NOTIFICATION NO. 18/2025 – CENTRAL TAX, Dated 31-10-2025
1. Background
The Central Board of Indirect Taxes and Customs (CBIC) has issued the Central Goods and Services Tax (Fourth Amendment) Rules, 2025, introducing a new Rule 14A to the CGST Rules, 2017.
This amendment provides a simplified registration mechanism for taxpayers with lower monthly output tax liabilities. The reform is aimed at:
- Streamlining the GST registration process,
- Expanding the taxpayer base, and
- Promoting voluntary compliance among small businesses and service providers.
2. Key Provision – Optional Registration Based on Output Tax Liability
2.1 Introduction of Rule 14A
Under Rule 14A, taxpayers whose monthly output tax liability does not exceed the prescribed threshold can now voluntarily obtain GST registration.
2.2 Threshold Limit
The specified threshold for availing this option is ₹2.5 lakh per month.
This limit will be calculated on the total output tax liability arising from supplies made to registered persons, including the following components:
- Central Goods and Services Tax (CGST)
- State Goods and Services Tax (SGST)
- Union Territory Goods and Services Tax (UTGST)
- Integrated Goods and Services Tax (IGST)
- Compensation Cess, where applicable
2.3 Beneficiaries
This optional registration particularly benefits small-scale suppliers who primarily engage in B2B transactions, enabling them to register under GST even if their aggregate turnover is below the limits prescribed under Section 22 of the CGST Act.
3. Faster Registration Approval Timeline
In a move to improve taxpayer experience, the CBIC has announced that registration applications filed under Rule 14A will be approved within three working days from the date of submission.
This is a significant reduction from earlier timelines, promoting:
- Faster onboarding of new taxpayers, and
- Improved compliance efficiency within the GST ecosystem.
4. Amendments in GST Registration Forms
To operationalise the new rule, several changes have been made to the GST registration forms, ensuring a seamless application process on the GST portal.
5. Key Modifications
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Form GST REG-01 (Application for Registration):
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- Updated to include a new field for declaring monthly output tax liability.
- Enables applicants to opt for registration under Rule 14A directly.
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Form GST REG-06 (Certificate of Registration) – Updated format to reflect registration granted under Rule 14A.
These updates ensure clarity and transparency for applicants during registration and post-registration verification.
6. Objective of the Amendment
The introduction of Rule 14A aligns with the Government’s broader vision of ease of doing business and aims to achieve the following objectives:
- Simplify voluntary registration for small and micro enterprises.
- Reduce compliance burdens for low-volume taxpayers.
- Encourage formalisation of B2B suppliers who may otherwise remain outside the GST net.
- Strengthen tax transparency and ensure a cleaner input tax credit (ITC) chain.
By widening access to voluntary registration, the amendment promotes better credit flow within the supply chain, enhancing trust between suppliers and buyers.
7. Expected Impact
The implementation of Rule 14A is expected to yield the following benefits:
- Higher Participation – More small businesses will join the GST system, broadening the taxpayer base.
- Efficient Credit Flow – Registered buyers will experience smoother input tax credit availment from small suppliers.
- Reduced Delays – Quicker approval timelines will ensure timely activation of new GSTINs.
- Enhanced Compliance Monitoring – The reform will help tax authorities maintain real-time visibility of smaller economic participants.
8. Conclusion
The insertion of Rule 14A under the CGST Rules, 2017 marks an important step toward simplified GST governance.
By:
- Setting a ₹2.5 lakh monthly output tax threshold,
- Ensuring registration approval within three working days, and
- Updating registration forms for easy online application,
the CBIC has reinforced its commitment to ease of doing business, voluntary compliance, and inclusive participation in the GST regime.
This amendment is a progressive step toward a more efficient, transparent, and accessible tax administration framework for India’s small business ecosystem.
