GST Updates for Businesses
The GST Council has put forward a range of recommendations designed to ease compliance for businesses and lessen the role of tax officials. These decisions were made during the 57th GST Council meeting on Thursday, October 8.
Key Recommendations from the GST Council
The Council has proposed eliminating the provisions for arrests under GST, alongside increasing the prosecution threshold from Rs 1 crore to Rs 5 crore. Moreover, it has suggested decreasing the general penalty from Rs 25,000 to Rs 10,000.
Faster GST Refund Process
The government plans to expedite the GST refund process. The timeframe for issuing an acknowledgment or deficiency memo will be shortened from 15 days to 10 days. For eligible refund claims related to zero-rated supplies and the inverted duty structure, 90% of the claimed amount will be provisionally approved through a risk-based system without the need for officer intervention.
Enhanced GST Registration and Compliance
The GST Council has also recommended measures to simplify GST registration and compliance. Routine changes to registrations will be processed automatically. Furthermore, the government intends to establish standard procedures for GST notices and proceedings.
Streamlined Goods Movement Regulations
For goods transported between states, physical interceptions will be limited to instances based on specific intelligence and authorised by a senior tax officer. Additionally, small sellers utilizing e-commerce platforms will have a more straightforward method to register in another state. They will be permitted to designate an e-commerce operator’s warehouse as their principal place of business, under specific conditions.
Input Tax Credit (ITC) Proposals
Regarding input tax credit (ITC), the Council has expanded relief for genuine taxpayers. However, the proposal that would allow businesses to claim ITC even when their suppliers have not remitted the tax has been referred to a committee for more detailed analysis.
No Changes to GST Rates
During this meeting, the Council did not announce any changes to GST rates. The proposed process reforms are anticipated to take effect from April 1, 2027.