The Centre will propose a five-pronged plan for the next set of reforms to the Goods and Services Tax (GST) system at the upcoming GST Council meeting on October 8, according to sources in the Ministry of Finance. 

These reforms are aimed at automating and easing a lot of the current administrative bottlenecks in the GST system, and reducing the compliance burden, especially for small businesses. Rates, including the GST on the Merchant Discount Rate (MDR) on UPI transactions, will not be on the agenda.

The five-pronged proposal covers process reforms, structural reforms, ease of living and doing business, exports of services, and e-commerce. 

Some of the key changes proposed involve automatic invoice matching between buyers and sellers, reducing paperwork around claiming input tax credits (ITC), reducing the number of times small taxpayers have to file returns, and removing multi-state registrations for small businesses looking to sell across the country.

The proposals are to be discussed at the GST Council meeting and, if approved, will be implemented in a staggered manner to give businesses time to adapt to the new systems.  

Easing of processes

At the moment, 61% of GST taxpayers receive their GST registration within three working days without the need for a tax officer’s involvement, an official in the Ministry of Finance said. The Centre will now propose a streamlining of processes for the remaining taxpayers so as to avoid “unnecessary queries” and avoid rejections.

Further, the Centre will propose an upgrade of the existing invoice management system to match invoices in such a manner that corrections and changes made to an invoice by the seller are recorded at each step and automatically reflected in the buyer’s invoice. 

“This would avoid a large number of notices issued to taxpayers due to invoice mismatches,” the official explained. “The aim is to reduce these mismatch notices to zero.”

Credits and refund compliance

At the moment, businesses complain that their input tax credits are often held up from being credited to their accounts because their suppliers have not filed their returns. The Centre is now trying to address this issue. 

“A buyer who holds the invoice, has received the goods and has paid his supplier in full, including the tax, should keep their credit,” the official said. “It should not depend on whether someone further up the chain has paid or not.”

Further, the Centre is proposing that ordinary business costs, that currently do not get refunded as ITC, should be brought into the ITC system. In addition, taxes paid on input services, earlier not eligible for ITC, will be proposed to be made eligible. 

Refunds are also proposed to be acknowledged within 10 days, with 90% of the refund amount to be released on the basis of a ‘risk check’ using data obtained automatically from the Customs department and the banking system. 

Reduced paperwork and costs

The Centre will be sharing a concept note with the States on allowing small taxpayers who supply only to consumers to file their returns once a year instead of once a month as is currently the case. 

Another major demand of service providers is to widen the net of what constitutes an export. At the moment, providing a service to a foreign client through a branch abroad is not counted as an export of service. The Centre is proposing to amend this to categorise such business as an export. 

Similarly, testing, repair, certification and research done in India for a client abroad is proposed to be classified as an export of services even if the goods stay within the country. 

“For example, companies might send cars to India to be tested, which are then destroyed after the testing and not sent back,” the official explained. “That will now count towards services exports as far as tax treatment is concerned.”

Another proposal that could significantly reduce paperwork for small businesses is the one regarding where they are registered. At the moment, a seller needs a registered place of business in every State they sell in, which is not practical for most small sellers and thus limits them to their home State.

The Centre will propose that sellers be allowed to register once in their home State and, once verification is done, be granted access to sell in the rest of the country.  

Published – October 06, 2026 05:51 pm IST

The story so far:The Goods and Services Tax (GST) Council met on Thursday (October 8, 2026) for the 57th time since GST was introduced a little more than nine years ago. In the run-up to the meeting, officials in the Finance Ministry said that GST rates would not be discussed in this meeting, something that was confirmed by Finance Minister Nirmala Sitharaman following the meeting. Nevertheless, the decisions that were taken by the Council stand to significantly alter GST in the medium and long term. 

What was the plan for this meeting?

The Centre has realised that, nine years on, the GST system has largely settled down now in terms of revenues. That is, the monthly collections are stable and do not vary by a large degree; the number of return filers has also stabilised, and businesses around the country have become familiar with the GST procedures. 

Having implemented wide-ranging GST rate changes in its last meeting in September 2025 that not only rationalised rates across a wide range of products and services but also reduced the number of slabs in GST, the Council could now look at substantial reforms in the administrative and procedural aspects of GST — which so far have remained a big pain point for businesses. 

According to sources in the Finance Ministry, the Centre entered the meeting with a five-pronged proposal ranging from process reforms, structural reforms, and ease of living and doing business aspect, to the exports of services, and e-commerce related complications.

Several of these proposals were accepted by the Council while some have been slated for further discussion. However, as per Ms. Sitharaman, all of them will come into force from April 1, 2027 onwards. 

How has the Council eased GST-related paperwork?

One of the more far-reaching steps approved by the GST Council is a system that will provide greater certainty about the documents required during registration. As per the government, 61% of taxpayers are already being granted automatic registration within three working days. 

