The Finance Act, 2025 brings significant amendments to the CGST, IGST, and Income-tax Acts.

The most discussed change is the clarification of Input Service Distributor (ISD) provisions — enabling ISDs to distribute Input Tax Credit (ITC) even for reverse charge mechanism (RCM) supplies. This eliminates ambiguity and ensures seamless inter-branch credit flow.

Other noteworthy updates include:

• Expansion of “local authority” definitions for administrative clarity.
• Streamlined GST refund and compliance processes.
• Strengthened provisions for digital audit trails in income-tax administration.

For corporates and consultants, this Act signals the government’s emphasis on data consistency, credit transparency, and reduced litigation — a move aligning tax systems with digital India’s ethos.