GST Council Approves Major Compliance Reforms
The GST Council has approved a sweeping set of compliance reforms aimed at simplifying registration, speeding up refunds, reducing litigation and limiting intrusive enforcement, while leaving GST rates unchanged.
GST Refunds to Become Faster and More Automated
The Council has reduced the time allowed for acknowledging refund claims from 15 days to 10 days. If no acknowledgement or deficiency memo is issued within that period, the claim will be deemed accepted.
Under the revised framework, 90% of eligible refund claims can be sanctioned within three working days after risk assessment. Refunds of excess cash-ledger balances will also move towards full automation.
Prosecution Threshold Raised to ₹5 Crore
One of the biggest enforcement changes is the removal of arrest powers under GST provisions at the pre-prosecution stage.
The prosecution threshold has also been increased from ₹1 crore to ₹5 crore, while the general penalty where no specific penalty applies will be reduced from ₹25,000 to ₹10,000.
A ₹10,000 threshold has also been proposed for issuing certain notices, with low-value pending notices set to be withdrawn.
GST Registration and ITC Rules Simplified
Routine registration amendments, including additional places of business, will become more automated, while cancellation procedures will also be simplified.
The Council has additionally expanded input tax credit eligibility to more business expenses, including employee health and life insurance, telecom towers and certain other categories.
Small taxpayers with turnover up to ₹5 crore and only consumer-facing supplies may also get an optional annual return scheme, with quarterly tax payments.
Physical inspection of goods in transit will be restricted to cases based on specific intelligence and prior senior-level approval.
