The 57th GST Council has recommended 12 major GST reforms covering arrest provisions, prosecution threshold, ITC, refunds, registration, compliance, e-commerce sellers, exports and small businesses. Several changes will require statutory amendments or notifications before becoming effective.
1. GST Council recommends removal of arrest provisions under GST
The 57th GST Council has recommended removing the power of GST officers to arrest taxpayers under the GST law as part of a wider move towards decriminalisation and trust-based tax administration.
2. GST Council recommends raising prosecution threshold from ₹1 crore to ₹5 crore
The GST Council has recommended increasing the monetary threshold for launching GST prosecution from ₹1 crore to ₹5 crore, significantly restricting criminal proceedings to higher-value cases.
3. GST Council recommends reduction in general penalty from ₹25,000 to ₹10,000
The GST Council has recommended reducing the general penalty under GST from ₹25,000 to ₹10,000 in cases where the law does not prescribe a specific penalty.
4. GST Council Recommends Wider Eligibility for Input Tax Credit and Refunds
The GST Council has approved significant expansion of Input Tax Credit and refund eligibility, including relief relating to employee insurance, telecom towers, external pipelines, input services and plant and machinery.
5. GST Council recommends further simplification of registration and compliance processes
The GST Council has approved greater automation of GST registration, amendments, restoration and business-closure processes to reduce unnecessary officer intervention and compliance delays.
6. GST Council recommends faster refunds to improve working capital for businesses
The GST Council has recommended faster and more automated GST refunds, including reducing the acknowledgement period from 15 days to 10 days and releasing 90% of eligible claims through risk-based processing
7. GST Council recommends common standards for GST notices and proceedings
The GST Council has recommended uniform standards for GST notices and proceedings and decided that notices involving ₹10,000 or less should not be issued, with existing pending notices below the threshold proposed to be withdrawn.
8. GST Council recommends measures for smoother movement of goods across states
The GST Council has proposed restricting unnecessary checks of goods in transit, with inspections generally confined to the state of origin and destination rather than every state through which a consignment passes
9. GST Council recommends intelligence-based and authorised interception of goods
GST officers may be allowed to stop vehicles carrying goods only on the basis of specific intelligence and prior authorisation from a senior officer, under reforms recommended by the GST Council.
10. GST Council recommends simplified GST registration for small sellers on e-commerce platforms
The GST Council has recommended a simplified registration mechanism allowing eligible small e-commerce sellers to expand across states without establishing their own separate physical business premises in every state.
11. GST Council recommends measures to facilitate export of services
The GST Council has proposed changes to make it easier for Indian businesses to qualify for export-of-services benefits, including certain services supplied through overseas branches and work performed in India for foreign customers.
12. GST Council approves in-principle optional scheme for small consumer-facing businesses with turnover up to ₹5 crore
The GST Council has approved in principle an optional scheme under which businesses with turnover up to ₹5 crore making only B2C supplies could file one GST return annually while paying tax quarterly