The 57th GST Council meeting is currently underway today, October 8, at Bharat Mandapam in New Delhi, with the Council expected to focus on procedural and structural reforms rather than broad .
GST rates are set to remain unchanged, with the meeting expected to consider a package of measures covering registration, refunds, input tax credit and enforcement.
The key expectations and reforms on the table are:
No broad GST rate changes: The Council is not expected to consider any major rate changes. Only a limited set of rationalisation and clarification issues are expected to be taken up.
Annual GST rate changes: Future GST rate changes could be considered once a year and take effect from April 1, bringing greater predictability to the tax regime.
Input tax credit protection: A buyer holding a valid invoice, having received the goods and paid the supplier in full, including tax, could be allowed to retain input tax credit even if suppliers further up the chain default.
Wider input tax credit: Some business expenses currently outside the credit chain could be brought within its ambit. The proposals also seek to prevent double taxation where a service is resold in the same line of business.
Faster GST refunds: Refund claims currently take an average of about 25 days to process. Under the proposed framework, applications could be acknowledged within 10 days, while 90% of eligible refunds could be released after a risk check.
Automatic refund processing: Refund information could be drawn automatically from customs and banking systems, reducing the need for businesses to submit documents separately.
Wider refund coverage: The proposed refund framework could be expanded to cover services and plant and machinery, along with measures for duty drawback exporters.
GST arrest provisions: The Council may consider removing arrest provisions under the GST law, with enforcement instead relying on civil consequences such as recovery of tax, interest and penalties. Prosecution would continue in serious cases.
Higher prosecution threshold: The prosecution threshold could be raised from ₹1 crore to ₹5 crore.
Relief for smaller taxpayers: The package could include waiver of late fees for delayed returns, rationalisation of general penalties and faster registration for eligible applicants.
The proposals come against the backdrop of the two-rate GST structure. Between October and July, taxable supplies rose 25.8% year-on-year, while gross tax liability increased 13.6%. The effective tax rate on domestic taxable supplies declined to 13.13% from 14.55%.
(With inputs from ANI and PTI)