GST Council to focus on auto refunds, swifter ITC, fewer notices
The government is preparing to transition the GST regime toward a trust-based tax administration. This shift includes introducing sweeping decriminalisation for tax offenses, suggesting fewer notices for invoice mismatches and doing away with arrests without evidence or prior to prosecution, aiming for "enforcement to work through money rather than custody".
On October 8, the Goods and Services Tax (GST) Council plans to streamline the tax system for businesses. The government proposes automatic registrations and refunds, wider and faster input-tax credits, fewer tax notices, and a significant reduction in criminal provisions. The council will also discuss allowing e-commerce sellers to register once in their home state to sell nationwide, eliminating the need for physical presence in every state.
Future rate changes will be reviewed annually, taking effect on April 1, providing businesses with stable pricing for long-term contracts and capital expenditure planning. The Council aims to unblock input-tax credits and introduce a 90% risk-based refund system. It also seeks to reduce the average registration time to three days and allow compliant taxpayers to cancel their registrations immediately if they have filed all returns and paid their taxes.
The Centre is also working on a faceless GST system, which may be implemented in the coming months. The changes will be phased in over 2027 to give businesses ample time to adapt. While some states may raise concerns over the proposed decriminalization, as they may perceive it as officials losing their power to arrest, the shift towards a trust-based tax administration is seen as beneficial by other officials.
Overall, the new structure has performed well without causing a revenue shock, with taxable supplies increasing by 25.8% year-on-year and revenue growing steadily.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
