All process reforms undertaken by the Goods and Services Tax (GST) Council on October 8 will be implemented from April 1, 2027, Union finance minister Nirmala Sitharaman said on Thursday.
The finance minister said that last year the Council had simplified the GST rates, while this time the Council talked about only processes that will help businesses.
The 57th Goods and Services Tax (GST) Council has approved all process reforms, including proposals relating to registration and refunds, while referring to a committee the proposal to allow businesses to claim input tax credit (ITC) even when suppliers have not deposited the tax collected from them, Uttar Pradesh Finance Minister Suresh Kumar Khanna said.
It has cleared a broad set of process reforms aimed at making Goods and Services Tax (GST) easier to comply with, speeding up refunds and reducing physical intervention by tax officials.
The council has approved automatic acceptance of routine changes in registration. Sitharaman also said that there will be faster clearance of refunds as the acknowledgement period will come down to 10 days from 15 days. “90% of refunds will be issued within 3 working days,” she said.
The minister also said that the government will not be issuing any notices for monetary thresholds of Rs 10,000 or below.
“The GST Council has also taken decisions for smoother movement of goods. The council recommended that goods can be inspected, detained, or seized only by the officer of the supplier state or the destination state,” she said.
The council recommended removing arrest powers under GST. A simplified GST registration mechanism for small sellers on the electronic commerce operators has been approved. “Small businesses will be enabled to sell while establishing a place of business in each state,” said Sitharaman.
According to the government, taxable supply has risen 25.8 percent to Rs 50.58 lakh crore a month from Rs 40.19 lakh crore, while supplies reported to consumers have increased 26.7 percent to Rs 7.58 lakh crore. At the same time, the effective tax rate on domestic supply has fallen to 13.13 percent from 14.55 percent.
The Council has now shifted its focus from tax rates to the way GST works for businesses and taxpayers in their day-to-day operations, including registration, returns, refunds, litigation and enforcement.
