The 57th GST Council meeting begins in New Delhi on Thursday with a broad set of proposals aimed at changing how businesses and taxpayers interact with the Goods and Services Tax system, with the focus shifting from rate rationalisation to .
The Council is expected to consider changes to GST registration, return filing, input tax credit (ITC), refunds and dispute resolution, along with proposals to change the way tax enforcement works, including the arrest powers of GST officers and the threshold for launching prosecution.
The meeting, chaired by Union Finance Minister Nirmala Sitharaman, is being held at Bharat Mandapam in New Delhi. It was originally scheduled for September 12 and was later moved to October 7 before being rescheduled again to October 8. The formal agenda has not been made public.
The meeting comes more than a year after the 56th GST Council meeting in September 2025, when the government undertook a major rate rationalisation exercise under GST 2.0.
This time, the focus is expected to be less about GST rates and more about making the tax system simpler, faster and more predictable for taxpayers.
Here are the key issues on the table.
One of the most closely watched proposals is a possible overhaul of .
The proposal under consideration could take away the power of GST officers to arrest taxpayers without judicial authorisation, requiring a court’s approval before an arrest can be made. The proposed changes are aimed at distinguishing deliberate tax evasion and serious offences from routine compliance disputes.
The Council is also expected to consider raising the threshold for launching criminal prosecution from Rs 1 crore to Rs 5 crore and narrowing the circumstances in which GST-related offences can lead to criminal proceedings.
The issue has already emerged as a point of contention, with Maharashtra, Gujarat, Uttar Pradesh, Karnataka and Andhra Pradesh opposing the proposal to remove or significantly restrict tax officials’ arrest powers.
This could therefore be one of the more contentious items before the Council.
Jitendra Motwani, Partner – Tax Practice, Trilegal, said the proposed decriminalisation, judicial oversight of arrests and keeping routine ITC and classification disputes outside the criminal process would be a step towards treating honest taxpayers as partners rather than suspects.
He said the proposals could reduce litigation, although the actual relief would depend on implementation circulars and how the changes are followed at the field level.
Another major item is input tax credit, particularly cases where a genuine buyer loses credit because the supplier has failed to deposit tax or comply with return-filing requirements.
Ranjeet Mahtani, Partner, Dhruva Advisors, said businesses are looking for a legislative safe harbour or relaxation of credit reversal rules so that compliant buyers do not lose legitimate ITC because of a supplier’s default.
“This could entail a slew of recommendations,” Mahtani said, pointing to the need for a more taxpayer-friendly GST process after the rate rationalisation exercise.
Motwani also said the proposal to allow genuine recipients to retain credit even when suppliers default could provide relief to businesses.
For companies, this is important because blocked ITC can directly affect working capital and can also lead to prolonged disputes with tax authorities.
Faster refunds are another major issue expected to come up.
Exporters and businesses operating under inverted-duty structures have long faced working-capital blockages when refunds take time to process.
Mahtani said exporters are looking for fully automated and faster verification of online refund claims. He also pointed to an expected change in the inverted-duty refund formula to include input services, which could provide more complete refund coverage.
Current proposals reported ahead of the meeting include a more time-bound refund mechanism, with a maximum timeline of 17 days being considered.
Karthik Mani, Partner & Leader – Indirect Tax: South, Tax & Regulatory Advisory at BDO India, said faster refunds of accumulated credit could ease working-capital pressure in sectors such as pharmaceuticals and FMCG.
The Council is also expected to look at making GST registration and return filing less cumbersome.
The 56th Council had already laid out an automated, fast-track three-day registration process for low-risk applicants. The next phase could focus on widening and standardising such processes.
Mahtani said the Council could also consider a more dynamic return-filing infrastructure that allows preventive, mid-month amendments and auto-populated corrections using integrated e-invoicing data.
For MSMEs, the objective would be to reduce the amount of manual compliance and minimise errors that later turn into notices or disputes.
Motwani said simpler registration and returns, including changes to GSTR-3B, could ease compliance for MSMEs.
The push for easier registration could also have to be balanced against concerns around fake registrations and identity theft.
Mahtani said the Council is likely to take note of Delhi High Court interim orders relating to biometric-based Aadhaar authentication and could accelerate a uniform, pan-India rollout of biometric authentication for GST registrations.
The idea would be to make registration faster for genuine applicants while strengthening safeguards against fake or fraudulent registrations.
Another proposal could have implications for India’s manufacturing and export ecosystem.
Mani said the Council may consider granting export status to work carried out for overseas customers even when the goods themselves do not leave India.
This could benefit Indian contract manufacturers that process materials for overseas companies but deliver finished goods within India based on the customer’s instructions.
“The proposal will be a significant boost for emerging industries such as semiconductors and electronics,” Mani said.
He added that extending similar treatment to repair, testing, storage and job work could strengthen India’s position as a manufacturing hub.
The Council could also consider widening the circumstances in which businesses can claim input tax credit.
Motwani pointed to proposals involving employee group insurance and outdoor catering.
Mani also highlighted proposals to unblock ITC on employee group insurance, free samples and goods destroyed after expiry.
For sectors such as pharmaceuticals and FMCG, such changes could reduce the amount of tax getting locked up in the system and ease working-capital pressures.
The broader theme running through these proposals is a move towards differentiating between genuine compliance mistakes and deliberate tax evasion.
Mahtani said rationalising penalties for non-fraud cases and standardising show-cause notice procedures could reduce compliance costs for businesses that make genuine mistakes.
He expects a softer penalty regime and simpler processes to reduce litigation.
Motwani also expects the proposals to reduce disputes, but stressed that implementation will be critical.
Unlike the 56th GST Council meeting, which brought a major restructuring of GST rates, the October meeting is not expected to be another broad rate-rationalisation exercise.
The focus this time is on the plumbing of the GST system — registration, returns, ITC, refunds, enforcement and dispute resolution. India Today had earlier reported that GST 2.0’s next phase is expected to concentrate on these process reforms, while rate changes remain off the immediate agenda.
That makes the meeting important for businesses even without a change in GST rates.
For India Inc, the expectation is that the next phase of GST should not necessarily mean lower tax rates, but less friction in complying with the tax system and faster access to money that is currently stuck in credits and refunds.
As Mahtani put it, the Council is entering this phase with expectations of a more tax-friendly ecosystem, particularly around registration, return filing and the matching of data between the GST portal and returns.
The challenge now will be turning these proposals into rules and processes that work consistently on the ground.