GST Annual Return Exemption for Small Businesses

GST Annual Return Exemption for Small Businesses: Notification No. 15/2025

On September 17, 2025, the Central Government issued Notification No. 15/2025 – Central Tax, bringing welcome relief to small businesses under India’s Goods and Services Tax (GST) regime. This notification exempts certain taxpayers from filing annual returns starting from the financial year 2024-25. If you’re a small business owner or a GST-registered professional, this blog breaks down what the notification means, who benefits, and how to stay compliant—all in simple terms.

What is Notification No. 15/2025?

The notification, issued under the Central Goods and Services Tax (CGST) Act, 2017, specifically leverages the first proviso to Section 44(1), which allows the government to waive the requirement for filing annual returns (Form GSTR-9) for certain taxpayers. The annual return is a yearly summary of a business’s GST transactions, including sales, taxes paid, and input tax credit (ITC) claimed, typically due by December 31 of the following year.

Based on recommendations from the GST Council, the notification exempts eligible taxpayers from this obligation, effective for the financial year 2024-25 (April 1, 2024, to March 31, 2025) and beyond.

Who Qualifies for the Exemption?

The exemption applies to:

• Registered persons with an aggregate annual turnover of up to ₹2 crore in any financial year.
• Aggregate turnover includes the total value of taxable supplies, exempt supplies, exports, and inter-state supplies made by the business (or its agent) across India under a single GSTIN.

This means small businesses, such as local retailers, small manufacturers, or service providers with turnover not exceeding ₹2 crore in a financial year, no longer need to file GSTR-9 starting from FY 2024-25.

Why This Matters

The GST annual return can be a time-consuming and complex process, requiring businesses to reconcile their monthly or quarterly filings (GSTR-1 and GSTR-3B) with their books of accounts. For small businesses, especially micro and small enterprises (MSMEs), this often involves hiring professionals, incurring costs, and navigating potential errors. The exemption offers several benefits:

• Reduced Compliance Burden: No need to prepare and file GSTR-9, saving time and effort.
• Cost Savings: Eliminates expenses related to hiring accountants or GST practitioners for annual return preparation.
• Lower Penalty Risk: Avoids late filing fees (up to ₹200 per day under Section 47) and potential scrutiny for non-compliance.
• Focus on Growth: Small businesses can channel resources toward operations rather than paperwork.

Important Considerations

While the exemption is a relief, here are some key points to keep in mind:

• Turnover Limit: The ₹2 crore threshold applies to the entire financial year across all supplies under a single GSTIN. If your turnover exceeds this limit in any year, you must file GSTR-9 for that year.
• Other Returns Still Required: The exemption only covers the annual return (GSTR-9). You must continue filing regular returns (e.g., GSTR-1 for outward supplies and GSTR-3B for tax payments) as per your turnover slab (monthly or quarterly).
• Composition Scheme Taxpayers: Those under the composition scheme (filing GSTR-4) are already exempt from GSTR-9, so this notification doesn’t change their obligations.
• Record-Keeping: Even if exempt, maintain accurate records of transactions, as the GST authorities may audit your business under Section 35(5) or request data for verification.
• State GST Laws: This is a Central Tax notification, but parallel exemptions typically apply under State GST laws for consistency. Check with your state’s GST portal for confirmation.

When Does This Start?

The exemption is effective for financial year 2024-25 onwards, meaning the first year you can skip filing GSTR-9 is for the period April 1, 2024, to March 31, 2025 (due by December 31, 2025). The notification was published on September 17, 2025, giving businesses clarity well in advance.

Why Did the Government Introduce This?

The GST Council has been working to simplify compliance for small businesses since the GST rollout in 2017. Small taxpayers often lack the resources to handle complex filings, and past exemptions (e.g., for FY 2017-18 to 2023-24) showed positive results in reducing compliance stress. By making this exemption permanent from FY 2024-25, the government aims to:

• Support MSMEs, which are vital to India’s economy.
• Reduce administrative bottlenecks for both taxpayers and GST authorities.
• Encourage compliance with regular filings by easing year-end obligations.

Steps for Small Businesses

To make the most of this exemption:

1. Check Your Turnover: Use the GST portal or your accounting records to confirm your aggregate turnover for FY 2024-25. Ensure it stays below ₹2 crore to qualify.
2. Stay Compliant with Regular Filings: File GSTR-1 and GSTR-3B accurately and on time to avoid mismatches or notices from GST authorities.
3. Keep Records Handy: Maintain clear records of sales, purchases, and ITC claims in case of audits or inquiries.
4. Monitor Updates: Regularly check the CBIC or GST portal for any clarifications or changes to this exemption.
5. Consult an Expert: If your turnover is close to ₹2 crore or you deal with complex supplies (e.g., exports), consult a GST professional to ensure compliance.

Looking Ahead

Notification No. 15/2025 is a step toward making GST more small-business-friendly, aligning with the government’s broader “Ease of Doing Business” initiative. However, it’s critical to stay vigilant about your turnover and other GST obligations to avoid surprises during audits. For businesses just above the ₹2 crore threshold, consider streamlining your processes to manage GSTR-9 filings efficiently.

For more details, visit the official CBIC website or consult a GST practitioner to understand how this exemption applies to your business. Stay compliant, save time, and focus on growing your business under the simplified GST framework!

NOTIFICATION No. 15/2025 – Central Tax

Also Read: Recommendations of the 56th Meeting of the GST Council – CA Cult

CA Cult YouTube: Calculation of Income Tax FY 2024-25 | Old vs New Regime | For Salaried Employees

Read More on GST, CBIC