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Teznews24 > इकोनॉमी > Major Reforms Announced by FM Sitharaman for Businesses, ETCFO
इकोनॉमी

Major Reforms Announced by FM Sitharaman for Businesses, ETCFO

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Last updated: 2026/10/13 at 4:46 PM
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The 57th GST Council meeting has recommended a series of measures aimed at simplifying GST compliance, speeding up refunds, widening input tax credit eligibility and providing greater certainty to businesses, Finance Minister Nirmala Sitharaman said on Thursday.

The Council has also decided to scrap the arrest power of tax officers and raise the prosecution threshold under GST to Rs 5 crore from Rs 1 crore.

There will be no change in GST rates following the meeting, with the Finance Ministry saying the existing rate structure is settled.

Here are the key announcements from the GST Council meeting that matter for India Inc

Simpler GST registration

The GST Council has recommended simplifying the registration process by introducing automatic acceptance of routine amendments to registration particulars, including addition of a place of business.

Cancellation of GST registration by taxpayers has also been proposed to be simplified.

The Council has also simplified the registration mechanism for small taxpayers making supplies through electronic commerce platforms.

Sitharaman said the simplified mechanism would enable small businesses to sell without establishing a place of business in each state.

Faster refunds

The Council has recommended reducing the timeline for acknowledgement of refund applications from 15 days to 10 days.

It has also recommended deemed acknowledgement where no response is issued within the prescribed period.

Based on risk assessment, the system is proposed to sanction 80 per cent of refund claims within three working days of acknowledgement.

The recommendations are aimed at improving cash flow for businesses and making the GST refund process more predictable.

Wider ITC and refund eligibility

The Council has recommended allowing input tax credit on additional business expenditures, including employee health and life insurance and telecom towers.

It has also recommended widening the scope of refunds under the inverted duty structure to cover input services for input tax credit availed from November 1.

For a smoother industry rollout, phased refund of eligible input tax credit on plant and machinery has been proposed to cover credit availed from April 1, 2027.

Relief for genuine taxpayers on ITC

The Council deliberated on the issue of genuine taxpayers being unable to avail input tax credit because of Section 16(2)(c) of the CGST Act.

Based on representations from various states, the Council has decided to constitute an Officers’ Committee to examine the matter and submit its report within three months for consideration by the Council.

Sitharaman said the Council prima facie appeared inclined to suitably amend the provision so that the consequence of supplier default is limited to the immediate supplier in the next preceding transaction, rather than extending across the entire supply chain.

She said the final decision would be taken by the Council after considering the committee’s recommendations, with implementation proposed from April 1, 2027.

The move is significant for businesses because genuine taxpayers can face ITC blockage when a supplier higher up in the value chain defaults on tax payment.

“There was an agenda on amending Section 162C of the CGST Act, where the ITC passed on to the final genuine taxpayer was blocked or reversed when any one of the suppliers in the value chain allegedly failed to deposit the ITC accrued or passed fake ITC,” Sitharaman said.

Faceless GST administration

The government intends to introduce faceless tax administration in Central Goods and Services Tax, Sitharaman said.

The proposed move is aimed at further simplifying GST administration and reducing direct interaction between taxpayers and tax officers.

Arrest powers scrapped, prosecution threshold raised

The GST Council has decided to scrap the arrest power of tax officers.

It has also raised the prosecution threshold under GST to Rs 5 crore from the existing Rs 1 crore.

The changes form part of the Council’s broader measures on GST enforcement and compliance.

Common standards for notices and proceedings

The GST Council has recommended common standards for GST notices and proceedings, Sitharaman said.

The measure is aimed at bringing greater consistency to GST administration and the way proceedings are handled across jurisdictions.

Small e commerce sellers get simplified registration

The Council has recommended a simplified GST registration mechanism for small taxpayers making supplies through electronic commerce platforms.

“Support for exports and small sellers: A simplified GST registration mechanism for small sellers on the electronic commerce operators platform will enable small businesses to sell without establishing a place of business in each state,” Sitharaman said.

The measure is expected to make it easier for eligible small businesses to sell across states through e commerce platforms.

No GST rate changes

The GST Council has made no changes to GST rates at the 57th meeting.

The Finance Ministry said the existing GST rate structure is settled.

The meeting was chaired by Sitharaman and held in New Delhi on Thursday. It was originally scheduled for Wednesday but was rescheduled due to unavoidable circumstances, according to an office memorandum issued by the GST Council Secretariat.

The recommendations and decisions announced after the meeting cover GST registration, refunds, input tax credit, enforcement and taxpayer facilitation, with several measures directly affecting businesses and their compliance and working capital processes.

  • Published On Oct 8, 2026 at 05:47 PM IST

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TAGGED: Finance minister, GST, GST compliance measures, GST Council announcement, India Inc, input tax credit, Nirmala Sitharaman, taxpayer protection
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