What Changes Does the Gujarat Ordinance Bring to GST Law?

Gandhinagar, June 18 (NationPress) The Bhupendra Patel-led government has enacted the Gujarat Goods and Services Tax (Second Amendment) Ordinance, 2025, which introduces pivotal modifications to the Gujarat GST Act, 2017.

This initiative aims to align the state's indirect tax structure with the recent changes brought forth by the Finance Act, 2025, as recommended during the 55th GST Council meeting.

Since the state legislature is currently not in session, the ordinance was enacted under Article 213 of the Constitution, facilitating urgent legislative updates. Notably, a new Section 148A has been introduced, granting the government authority to implement a track-and-trace mechanism for specific categories of goods.

This innovative system mandates that certain items bear unique identification markings, enabling real-time electronic tracking throughout the supply chain. To enforce compliance, a newly added Section 122B stipulates severe penalties for offenders — either Rs 1 lakh or 10 percent of the tax owed, whichever is higher. This measure is anticipated to enhance supply chain transparency and serve as a deterrent against tax evasion.

Moreover, the ordinance brings forth technical and procedural changes in critical areas of the Act, such as adjustments to Input Tax Credit (ITC) regulations, credit note provisions, appeals, and several definitional clauses.

Amendments have also been made to Sections 2, 12, 13, 17, 20, 34, 38, 39, 107, 112, and Schedule III of the Act, with some changes having retrospective implications from July 1, 2017, when GST was implemented nationwide.

Officials assert that these amendments are part of a larger strategy to harmonize state and central GST regulations, mitigate litigation, and enhance administrative efficiency.

The ordinance will remain in effect until it receives approval from the Gujarat Legislative Assembly in its next session.

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

By rolling out a track-and-trace mechanism and enforcing electronic traceability for certain goods, the ordinance aims to combat tax evasion, improve supply chain transparency, and modernize compliance processes.

Additionally, the retrospective amendments and updates to key sections streamline procedures related to input tax credit, appeals, and credit notes, ultimately enhancing administrative efficiency and minimizing disputes, making it a vital step in fortifying Gujarat's tax governance.