Prime Minister Modi Welcomes New Reforms from GST Council, Promises Easier Business Operations
Prime Minister Modi praised new GST reforms aimed at enhancing transparency and easing business operations during the GST Councils 57th meeting.
New Delhi, October 8 (Daily Kiran) : Prime Minister Narendra Modi expressed his support for the newly approved reforms during the 57th meeting of the GST Council. He stated that these decisions will make the tax system more effective, transparent, and citizen-friendly.
In a post on the social media platform ‘X’, Modi highlighted key recommendations from the GST Council, including the removal of arrest provisions, reclassification of certain offenses as non-criminal, and simplification of procedures. He emphasized that these measures will have a positive impact on the business and industrial sectors.
The Prime Minister noted that the government is focused on a faster decision-making process, lower compliance costs, automated refunds, and a trust-based administrative system. He reiterated that these reforms align with the government’s ongoing efforts to make GST simpler and more business-friendly.
During the meeting chaired by Union Finance Minister Nirmala Sitharaman, no changes were made to tax rates. Instead, the council prioritized easing the everyday operations of the tax system.
A decision was made to further automate the GST registration process, proposing automatic approval for low-risk applications within three working days. Additionally, the procedures for amending applications and restoring suspended registrations will be simplified.
The GST Council also decided to expedite the refund process. The deadline for accepting refund applications has been reduced from 15 days to 10 days. Furthermore, around 90% of refund claims will be approved through a system-based risk assessment, minimizing the need for official intervention.
The scope of Input Tax Credit (ITC) has been expanded, now including GST paid on health and life insurance for employees in eligible cases. The council also decided to grant ITC relief for telecom towers and pipelines located outside factory premises, free samples, and certain expired stock that is destroyed.
Significant changes were proposed regarding GST enforcement and prosecution provisions. The proposal includes removing the powers of GST officials to make arrests and increasing the threshold for initiating prosecution from ₹1 crore to ₹5 crore. Additionally, the penalty for general offenses is proposed to be reduced from ₹25,000 to ₹10,000. Cases involving amounts of ₹10,000 or less will not receive notices, and there are plans to withdraw pending cases of this nature.
Industry organizations believe these reforms will enhance ease of doing business, reduce compliance costs, and alleviate pressure on working capital, particularly benefiting MSMEs and exporters. The government has indicated that the GST Council will now consider changes to tax rates only once a year, providing businesses with greater stability and predictability.
