India’s GST Council meeting is set to discuss several major proposals focused on making it easier to do business in India. Finance Minister Nirmala Sitharaman is the Chairperson of the 57th GST Council.
Here are the Major issues being discussed in this meeting:
1) GST Officers Arrest Powers A proposal may reduce or change GST officers’ power to arrest in certain cases. The idea is to make GST enforcement more business-friendly, especially because every GST mistake or dispute may not necessarily be a deliberate fraud.
2) GST Input Tax Credit Problem Some businesses pay 18% GST on raw materials but can charge only 5% GST on their final product. This can leave a large amount of Input Tax Credit accumulated.
For example: Rs 18 GST paid on inputs versus Rs 5 collected on sales can leave Rs 13 of credit. This can lock working capital and create cash-flow pressure for businesses.
3) Faster GST Registration A proposal may aim to make GST registration for small businesses faster, potentially targeting completion within 3 days. The broader goal is to make starting and running a business easier.
4) GST Prosecution Threshold Another proposal is to increase the GST prosecution threshold from Rs 1 crore to Rs 5 crore.
In simple terms, the proposal could mean that criminal prosecution for certain GST offences would generally apply at a higher tax-evasion threshold, while tax recovery, interest and penalties can still apply.
5) Proposed GST registration turnover limits: Goods trading threshold to increase from Rs 40Lakh to Rs 60Lakh; service sector limit to rise from Rs 20Lakh to Rs 40Lakh.
Overall, the discussions appear focused on simplifying GST compliance, reducing unnecessary friction for businesses and improving the ease of doing business.
These are proposals under discussion the final decisions will be known after the 57th GST Council meeting.