GST 2.0 makes it less taxing under new overhaul

On November 1, the GST Council announced reforms to India's indirect tax structure in GST 2.0, scrapping arrest powers and streamlining compliance and input tax credit claims. This marks the conclusion of the GST makeover initiated a year ago with rate rationalization. The council also rationalized e-way bill provisions, raised prosecution thresholds to ₹5 crore, and converted certain criminal offenses to civil ones, emphasizing decriminalization of the GST law now in its 10th year.

Finance Minister Nirmala Sitharaman highlighted the focus on simpler registration and returns, faster refunds, fewer disputes, and smoother movement of goods. The inverted structure refunds, covering accumulated input tax credit on services dated November 1, will be implemented prospectively. Two key proposals related to input tax credit are pending discussion and will be presented before the next council meeting.

Going forward, the council will only make rate changes annually, moving towards automated, data-driven, and risk-based administration for easier procedures and reduced litigation. The reforms aim to improve ease of doing business, unlock working capital, facilitate exports, and create a simpler, predictable, and globally aligned GST regime.