GST Structural Reforms
GST Council Expected to Keep Rates Unchanged While Weighing Major Structural Reforms
Anonymous
India’s GST Council is expected to leave tax rates unchanged at its October 8 meeting and consider future rate changes only once a year, effective April 1, to give businesses greater predictability. The meeting is instead set to address GST 2.0 process and structural reforms, including more automated registration and return filing, streamlined input tax credit rules, and faster refunds, with eligible claims to be acknowledged within 10 days and most released after risk checks. Proposals also include clearer rules for e-commerce transactions and measures to reduce compliance burdens and arbitrary scrutiny; the Council is also expected to consider decriminalizing aspects of GST law and removing arrest provisions. The reform package follows last year’s shift to a two-rate structure, which officials say has supported consumption and revenue growth.
Key Points
1
The Council may approve a rule applying a single 5% GST rate without input tax credit to deliveries made through e-commerce platforms.
2
A proposed input tax credit safeguard would let a buyer retain the credit if they have a valid invoice, received the goods and paid the supplier in full, even if another supplier further up the chain defaults.
3
Proposals would widen refund eligibility to include tax paid on services and on plant and machinery.
4
The process overhaul would use real-time invoice matching so corrections are recorded transparently and automatically reflected in buyers’ electronic ledgers, validating input tax credit when it is recorded.
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