The GST Council has recommended a series of changes to simplify compliance for businesses and reduce the involvement of tax officials. The decisions were taken at the 57th GST Council meeting held on Thursday, October 8.

The Council has recommended removing the arrest provisions under GST and raising the prosecution threshold from Rs 1 crore to Rs 5 crore. It has also proposed reducing the general penalty from Rs 25,000 to Rs 10,000.

The government will also make the GST refund process faster. The timeline for issuing an acknowledgement or deficiency memo will be reduced from 15 days to 10 days. For eligible refund claims related to zero-rated supplies and inverted duty structure, 90% of the claimed amount will be sanctioned provisionally through a risk-based system without officer intervention.

The Council has also suggested simplifying GST registration and compliance. Routine registration changes will be processed automatically, while the government plans to introduce common standards for GST notices and proceedings.

For goods moving between states, physical interception will be restricted to cases based on specific intelligence and authorised by a senior tax officer.

Small sellers using e-commerce platforms will also get an easier route to register in another state. They will be allowed to use an e-commerce operator’s warehouse as their principal place of business, subject to certain conditions.

On input tax credit (ITC), the Council has widened relief for genuine taxpayers. However, the proposal to allow businesses to claim ITC even when their suppliers have not deposited the tax has been referred to a committee for further examination.

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