Delhi & Manipur GST Amendment Bills 2025: Wider Tax Scope, State Tax on Alcohol Inputs, ITC Relief and Penalty Waivers [Read Notification]

The Delhi Goods and Services Tax (Amendment) Bill, 2025 was passed in the Delhi Assembly on August 7 after a heated exchange between Chief Minister Rekha Gupta and her predecessor Atishi.

In Manipur’s case, the Manipur Goods and Services Tax (Amendment) Bill, 2025 was cleared in the Lok Sabha with Union Finance Minister Nirmala Sitharaman stressing that the amendments were a “constitutional necessity” to protect the state’s revenue authority.

In Delhi, proceedings turned confrontational when Atishi called for a detailed discussion on the amendments.

Speaker Vijender Gupta said the previous AAP government never allowed such debates, while BJP MLA Kailash Gahlot called the bill “a mere formality”. Atishi termed this “an insult to the House”, alleging it favoured Special Economic Zones (SEZ) linked to allies of the BJP. Chief Minister Gupta countered that the GST Council had approved the provisions last year when Atishi was finance minister while accusing her of skipping meetings and neglecting central schemes.

In Parliament, Finance Minister Sitharaman explained that Manipur’s bill replaces the 2025 ordinance and enables the state to levy tax on un-denatured extra neutral alcohol (ENA) or rectified spirit used for alcoholic liquor manufacture, consequent to the GST Council’s October 2023 decisions.

Minister Sitharaman warned that if the bill was not allowed to pass in a timely manner, Manipur’s revenue would suffer since it would discredit the state’s authority to tax certain items.

Key Changes in the Delhi GST Amendment Bill 2025:

1. Inclusion of un-denatured ENA and rectified spirit under GST via amendment to section 9(1).
2. Insertion of section 11A to regularise non-levy or short-levy from general trade practices.
3. Redefinition of “Input Service Distributor” in section 2(61) to include reverse charge invoices.
4. Modification of time of supply rules where the recipient issues the invoice under reverse charge.
5. Phased commencement of provisions through notifications.
6. Schedule III clarifications for insurance: co-insurance premium apportionment and reinsurance commissions treated as neither goods nor services if tax is paid on full premium.
7. Restriction on refunds of tax paid or Input Tax Credit (ITC) reversed for transactions that, under the amended scope of supply have been absolved from tax.
8. Amendment to section 171 to limit fresh anti-profiteering requests and add explanations

Key Changes in the Manipur GST Amendment Bill 2025:

1. Inclusion of un-denatured ENA and rectified spirit under GST via amendment to section 9(1).
2. Insertion of section 11A for general trade practice-related relief.
3. Reverse charge time of supply clarification.
4. Section 16(5) to allow retrospective ITC claims for FY 2017-18 to 2020-21 in returns filed up to November 30, 2021.
5. Section 16(6) to permit ITC between cancellation and revocation of registration if claimed within 30 days.
6. Bar on refunds where tax has been paid or ITC reversed.
7. Section 74A for determinations from FY 2024-25 onwards.
8. Section 128A to enable waiver of interest/penalty for certain section 73 demands.
9. Validation of actions under Manipur GST Ordinances 2024 and 2025.

The two bills broaden the scope of GST to include alcohol manufacturing inputs, codify relief for past industry practices, provide clarity on the reverse charge mechanism, and for Manipur in particular, grants retrospective ITC and penalty waivers.

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Together, the two bills mark more than mere technical additions towards the existing tax regime. By expanding GST to alcohol manufacturing inputs, protecting businesses from retrospective demands, clarifying compliance rules and offering relief in Manipur through retrospective ITC claims and penalty waivers, the bills aim to balance revenue needs with industry concerns.

The political sparring in Delhi and the urgency highlighted in the Lok Sabha debates serve as a reminder that tax policy is never just about numbers - it’s about governance, priorities and the people and businesses that live with these laws every day.

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