In short: The 57th GST Council meeting is now set for 8 October, after being rescheduled twice. The Centre is reported to be proposing a five-pronged reform plan, and the agenda is said to include faster refunds, easier input tax credit and a rethink of arrest powers. These are proposals only. Nothing changes unless the Council approves it.

What has happened?

The meeting was first planned for 12 September. It was moved to 7 October because India was hosting the BRICS summit in New Delhi on 12 and 13 September. The GST Council Secretariat then shifted it again to 8 October, citing unavoidable circumstances. Finance Minister Nirmala Sitharaman will chair it, with representatives of the Centre and the states.

Reports say the focus is on the day-to-day working of GST, not on tax rates. According to sources in the Finance Ministry quoted by The Hindu, rates are not on the agenda. That includes GST on the merchant discount rate on UPI transactions.

The five-pronged plan

The Centre's proposal reportedly covers five areas: process reforms, structural reforms, ease of living and doing business, exports of services, and e-commerce. If the Council approves, the changes are to be rolled out in stages so that businesses have time to adjust.

  • Registration: At present, 61% of taxpayers get registered within three working days without an officer's involvement. The Centre wants to streamline the process for the rest, to avoid unnecessary queries and rejections. Small sellers could register once in their home state and, after verification, sell across the country. Today a seller needs a registered place of business in each state they sell in.
  • Invoice matching: The invoice management system would be upgraded so that a seller's corrections flow automatically into the buyer's invoice. The stated aim is to bring notices for invoice mismatches down to zero.
  • Returns: A concept note is to be shared with states on letting small taxpayers who supply only to consumers file returns once a year instead of monthly.
  • Exports of services: Service to a foreign client through a branch abroad may be treated as an export. Testing, repair, certification and research done in India for a foreign client may also count as exports, even if the goods stay in India.

Refunds and input tax credit

Refunds are proposed to be acknowledged within 10 days. 90% of the amount would be released after a risk check that uses data taken automatically from Customs and the banking system. Mint separately reports that the Council may consider releasing 90% of eligible export refunds provisionally within 7 to 10 days, with the rest paid after detailed verification. The two reports describe the timeline differently, so the final design will depend on what the Council decides.

On input tax credit (ITC), reports mention several proposals:

  • A buyer who holds the invoice, received the goods and paid the supplier in full, including tax, should keep the credit. It should not depend on whether someone else in the chain paid. Mint says safeguards against fake invoices would stay.
  • Credit may be relaxed for items such as outdoor catering, employee life and health insurance and telecom towers. Motor vehicles and related services may also be considered.
  • Refunds of tax on plant and machinery and input services under the inverted duty structure may be allowed in a graded way over five years.

Arrest and prosecution

Under the Central Goods and Services Tax Act, 2017, the Commissioner can authorise an arrest under Section 69 where there is reason to believe a person committed specified offences under Section 132. These include certain cases of tax evasion and fraudulent ITC. Mint reports that the Council may consider omitting Section 69, raising the prosecution threshold and taking some lower-value offences out of the criminal framework. The idea is to separate honest compliance errors from deliberate evasion.

Other items reported

  • Goods interception could become intelligence-led, needing specific information and authorisation.
  • GST data could be shared more widely with the statistics ministry (MoSPI).
  • The IGST exemption for imported medicines and specialised foods for seven rare diseases could be widened.
  • GST rate changes could be limited to once a fiscal year, taking effect from 1 April of the next year.

Who is affected, and what should you do?

Exporters, manufacturers, small businesses, e-commerce sellers and buyers claiming ITC stand to be most affected. Nothing needs to be done yet. Existing rules continue to apply until the Council decides and the changes are notified. Businesses may want to keep invoices, payment proofs and returns in order, and watch for the Council's announcements after the meeting.

Frequently asked questions

Will the refund changes apply immediately after the meeting?

No. The Council only recommends. Reports say approved reforms would be implemented in a staggered manner to give businesses time to adapt.

Will GST rates change on 8 October?

Rates are reportedly not on the agenda. The reforms are about processes such as registration, returns, refunds, disputes and credit.

Is the power of arrest under GST being removed?

Not yet. Mint reports that the Council may consider omitting Section 69 of the CGST Act, 2017, but this is a proposal that has not been decided.

Sources

Not legal advice. This page explains the law in general terms. Rules, fees and limits change, and your facts matter. Check the official source or consult a qualified advocate before acting. Disclaimer