New Delhi [India], October 8 (ANI): The Goods and Services Tax (GST) Council will consider changes to tax rates only once a year, with decisions taking effect from April 1, Union Finance Minister Nirmala Sitharaman said on Thursday, marking a shift towards greater predictability in the tax regime for businesses.
Addressing a press conference after the 57th GST Council meeting, Sitharaman said, "GST Council will take it up, take rate changes only once in a year and it will come up for decision from 1st April only."
She clarified that no GST rates were changed at Thursday's meeting, which focused on simplifying compliance, easing tax procedures and reducing disputes.
"As I have briefed you all earlier, this meeting was more on the process reforms," Sitharaman said.
The decision comes a year after the introduction of the two-rate GST structure, with the Council now focusing on improving the functioning of the tax system rather than undertaking further rate rationalisation.
Among the major reforms, the Council recommended removing arrest powers from GST officers and raising the threshold for criminal prosecution from Rs 1 crore to Rs 5 crore.
"The council recommended removing arrest powers under GST," Sitharaman said.
Clarifying the decision, she said, "When we say arrest has been taken out, taken out from a tax officer's hands."
However, she emphasised that criminal prosecution would continue to be available under GST law.
"The act provides for prosecuting people if there's a criminality," she said.
The Council also recommended reducing the general penalty from Rs 25,000 to Rs 10,000 and removing minimum punishment provisions, leaving sentencing to judicial discretion.
In another relief for taxpayers, the Council recommended that notices involving amounts below Rs 10,000 should not be issued, while pending notices below the threshold would also be withdrawn.
"Equally, we will be withdrawing pending notices below the said threshold. If it was issued, it'll be withdrawn," Sitharaman said.
The Council also recommended expanding input tax credit (ITC) benefits to additional business expenses, including employee health and life insurance, telecom towers and pipelines laid outside factories.
According to the official note on the meeting's outcomes, ITC will also be available on free samples and expired stock that must legally be destroyed, benefiting sectors such as pharmaceuticals and fast-moving consumer goods (FMCG).
On refunds, the Council recommended reducing the acknowledgement period from 15 to 10 days and providing for automated sanction of 90 per cent of eligible claims following risk assessment.
"It will enhance working capital for businesses," Sitharaman said.
Refund eligibility will also be expanded to input services for credits availed from November 1, 2026, and plant and machinery for eligible credits availed from April 1, 2027.
For small businesses, the Council gave in-principle approval to an optional scheme allowing taxpayers with turnover up to Rs 5 crore, supplying only to consumers, to file annual returns and pay taxes quarterly.
However, the proposal to protect genuine buyers from losing ITC due to defaults by suppliers elsewhere in the supply chain has been referred to an officers' committee for further examination.
Sitharaman said the process reforms are targeted for implementation from April 1, 2027, with the matters referred to committees expected to be finalised before then. (ANI)
GST rate changes to be considered only once a year, says Sitharaman
