The GST Council in India is debating a significant overhaul aimed at reducing refund processing times to 17 days and automating registration, marking a shift towards a more trust-based compliance model and easing burdens for small businesses.
India’s Goods and Services Tax Council is set to consider a sharper, faster refund system when it meets on Thursday, October 8, with officials saying the aim is to cut the processing cycle to about 17 days. Under the proposal, taxpayers would get up to 10 days for acknowledgement before it is treated as accepted automatically, followed by seven days for processing. At present, acknowledgement alone can take as long as 21 to 45 days, although officials said roughly 90% of refunds are already being handled quickly.
The Council is also weighing a more automated registration process for GST numbers. According to officials, 61% of registrations are completed within three days, but the remaining applications can still take several days. The push now is to use automation to speed up those slower cases, while some small businesses with turnover below ₹2.5 lakh already receive registrations in about 34 minutes on average.
For smaller sellers that operate across more than one state, the Council is considering a rule change that would reduce the need for repeated registrations if they sell through an e-commerce platform whose recognised warehouse qualifies as a place of business. An official said the proposal could benefit nine out of 10 sellers on such platforms, easing one of the more cumbersome parts of doing business under the tax system.
The broader reform package also appears to reflect a shift towards a more trust-based compliance model. Officials are discussing the removal of physical verification in some registration-cancellation cases, provided taxes are paid and returns filed, while tax specialists say the government is looking at widening input tax credit, or ITC, on items such as passenger vehicles, leasing, repairs, insurance, catering and infrastructure-related services. The changes, if approved, would also go alongside a tighter technology-led system that flags fake credits earlier in the supply chain rather than after they have moved through multiple transactions.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
