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Over a year after the number of Goods and Services Tax (GST) slabs were reduced to two from four and tax rates were cut across the board for a consumption booster, the GST Council is set to take up comprehensive process reforms in the upcoming meeting on October 7.
These will cover easing of procedures concerning penalties, refunds, registration, and availing input tax credits, according to official sources. The Council is also expected to prescribe a minimum threshold for show-cause notices, rationalise penalty amounts in cases that do not involve fraud, lower general penalty levels, streamline registration, and take measures to minimise mismatches and reduction of notices, the sources added.
The Council may also decide on treating permanent transfer of title of Intellectual Property Rights as a supply of services, removing the late fee for delayed filing of returns by small taxpayers, and including Metro Rail systems for e-way bill generation, sources said.
Finance Minister Nirmala Sitharaman earlier this month said that the upcoming GST Council meeting will focus “only on process reforms”. At the last Council meeting, held on September 3, 2025, the four GST slabs of 5%, 12%, 18%, and 28% were merged into a two-tier structure of 5% and 18%, along with a 40% rate for ultra-luxury and sin goods. These changes came into effect on September 22, 2025.
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The Council may waive the late fee for delayed filing of returns by small taxpayers, those with aggregate turnover of less than Rs 5 crore in the last financial year, if the said person furnishes the return on or before the last day of the month in which such return is due to be furnished.
The Council may also lower the general penalties for all taxpayers to Rs 10,000 from Rs 25,000, sources said.
According to the sources, the law committee of the GST Council has recommended issuing a comprehensive circular to provide “clear and consistent” guidance on the information required under the GST registration application. This will eliminate ambiguity, minimise avoidable processing delays, and facilitate ease of compliance, sources said. This issue is expected to be taken up at the GST Council meeting.
The Law Committee has also recommended guidelines be issued to field officers for ensuring uniformity across jurisdictions and expeditious processing of the registration applications, sources said.
The Council may approve automated acceptance of amendments in all registration details on the GST common portal, except in cases where changes relate to the address of the Principal Place of Business, sources said. Along with simpler registration, the Council is also expected to approve the rationalisation of the process for cancellation of registration under GST, the sources said. The Council may take up the issue of a simplified registration mechanism for small sellers on the electronic commerce operators’ platforms, they sources added.
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Furthermore, the council is also expected to approve an alternate mechanism for amending liabilities and input tax credit in returns to minimize mismatches and reduction of notices and intimations, sources said. Measures to facilitate correct reporting of tax liability details and input tax credit in form GSTR-3B may be taken up, along with steps to improve the user interface for filing of returns by the taxpayers, sources said.
The law committee has recommended extending e-invoicing for domestic supplies received from an unregistered person where tax is payable on reverse charge basis, including for import of services, source said. The Council may approve a minimum threshold of Rs 5,000 for issuing show cause notices under sections 73 and 74 of the CGST Act, source said.
The penalty amount in cases that do not involve fraud, willful misstatement or suppression of facts to evade tax may be capped at 10% of the tax amount, and the condition of a minimum penalty may be removed, sources said. The Council may also address the issue where recipients lose input tax credit due to delay in furnishing of the details of underlying invoice or debit note by the supplier, sources said.
The Law Committee has recommended amending section 18 of the CGST Act to provide a mechanism for availment and reversal of input tax credit in respect of inputs relatable to a supply and capital goods exclusively used for a supply, lying in stock on the date of transition for a person who transitions from. This is expected to be taken up by the GST Council.
The GST Council may also approve treating permanent transfer of intellectual property rights (IPR) as a supply of services, which was previously limited to only temporary transfers or licensing of an IPR, sources said. The Council may also include Metro Rail systems for e-way bill generation.
TOPICSGST councilThis article was first uploaded on September twenty-seven, twenty twenty-six, at twenty minutes past six in the evening. © The Indian Express (P) Ltd