expected to boost supply chain transparency and act as a deterrent to tax evasion.

Apart from this, the ordinance introduces technical and procedural updates to key areas of the Act. These include modifications to Input Tax Credit (ITC) rules, credit note regulations, appeals, and several definitional clauses.

Amendments have been made to Sections 2, 12, 13, 17, 20, 34, 38, 39, 107, 112, and Schedule III of the Act. In some cases, the changes carry a retrospective effect from July 1, 2017, the date GST was rolled out nationwide.

Officials say the amendments are part of a broader effort to harmonise state and central GST provisions, reduce litigation, and improve administrative efficiency.

The ordinance will remain in effect until it is ratified by the Gujarat Legislative Assembly in the next session.

The Gujarat GST (Second Amendment) Ordinance, 2025, is significant as it aligns the state’s tax framework with national GST reforms introduced by the Finance Act, 2025, ensuring legal uniformity and operational consistency across jurisdictions.

By introducing a track-and-trace mechanism for certain goods and enforcing electronic traceability, the ordinance aims to curb tax evasion, boost supply chain transparency, and modernise compliance systems.

Additionally, retrospective amendments and updates to key sections streamline procedures related to input tax credit, appeals, and credit notes, enhancing administrative efficiency and reducing disputes, making it a crucial step in strengthening Gujarat’s tax governance.