GST Council meets in Delhi to consider faster refunds and easier registration

The 57th meeting of the GST Council began in Delhi on Thursday under the chairmanship of Union Finance Minister Nirmala Sitharaman. The meeting is discussing the next phase of GST reforms proposed by the government. The reforms are expected to make refunds, GST registration and return filing easier for taxpayers.

The chief ministers of Delhi, Goa, Haryana, Jammu and Kashmir, Karnataka, Kerala, Maharashtra and Meghalaya are present. The deputy chief ministers of Manipur and Telangana, finance ministers of various states and Union Territories, senior officials, the Revenue Secretary, the chairman and members of the Central Board of Indirect Taxes and Customs (CBIC) and senior Finance Ministry officials are also attending.

According to sources, the reform proposals include speeding up refunds, making GST registration easier for companies, and promoting trust-based administration by taking several tax-related offences out of the ambit of criminal provisions.

The proposals focus on five broad areas: procedural reforms, structural reforms, ease of doing business, e-commerce and export of services. Among the procedural reforms, it is proposed that refund applications be accepted within 10 days. Releasing 90 per cent of refunds on the basis of risk checks, once the required information is obtained automatically from customs and the banking system, is under consideration. This is expected to make doing business easier.

It is also proposed to set uniform standards for notices, hearings and orders in tax disputes. Not sending notices in cases involving amounts below a set threshold is also under consideration.

Changes to GST return filing are also proposed. To ensure that a full record of the corrections made by taxpayers is available and that these changes are automatically reflected in the buyer's ledger, it is proposed to make "invoice matching" more effective. This would allow input tax credit to be verified at the registration stage itself and could reduce the need to issue mismatch notices on a large scale.

It was stated that 61 per cent of taxpayers are currently getting GST registration within three working days without an officer's approval. The process is proposed to be eased for the remaining taxpayers as well, in an effort to cut unnecessary queries and rejections of registration applications.

It is also proposed to make closing a business as easy as starting one. For those whose GST registration certificates have been suspended because of procedural lapses, automatic restoration of the certificate without officer intervention, once the lapses are corrected, is under consideration.

Sources said the main aim of the reforms is that work the system can do on the basis of data should be done by the system, and that officers' intervention should be limited to cases requiring human judgment and understanding.