The Gujarat State Assembly has approved amendments to the state GST law to implement recommendations emerging from the 56th GST Council meeting. The changes are aimed at simplifying GST compliance, expediting refund processing and reducing working-capital constraints for businesses.
A key amendment provides for faceless GST registration for small businesses, with registration expected to be completed within three days, subject to the prescribed conditions. The revised framework also introduces faster provisional refunds in cases involving an inverted duty structure, with 90% of the eligible refund proposed to be released within seven days.
The amendments further clarify the GST treatment of post-sale discounts and credit notes. A supplier may reduce taxable turnover through a post-sale discount even where the discount was not included in the original agreement, provided the prescribed conditions are met. The supplier is required to issue a credit note, while the recipient must reverse the corresponding input tax credit attributable to the discount.
Section 34 has also been amended to provide greater clarity regarding the issuance of credit notes for post-sale discounts.
For inverted-duty refund claims, the amended provisions increase the provisional refund from the existing framework to 90% of the eligible amount within seven days, replacing the earlier 60-day timeframe. The amendment also removes the ₹1,000 minimum refund threshold applicable to goods exported with payment of tax.
Finance Minister Kanu Desai stated that the GST measures are intended to improve ease of compliance and accelerate the availability of refunds to taxpayers. He also highlighted Gujarat's GST compliance performance, stating that the state achieved a 99.6% timely GST return filing rate during the last financial year, described as the highest in the country, and had ranked first nationally for five consecutive years.
The Finance Minister further stated that GST 2.0 rate reductions and exemptions covering medicines for serious illnesses, medical and life insurance premiums, butter, ghee, soap, shampoo, tractors and agricultural equipment had not adversely affected Gujarat's revenue growth. CASansaar