Businesses with turnover of up to ₹5 crore that sell only to unregistered customers could file returns annually and pay GST quarterly under a proposed compliance overhaul.
India’s GST Council has moved towards a simpler filing system for small businesses that sell only to unregistered customers, approving in principle an optional annual return and quarterly tax payment model for firms with turnover of up to ₹5 crore in the previous financial year. According to the Finance Ministry, the proposed arrangement is designed to cut compliance costs for traders and service providers that do not pass input tax credit through the supply chain, because the timing of their return filing does not affect a recipient’s ability to claim credit.
The proposal could affect a large pool of small enterprises. The explanatory note cited by the ministry said about 16.85 lakh taxpayers report supplies made only to unregistered persons, and roughly 16.66 lakh of them have annual turnover below ₹5 crore. That means the simplified system would apply to a very large share of consumer-facing micro and small firms that currently bear recurring professional and administrative expenses each time a return falls due.
The council also backed a separate simplification for small sellers using e-commerce platforms. Under the plan, suppliers that have no physical presence in a state or union territory could register automatically by declaring an e-commerce operator’s warehouse there as their principal place of business, provided they intend to pass on no more than ₹2.5 lakh a month in input tax credit and meet the other conditions set by the system. Reuters-style reporting on the council’s wider reform package has described the move as part of a broader effort to reduce manual intervention and make GST compliance easier for smaller businesses.
In another measure aimed at easing the load on small firms, the council recommended a minimum threshold of ₹10,000 for issuing show-cause notices, including CGST, SGST, IGST and cess. It also proposed that pending notices and appeals involving sums below that level be treated as if the threshold had been in force when they were issued. Taken together, the package signals a push to trim low-value disputes and reduce the number of cases that move through the tax system, which officials say should improve the ease of doing business for smaller taxpayers.
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