Vikshit Bharat on December 12, 2025
The landscape of Indian taxation is constantly evolving, and a significant milestone has just been achieved in the Northeastern state of Manipur. The Manipur Goods and Services Tax (Second Amendment) Bill, 2025, after successfully navigating the legislative corridors of the Indian Parliament, received presidential assent on December 10, 2025, officially becoming “The Manipur Goods and Services Tax (Second Amendment) Act, 2025.” This pivotal legislation is set to revolutionize Manipur’s GST framework, bringing it into seamless alignment with the broader national GST reforms driven by the Finance Act, 2025. For businesses and taxpayers across the region, understanding these comprehensive changes is crucial for ensuring compliance and leveraging new opportunities.
Overcoming Legislative Hurdles: President’s Rule and the Path to Reform
The journey to enacting the Manipur GST (Second Amendment) Act, 2025, was particularly unique. Manipur, having been under President’s Rule, faced challenges in its state assembly directly enacting the necessary amendments to align with the Central Goods and Services Tax Act, 2017. This central legislative intervention was thus essential to ensure seamless continuity of tax administration and strengthen Manipur’s taxation system, especially as the state focuses on recovery from recent internal disturbances. The Bill’s rapid passage through both houses of Parliament, culminating in presidential assent, underscores the urgency and importance of these GST updates India. This new Act replaces the earlier Manipur Goods and Services Tax (Second Amendment) Ordinance, 2025, ensuring legal permanence for these critical GST reforms.
Expanding the Tax Base and Bolstering Revenue through Strategic Amendments
One of the most impactful changes introduced by the Act is the levy of SGST on Extra Neutral Alcohol (ENA). By amending Section 9 of the Manipur GST Act, 2017, the state can now impose State GST on undenatured Extra Neutral Alcohol and rectified spirit used in the production of alcoholic liquor for human consumption. This move significantly expands the state’s tax revenue base, providing much-needed resources.
Furthermore, the Act introduces groundbreaking measures for enhanced transparency and revenue leakages prevention. A new provision empowers the state government to mandate unique identification markings, such as a digital stamp or electronic mark, for specific goods. This innovative track-and-trace system aims to improve GST administration by providing real-time data and deterring illicit trade. Businesses failing to comply with these unique identification marking requirements will face stringent penalties for non-compliance, up to ₹1 lakh or 10% of the tax payable, whichever is higher, as stipulated in the newly added Section 122B.
Rationalizing Tax Slabs and Streamlining Appeals for Business Ease
In line with the 56th GST Council recommendations, a major reform focuses on the rationalization of tax slabs. The Act paves the way for consolidating the existing four-slab GST structure (5%, 12%, 18%, and 28%) into two primary tiers of 5% and 18%, with a proposed 40% rate for ultra-luxury items. This tax slabs rationalization is expected to simplify compliance and make the tax structure more predictable for businesses.
For businesses navigating disputes, the Act introduces welcome relief by reducing the mandatory pre-deposit for appeals. The required pre-deposit amount for filing appeals before the Appellate Authority and the Appellate Tribunal has been lowered from 20% to 10% of the disputed tax amount, with maximum thresholds now set at ₹20 crore. Additionally, for appeals involving only a penalty without a tax demand, a pre-deposit of 10% of the penalty amount is now required. To further facilitate ease of doing business, the period for filing appeals to the Appellate Tribunal can now be extended until a date notified by the state government, offering greater flexibility.
The Act also simplifies simplified voucher rules, clarifying that the issuance of a voucher is not considered a supply of goods or services. This aims to reduce disputes and improve compliance for businesses dealing with loyalty programs and gift vouchers.
Clarifications, ITC Relaxations, and SEZ Benefits
- Introduction of Section 74A: A new Section 74A establishes a clear mechanism for determining and recovering unpaid tax or wrongfully availed Input Tax Credit (ITC) for financial year 2024-25 onwards. Notices under this section are to be issued within 42 months from the due date for the annual return.
- Relaxation for ITC Claims: The Act provides significant relaxation for previous Input Tax Credit claims for the financial years 2017 to 2021, offering much-needed relief to businesses.
- Clarification of “Plant and Machinery”: The ambiguity in the definition of “plant and machinery” has been clarified retrospectively from July 1, 2017, ensuring legal consistency and reducing potential disputes.
- Exemption for SEZ Goods: The list of transactions exempt from State GST has been expanded to include the supply of goods warehoused in Special Economic Zones (SEZs) or Free Trade Warehousing Zones (FTWZs) before their clearance for exports or to the Domestic Tariff Area (DTA). This supports international trade and logistics operations within these zones.
- Waiver of Interest and Penalties: The state government is empowered to waive the recovery of tax, interest, or penalty, based on the recommendations of the GST Council, allowing for compassionate and pragmatic tax administration.
A Stronger Manipur within the National GST Framework
The Manipur Goods and Services Tax (Second Amendment) Act, 2025, marks a pivotal moment for the state’s economic and administrative stability. By aligning with national GST reforms India and implementing progressive measures, Manipur is set to experience enhanced tax administration, reduced revenue leakages, and a more business-friendly environment. These GST updates India are not just about compliance; they are about fostering economic recovery, ensuring transparency, and promoting ease of doing business in a state vital to India’s Look East policy. Businesses operating in or looking to engage with Manipur should carefully review these changes to ensure full compliance and strategic advantage. The future of Indian taxation continues its journey towards greater simplicity and efficiency.
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