New Delhi [India], October 5 (ANI): The 57th GST Council meeting is likely to consider major changes in tax compliance, including a proposal to remove arrest provisions under the Goods and Services Tax (GST) law and speed up refunds by allowing 90 per cent of eligible claims to be released automatically after a risk check, according to Finance Ministry sources.
The proposed reforms are aimed at making GST compliance simpler for businesses while using data and technology to identify risky cases. The Council is scheduled to meet on October 7.
As per sources, one of the key proposed changes is the complete removal of arrest provisions under GST. Under the proposed framework, tax enforcement would rely on civil consequences such as tax recovery, interest and penalties, while prosecution would continue for serious cases.
The proposals also seek to raise the prosecution threshold from Rs 1 crore to Rs 5 crore. An expert committee reviewing GST-related offences has proposed removing nine offences entirely and partly removing one more, while 24 offences would be softened and 11 would be retained.
The proposed changes would also remove the minimum sentence and provide an option of fine in every case. The maximum sentence for the middle category of offences would be reduced from three years to two years.
Another major reform relates to refunds, particularly for exporters. Under the proposal, 90 per cent of eligible refund claims would be released automatically after a risk check, with the remaining amount released after verification.
The sources also shared that the refund applications would be acknowledged within 10 days, and if an officer does not act within that period, the application would be treated as acknowledged.
The system would also use data from customs, the Reserve Bank of India and other sources, reducing the need for businesses to submit scanned documents separately.
The refund framework is proposed to be widened to cover services as well as plant and machinery. Refund on plant and machinery would be available over five years. Duty drawback exporters would also be eligible for refunds, while the existing cap against domestic prices would be removed.
The proposals could benefit a large number of businesses as around 38,700 taxpayers currently claim export refunds.
The wider compliance package also proposes that show-cause notices would not be issued for amounts below Rs 10,000 under specified GST provisions. This would also apply to pending adjudication, appeal and tribunal cases.
As per the ministry data, since 2017, around 11.3 lakh notices at or below this amount have been issued, with 1.23 lakh awaiting adjudication and around 11,800 at the first appeal stage.
For small taxpayers, the proposals will include waiver of late fees for delayed returns and rationalisation of general penalties. Registration for eligible applicants could also be completed automatically within three working days.
The Council may also consider a wider set of reforms aimed at easing GST compliance, simplifying procedures and reducing the compliance burden for businesses.
So the current measures, as per the sources, are focusing on clarifying existing provisions and improving compliance rather than changing GST rates. The proposals are subject to consideration by the GST Council. (ANI)
GST Council may scrap arrest provisions, fast-track refunds with 90% automatic payout
