Parliament Enacts Comprehensive Amendments to Manipur Goods and Services Tax Act

Parliament recently passed the Manipur Goods and Services Tax (Amendment) Act, 2025, a significant legislative instrument designed to introduce wide-ranging changes to the Manipur Goods and Services Tax Act, 2017. The Bill, introduced in the Lok Sabha on August 7, 2025, aimed to align the state's GST framework with amendments made to the Central Goods and Services Tax Act, 2017, particularly those introduced by the Finance (No.2) Act, 2024. This enactment was necessitated by the cessation of the Manipur Goods and Services Tax (Eighth Amendment) Ordinance, 2024, and the subsequent Manipur Goods and Services Tax (Amendment) Ordinance, 2025, which were promulgated while the Legislative Assembly of Manipur was not in session and the state was under President's rule. The Act came into force with various sections having retrospective effect, including some from July 1, 2017, October 1, 2023, August 1, 2024, October 30, 2024, November 1, 2024, and June 9, 2025, as specified in its provisions.

Among the key provisions, the Act introduced a State tax levy on un-denatured extra neutral alcohol or rectified spirit when used for the manufacture of alcoholic liquor for human consumption. It also inserted a new Section 11A, empowering the Government of Manipur to regularise instances of non-levy or short-levy of State tax where such occurrences were a result of a generally prevalent practice. Further, amendments were made to specify the time of supply of services in cases where the recipient of services is required to issue the invoice under the reverse charge mechanism (where the recipient, rather than the supplier, is liable to pay tax). A crucial change for businesses included the insertion of a new sub-section (5) in Section 16, allowing registered persons to avail input tax credit (ITC) for invoices or debit notes pertaining to the Financial Years 2017-18, 2018-19, 2019-20, and 2020-21, provided the relevant return under Section 39 was filed up to November 30, 2021. Additionally, the Act provided for the availment of ITC after the revocation of registration cancellation, subject to certain conditions.

A major structural change involved the introduction of a new Section 74A for the determination of tax not paid, short paid, erroneously refunded, or wrongly availed or utilised input tax credit for the Financial Year 2024-25 onwards. This new section establishes a distinct procedure and limitation period for such determinations, differentiating it from the existing Sections 73 and 74, which are now restricted to periods up to Financial Year 2023-24. The legislation provided: “74A. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.” This new section also outlines different penalty structures depending on whether the non-compliance involved fraud, wilful misstatement, or suppression of facts.

The legislative intent behind these amendments was to ensure the continued smooth functioning and uniformity of the Goods and Services Tax regime in Manipur, particularly in light of the Central GST amendments. The Act sought to address several practical issues and statutory gaps that had emerged since the inception of GST. For instance, the introduction of Section 128A provides for a conditional waiver of interest or penalty, or both, for demands raised under Section 73 pertaining to the period from July 1, 2017, to March 31, 2020, offering relief to taxpayers for past compliance challenges. This provision aims to resolve long-standing disputes and reduce litigation, provided the full tax amount is paid by a notified date. The Act also sought to streamline the appeal process by reducing the maximum pre-deposit amounts required for filing appeals before the Appellate Authority and the Appellate Tribunal. Furthermore, it clarified the tax treatment of specific financial services by amending Schedule III, stipulating that the apportionment of co-insurance premium and services by an insurer to a reinsurer, under certain conditions, would be treated as neither a supply of goods nor services. The Act also validated actions taken under the previously lapsed ordinances, ensuring legal continuity and certainty during the period of President's rule.

Keywords: Manipur GST, GST Amendment Act 2025, Goods and Services Tax, Input Tax Credit, Tax Determination, Penalty Waiver, Anti-Profiteering, Co-insurance, Re-insurance, Manipur Legislature, Ordinance Geo Tags: India, Manipur District: Not Applicable