Centre to propose five-pronged reform plan at GST Council meeting on October 8

The Centre plans to present a five-pronged reform proposal to the GST Council during their meeting on October 8. The proposals aim to streamline the Goods and Services Tax (GST) system, reducing administrative bottlenecks and compliance burdens, particularly for small businesses. The five-pronged plan addresses process reforms, structural reforms, ease of living and doing business, exports of services, and e-commerce.

Some of the key changes include automatic invoice matching, reduced paperwork for claiming input tax credits (ITC), fewer return filings for small taxpayers, and the removal of multi-state registrations for businesses selling across the country. The aim is to ease processes, avoid unnecessary queries, and reduce rejections.

Another proposal focuses on streamlining invoice management, so that changes made by sellers to invoices are automatically reflected in buyers' invoices, minimizing mismatch notices. The Centre also intends to address issues with input tax credits being held up due to late supplier returns and proposes to bring ordinary business costs into the ITC system. Refunds are expected to be acknowledged within 10 days, with 90% released based on automated data checks from customs and banking systems.

In terms of reduced paperwork, the Centre will share a concept note allowing small taxpayers who only supply to consumers to file returns once a year instead of monthly. Service providers will also benefit from a broader definition of exports, including services provided to foreign clients through a branch abroad and testing, repair, certification, and research done in India for clients abroad.

Lastly, the Centre intends to allow sellers to register once in their home State and then sell in the rest of the country, eliminating the need for multiple registration in different states.