Now, the upgraded system is expected to further streamline the process for remaining low-risk taxpayers by doing away with unnecessary queries and rejections as far as possible. That is, the system is moving to a black-list, where most applications are accepted and only a few might get rejected, from the current white-list kind of system where each company has to go through the registration process before it can do business in the GST system.

The new system will also incorporate a simplified registration mechanism for small taxpayers who provide supplies through e-commerce platforms, such that they will have to register in only their home State rather than in each State that they want to sell in. The process for amendments and cancellation of registrations has also been eased. 

In what could substantially ease the paperwork process for small businesses, the Centre has shared a concept note with the GST Council and has received its in-principle approval for an optional scheme where business-to-consumer (B2C) firms with a turnover of up to ₹5 crore a year that supply to consumers can file returns one a year instead of quarterly. This will be taken up again in the next GST Council meeting. 

Regarding refunds, the new system aims at a faster processing time of acknowledgements of 10 days, down from the current 15 days. The system will also conduct a risk assessment using Customs and banking data and release 90% of the refund claims within three working days of acknowledgement. 

At the moment, additional business expenditure or expenditure incurred in the normal course of doing business, including employee health and life insurance, is not eligible for input tax credits. The new system will now make such expenditure eligible. 

How does the new system reduce litigation and harassment?

In a major departure from the earlier system, the GST Council has recommended removing the arrest powers of GST officers and has increased the prosecution threshold from ₹1 crore to ₹5 crore. The general penalty will also be reduced from ₹25,000 to ₹10,000. 

In addition, it said that only GST officers in originating or destination States can inspect, detain, or seize inter-State supplies. That is, no officer in a State in between the source and destination can interfere with the supply of goods. Further, such interceptions can only be done with the authorisation of a joint commission-level officer and that too only after “specific intelligence” has been obtained about the consignment. 

A major issue taxpayers have been facing over the years has been that the system rejects their claim for input tax credits because their suppliers have not filed their returns. So, even though a business receives supplies, has the invoice, and pays the tax on these supplies, it often cannot get a refund until the supplier themselves file their returns. This has been leading to a lot of businesses seeing their working capital being locked up.

The GST Council has instructed its officers’ committee to examine this issue. A decision on this will be taken so that it can be implemented by April 1, 2027.

Finally, the GST has also announced common standards for notices and proceedings, under which no notices will be sent for a tax amount below ₹10,000. All pending notices so far issued that fall below this threshold will be withdrawn, the government said.

What has been done for services?

Service exporters have, in particular, had a problem with the GST system. India’s service export industry usually functions through branches abroad. However, the system currently says that the business done by those branches can’t count as exports. That is what the GST Council has now decided to change. Basically, an Indian company selling its services to a foreign client through an overseas branch can now avail of export benefits under the GST system. 

Another issue is that the GST system currently says that something can be classified as an export only if it leaves India. However, there are a number of services offered by Indian companies where the final product does not leave Indian shores. For example, when a car or a phone is sent to India for testing, it is destroyed after that testing is done and not sent back. So far, this was not classified as an export of services. 

Now, the GST Council has said that testing, repair, certification, and research done in India for a client abroad will be classified as an export of services even if the goods stay within the country. 

There have also been some compliance issues regarding when a payment has been deemed to have been received by an Indian exporter, with different bodies having different rules on the matter. The Council has now decided that the date on which an export payment is deemed to have been received will follow the Reserve Bank of India’s rules. 

Overall, these changes will not only eliminate uncertainty but will allow exporters of services to recover the tax paid on the export of their services and also recover this amount faster.

What more remains to be done?

During her press conference, Ms. Sitharaman said that 99% of GST reforms relating to rates as well as processes will have been completed when this latest tranche of changes comes into effect. She said that the Council is open to more reforms, and that those will be taken up as and when needed. However, the overwhelming bulk has been sorted out. 

In an indication of the incremental work that remains to be done, the Union Finance Minister announced that the Centre was going to be rolling out a faceless assessment system for Central GST-registered companies along the line of the system that is currently in place for income tax. It will be up to each State to come up with a similar system in their own jurisdictions. 

There are also some inverted duty structure issues that remain. Ms. Sitharaman said that rates were not discussed during this GST Council meeting. She added that rates will now be discussed once a year, and that any changes would be applicable from April 1 of the subsequent financial year. 

The Centre will propose a five-pronged plan for the next set of reforms to the Goods and Services Tax (GST) system at the upcoming GST Council meeting on October 8, according to sources in the Ministry of Finance. 

These reforms are aimed at automating and easing a lot of the current administrative bottlenecks in the GST system, and reducing the compliance burden, especially for small businesses. Rates, including the GST on the Merchant Discount Rate (MDR) on UPI transactions, will not be on the agenda.

The five-pronged proposal covers process reforms, structural reforms, ease of living and doing business, exports of services, and e-commerce. 

Some of the key changes proposed involve automatic invoice matching between buyers and sellers, reducing paperwork around claiming input tax credits (ITC), reducing the number of times small taxpayers have to file returns, and removing multi-state registrations for small businesses looking to sell across the country.

