India’s Goods and Services Tax Council prepares to advance GST 2.0, emphasising compliance simplification, enhanced automation, and stricter enforcement measures in the latest reforms aimed at streamlining the tax system.
India’s Goods and Services Tax Council is expected to use its 57th meeting on Thursday to push the next stage of GST 2.0, shifting the emphasis away from rate changes and towards simpler compliance rules and lighter administration for businesses. Business Standard reported that the Council is unlikely to alter tax rates this time, apart from clarifications, after the sweeping overhaul of indirect taxation announced in September last year. The aim now is to tackle inconsistencies in the system and make implementation closer to the original logic of GST.
According to Business Standard, the latest proposals follow nearly nine months of discussions with state governments, including three national coordination meetings and several working groups of officials. The newspaper said the review was built on data from the GST system itself, reflecting a more mature tax architecture than the one introduced in 2017. In the early years, the priority was to bring businesses into the regime, steady revenues and curb evasion. Now, with more transaction-level data, invoice matching and technology tools, officials believe the department can focus more closely on suspicious behaviour rather than placing the same compliance load on compliant taxpayers.
The Council is also expected to consider tougher changes to enforcement and litigation. Business Standard said one proposal would raise the threshold for launching prosecution from ₹1 crore to ₹5 crore, while another would remove the power of GST officers to arrest taxpayers without judicial approval. A government official told the paper that only two states oppose dropping the arrest provision, and that the Centre expects to secure support at the meeting. Tax advisers quoted by the newspaper argued that the overwhelming majority of taxpayers are honest and that punitive rules aimed at a small minority have often created unnecessary costs and legal risk for everyone else.
Other reforms under discussion are designed to ease working-capital pressure and cut disputes. Business Standard reported that the agenda includes protecting bona fide buyers from tax demands arising from supplier defaults, widening input tax credit on certain business costs such as motor vehicles and group insurance, and allowing refunds of input-service credit where inverted duty structures leave businesses stuck with excess tax. Faster refunds, especially for exporters, are also expected to feature prominently, with sources telling the paper that the government is considering greater automation so that eligible claims can be paid without each one being manually handled by an officer. Analysts quoted by the paper said the direction of travel points to a more centralised, technology-led and less punitive GST regime.
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