In a major move to align with recent amendments to the Central Goods and Services Tax (CGST) Act, 2017, the President of India has promulgated The Manipur Goods and Services Tax (Second Amendment) Ordinance, 2025. The ordinance was issued on October 7, 2025, following the approval of the 56th GST Council and is aimed at ensuring uniformity between central and state GST laws.
Background
The Finance Act, 2025 introduced several key amendments to the CGST Act through sections 121 to 134. Since Manipur is currently under President's Rule (as per the proclamation dated February 13, 2025), legislative powers are being exercised by Parliament under Article 356 of the Constitution. Given that Parliament was not in session, the President issued this Ordinance to implement the required changes without delay.
Major Amendments Introduced
1. Introduction of Track-and-Trace Mechanism
A new Section 148A has been inserted, empowering the government to specify certain goods that must carry unique identification markings (digital stamps or QR codes).This system will:
- Enable electronic tracking of goods throughout the supply chain.
- Help curb tax evasion and improve compliance transparency.
- Impose a penalty under Section 122B of up to Rs 1 lakh or 10% of the tax involved for non-compliance.
2. Clarification on 'Plant and Machinery'
An amendment to Section 17(5)(d) clarifies that the phrase "plant or machinery" shall always be read as "plant and machinery."This retrospective clarification (effective from July 1, 2017) overrides any contrary judicial interpretations and provides consistency in input tax credit (ITC) claims.
3. Supply of Goods in SEZs and FTWZs
The amendment to Schedule III deems that supply of goods warehoused in Special Economic Zones (SEZs) or Free Trade Warehousing Zones (FTWZs) to any person before clearance for export or to the Domestic Tariff Area (DTA) will not be treated as supply under GST. This ensures parity with the Central Act and prevents double taxation.
4. Changes in Appeals and Penalty Provisions
- Under Sections 107 and 112, appellants must pre-deposit 10% of penalty amounts before filing appeals in cases where tax demand is not involved.
- These provisions simplify dispute resolution and discourage frivolous appeals.
5. Amendments to Returns and ITC Provisions
- Section 38 replaces the term "auto-generated statement" with "statement" to provide flexibility in return filing processes.
- Section 34 modifies conditions for reduction in output tax liability related to credit notes, ensuring ITC reversal by recipients.
Effective Date and Implementation
Most provisions under the Ordinance will come into force on dates to be notified by the State Government of Manipur through the Official Gazette. Certain retrospective amendments, however, take effect from July 1, 2017 and April 1, 2025.
Impact on Businesses and Taxpayers
The Ordinance seeks to:
- Align Manipur's GST law with national standards.
- Strengthen compliance through digital traceability of goods.
- Provide legal clarity on ITC, appeals, and tax treatment of SEZ transactions.
Businesses operating in Manipur or dealing with SEZ warehousing and high-value goods are advised to review their compliance systems and update ERP mechanisms to incorporate the track-and-trace requirements once notified.
Conclusion
The Manipur GST (Second Amendment) Ordinance, 2025 marks a significant step towards a more transparent and tech-driven tax system. By mirroring central reforms and introducing digital traceability, it aims to enhance tax governance and promote Ease of Doing Business in the region.
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