New Delhi, October 8 (Daily Kiran) : The recent meeting of the GST Council has been hailed as a significant relief for small and medium enterprises (MSMEs). Tax experts believe that these decisions will greatly reduce uncertainties surrounding tax laws, as well as the fear of tax notices, penalties, and litigation, thereby enhancing the ease of doing business.
Chartered Accountant Nitish Kumar noted that the council’s primary focus this time was on MSMEs and small traders. He explained, “The aim was to simplify the notice format. The penalty has been reduced from ₹25,000 to a minimum of ₹10,000. There will be no provision for show-cause notices below ₹10,000. This alleviates the burden on small businesses and assures them that minor mistakes will not lead to harassment by GST officials.”
Regarding the expedited refund process, Kumar emphasized its importance for working capital. Now, businesses can expect to receive 90% of provisional refunds immediately upon application. Previously, refunds took longer, but now, receipts will be automatically recognized within ten days. The intervention of officials in cash ledger refunds has been eliminated, allowing refunds to automatically reflect in the ledger once system-generated flags are cleared, ensuring that working capital remains accessible for traders.
Discussing the reduction of legal burdens and the enhancement of business ease, Kumar mentioned the removal of the arrest power under Section 69. This recommendation reflects the government’s trust in self-assessment mechanisms. As traders gain confidence in the system, a positive environment will foster business growth, contributing to India’s development goals for 2047. Overall, these decisions aim to create a transparent, efficient, and business-friendly tax regime.
CA Ratna Singh Yadav, a member of the North India Regional Council, pointed out that the arrest power held by GST officials often instilled fear among traders and professionals. He praised the decision to recommend its removal, stating, “This is an excellent decision. Additionally, the prosecution limit has been raised from ₹1 crore to ₹5 crore. The previous ₹1 crore limit was easily surpassed by small traders, making this change very commendable.”
Yadav echoed the sentiments of Delhi Chief Minister Rekha Gupta, asserting that lowering penalties from ₹25,000 to ₹10,000, eliminating the fear of arrest, and increasing the prosecution limit provide immense relief to small businesses.
Another regional council member, CA Nitish Kumar, added that all these decisions are user-friendly. He remarked, “Previously, amendments or cancellations in registration required significant effort, but now this process has been automated. The refund process has also been made transparent. Provisions that seemed harsh are now aligned with the ease of doing business.”
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