The Government of Gujarat, on 12 June 2025, promulgated the Gujarat Goods and Services Tax (Second Amendment) Ordinance, 2025 to align the state's GST framework with recent amendments to the Central GST Act. The Ordinance introduces a track-and-trace mechanism for specified goods and updates provisions relating to input tax credit, appeals, and transactions involving Special Economic Zones and Free Trade Warehousing Zones.
Background
State GST Acts are periodically amended to maintain parity with the Central Goods and Services Tax Act, 2017, ensuring uniformity in the indirect tax framework across India. The Gujarat GST (Second Amendment) Ordinance, 2025 brings the state legislation in line with amendments approved by the GST Council in its recent meetings. The use of an ordinance rather than a legislative amendment reflects the urgency of these changes, particularly the retrospective provisions dating back to the inception of the GST regime on 1 July 2017.
Gujarat is among the first states to implement these harmonising amendments through the ordinance route, reflecting the state's proactive approach to tax administration reform.
Key Provisions
The Ordinance introduces the following amendments to the Gujarat GST Act, 2017:
Track-and-trace mechanism: A new framework requiring electronic tracking of movement for certain categories of goods. This provision empowers tax authorities to mandate unique identification markers on specified products to prevent evasion and counterfeiting. Non-compliance attracts penalties as specified in the Ordinance.
Input tax credit revisions: The Ordinance amends the conditions and timelines for availing input tax credit, aligning them with the Central Act's updated provisions. This includes stricter documentation requirements and reconciliation timelines.
Appeal process modifications: Changes to the appellate framework introduce updated pre-deposit requirements and procedural timelines for GST appeals, bringing them in conformity with Central amendments.
SEZ and FTWZ transactions: Updated provisions governing the treatment of supplies to and from Special Economic Zones and Free Trade Warehousing Zones, clarifying the zero-rating mechanism and refund procedures.
Retrospective application: Certain amendments have been applied retrospectively from 1 July 2017, the date of GST implementation. This is intended to regularise assessments and provide clarity on disputed positions that have arisen since the GST rollout.
Implications for Practitioners
The retrospective amendments are the most immediately consequential aspect of this Ordinance. Tax practitioners advising clients with pending assessments or disputes before the Gujarat GST authorities should review whether these retrospective provisions favourably or adversely affect their positions. Where amendments regularise a previously disputed practice, applications for rectification or refund may become viable.
The track-and-trace mechanism signals the direction of GST enforcement going forward. Businesses dealing in goods likely to be specified under this provision — potentially including tobacco, pharmaceuticals, and other high-evasion-risk categories — should begin evaluating their supply chain readiness for electronic tracking requirements.
The alignment between Central and State GST provisions also means that judicial precedent interpreting the Central Act's amended provisions will be directly applicable in Gujarat.