New Delhi, October 6, 2026 (Yes Punjab News)
The GST Council is set to meet on October 8 to consider the next phase of reforms in India’s indirect tax regime, with proposals aimed at speeding up refunds, simplifying business registration, easing e-commerce for small sellers and moving towards a trust-based tax administration.
According to sources, the proposed measures cover five broad areas — process reforms, structural reforms, ease of doing business, e-commerce and exports of services.
Under process reforms, GST refunds are proposed to be acknowledged within 10 days, with 90 per cent of the eligible amount released after a risk-based check. Necessary information would be drawn automatically from customs and banking systems to reduce manual intervention.
For tax litigation, the proposals seek common standards for notices, hearings and orders, while notices below a specified threshold could be eliminated.
Return filing is also proposed to be streamlined by ensuring that corrections are properly recorded and corresponding changes automatically reflected in the buyer’s ledger. The invoice-matching mechanism would validate input tax credit at the recording stage and help reduce mismatch-related notices.
The registration process is another area of focus. While 61 per cent of taxpayers already receive registration within three working days without an officer’s intervention, the process for the remaining applicants is proposed to be simplified to reduce unnecessary queries and rejections.
The reforms also seek to make closing a business as simple as starting one. Registrations suspended for procedural lapses could be restored automatically once the required compliance is completed. Small taxpayers supplying only to consumers may also be allowed to file returns annually instead of every month.
The underlying principle of the proposed changes is that the GST system should use data and automation wherever possible, while officers should focus on matters requiring human judgement.
On structural reforms, the proposals seek to protect input tax credit for a buyer who possesses the invoice, has received the goods and has fully paid the supplier, including the tax. The credit would not be dependent on whether another entity further up the supply chain has deposited the tax.
The proposals also seek to bring certain ordinary business costs currently kept outside the credit chain back into it, preventing the tax component from becoming an additional cost reflected in prices. Services resold within the same line of business would also be protected from double taxation.
For exporters of services, the proposals aim to simplify rules as services become an increasingly important component of India’s external trade. Billing a foreign client through an overseas branch would not, under the proposal, deprive an Indian company of export status.
Testing, repair, certification and research undertaken in India for overseas clients would also qualify as exports even when the goods remain in India. A single standard for determining when payment is treated as received, aligned with Reserve Bank of India rules, is also proposed.
Refunds are proposed to be widened to cover taxes paid on services, plant and machinery, which constitute significant cost components for service exporters.
The GST Council is also expected to consider measures to make e-commerce more accessible to small sellers. Under the proposal, seller verification would be completed once in the home state and then apply across the country.
At present, sellers are required to have a registered place of business in every state where they sell, a requirement that can limit the ability of smaller businesses to expand nationally.
The proposed trust-based tax administration would further shift enforcement towards financial penalties and data-driven fraud detection rather than criminal custody.
A large number of offences could be removed from the criminal provisions of the GST law. Taxpayers facing delays, genuine mistakes or temporary cash shortages would instead be subject to recovery, interest and proportionate penalties.
The proposed invoice-matching mechanism is also intended to detect fraudulent input tax credit closer to its point of origin and prevent it from moving further through the supply chain.
FOLLOW NOW
