New Delhi, October 8, 2026 (Yes Punjab News)
The 57th meeting of the Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman, retained the existing GST rate structure on Thursday while approving a wide-ranging set of reforms aimed at simplifying compliance, speeding up refunds and registrations, expanding input tax credit (ITC) relief and reducing litigation for businesses.
Instead of altering GST rates, the Council focused on improving the day-to-day functioning of the tax system. The Finance Ministry said GST rate changes will now be considered once a year, a move aimed at providing greater stability and predictability to businesses.
One of the key decisions concerns GST registration. The Council has proposed further automation of registration and amendment processes, with low-risk applications expected to receive automatic approval within three working days.
Around 61 per cent of GST registrations are already being approved within three working days without officer intervention, while nearly 66 per cent of amendment applications are proposed to be processed automatically.
Registrations suspended due to procedural lapses could also be restored automatically once the underlying issue is corrected. The process for cancelling registrations following business closure is also proposed to be simplified.
The Council has also sought to accelerate GST refunds. The timeline for acknowledging refund applications has been reduced from 15 days to 10 days, while around 90 per cent of refund claims are expected to be sanctioned through system-based risk assessment.
Refunds from the cash ledger will also be made fully automatic, reducing the need for manual intervention.
The Council expanded ITC relief to cover GST paid on employee health and life insurance in eligible cases. Relief has also been extended to telecom towers and pipelines located outside factory premises, as well as free samples and certain expired stocks required to be destroyed.
A Committee of Officers will examine safeguards for genuine buyers who could lose ITC because of a supplier’s tax default or fraud. The committee will study cases where buyers possess valid invoices, have received the goods and have made full payment to suppliers, and is expected to submit its report within three months.
Changes have also been approved for refunds under the inverted duty structure. Refund of input services under the inverted duty structure will be allowed from November 1, 2026. A similar facility for plant and machinery has been proposed from April 1, 2027, with the adjustment to be spread over 60 months.
The meeting also approved significant changes to GST enforcement and prosecution provisions. The Council has proposed revoking GST officers’ powers of arrest and raising the prosecution threshold from Rs 1 crore to Rs 5 crore.
The minimum punishment for GST offences has also been removed, leaving courts to decide whether a fine, imprisonment or both should be imposed.
The general penalty applicable where no specific penalty is prescribed has been reduced to Rs 10,000 from Rs 25,000. The Council has also proposed common standards for GST notices and proceedings.
Under the proposed framework, notices will not be issued for monetary amounts of Rs 10,000 or below, while pending notices below the threshold will also be withdrawn.
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