The proposals are to be discussed at the GST Council meeting and, if approved, will be implemented in a staggered manner to give businesses time to adapt to the new systems.  

Easing of processes

At the moment, 61% of GST taxpayers receive their GST registration within three working days without the need for a tax officer’s involvement, an official in the Ministry of Finance said. The Centre will now propose a streamlining of processes for the remaining taxpayers so as to avoid “unnecessary queries” and avoid rejections.

Further, the Centre will propose an upgrade of the existing invoice management system to match invoices in such a manner that corrections and changes made to an invoice by the seller are recorded at each step and automatically reflected in the buyer’s invoice. 

“This would avoid a large number of notices issued to taxpayers due to invoice mismatches,” the official explained. “The aim is to reduce these mismatch notices to zero.”

Credits and refund compliance

At the moment, businesses complain that their input tax credits are often held up from being credited to their accounts because their suppliers have not filed their returns. The Centre is now trying to address this issue. 

“A buyer who holds the invoice, has received the goods and has paid his supplier in full, including the tax, should keep their credit,” the official said. “It should not depend on whether someone further up the chain has paid or not.”

Further, the Centre is proposing that ordinary business costs, that currently do not get refunded as ITC, should be brought into the ITC system. In addition, taxes paid on input services, earlier not eligible for ITC, will be proposed to be made eligible. 

Refunds are also proposed to be acknowledged within 10 days, with 90% of the refund amount to be released on the basis of a ‘risk check’ using data obtained automatically from the Customs department and the banking system. 

Reduced paperwork and costs

The Centre will be sharing a concept note with the States on allowing small taxpayers who supply only to consumers to file their returns once a year instead of once a month as is currently the case. 

Another major demand of service providers is to widen the net of what constitutes an export. At the moment, providing a service to a foreign client through a branch abroad is not counted as an export of service. The Centre is proposing to amend this to categorise such business as an export. 

Similarly, testing, repair, certification and research done in India for a client abroad is proposed to be classified as an export of services even if the goods stay within the country. 

“For example, companies might send cars to India to be tested, which are then destroyed after the testing and not sent back,” the official explained. “That will now count towards services exports as far as tax treatment is concerned.”

Another proposal that could significantly reduce paperwork for small businesses is the one regarding where they are registered. At the moment, a seller needs a registered place of business in every State they sell in, which is not practical for most small sellers and thus limits them to their home State.

The Centre will propose that sellers be allowed to register once in their home State and, once verification is done, be granted access to sell in the rest of the country.  

Published – October 06, 2026 05:51 pm IST

The Centre will propose a five-pronged plan for the next set of reforms to the Goods and Services Tax (GST) system at the upcoming GST Council meeting on October 8, according to sources in the Ministry of Finance. 

These reforms are aimed at automating and easing a lot of the current administrative bottlenecks in the GST system, and reducing the compliance burden, especially for small businesses. Rates, including the GST on the Merchant Discount Rate (MDR) on UPI transactions, will not be on the agenda.

The five-pronged proposal covers process reforms, structural reforms, ease of living and doing business, exports of services, and e-commerce. 

Some of the key changes proposed involve automatic invoice matching between buyers and sellers, reducing paperwork around claiming input tax credits (ITC), reducing the number of times small taxpayers have to file returns, and removing multi-state registrations for small businesses looking to sell across the country.

The proposals are to be discussed at the GST Council meeting and, if approved, will be implemented in a staggered manner to give businesses time to adapt to the new systems.  

Easing of processes

At the moment, 61% of GST taxpayers receive their GST registration within three working days without the need for a tax officer’s involvement, an official in the Ministry of Finance said. The Centre will now propose a streamlining of processes for the remaining taxpayers so as to avoid “unnecessary queries” and avoid rejections.

Further, the Centre will propose an upgrade of the existing invoice management system to match invoices in such a manner that corrections and changes made to an invoice by the seller are recorded at each step and automatically reflected in the buyer’s invoice. 

“This would avoid a large number of notices issued to taxpayers due to invoice mismatches,” the official explained. “The aim is to reduce these mismatch notices to zero.”

Credits and refund compliance

At the moment, businesses complain that their input tax credits are often held up from being credited to their accounts because their suppliers have not filed their returns. The Centre is now trying to address this issue. 

“A buyer who holds the invoice, has received the goods and has paid his supplier in full, including the tax, should keep their credit,” the official said. “It should not depend on whether someone further up the chain has paid or not.”

Further, the Centre is proposing that ordinary business costs, that currently do not get refunded as ITC, should be brought into the ITC system. In addition, taxes paid on input services, earlier not eligible for ITC, will be proposed to be made eligible. 

Refunds are also proposed to be acknowledged within 10 days, with 90% of the refund amount to be released on the basis of a ‘risk check’ using data obtained automatically from the Customs department and the banking system. 

Reduced paperwork and costs

The Centre will be sharing a concept note with the States on allowing small taxpayers who supply only to consumers to file their returns once a year instead of once a month as is currently the case. 

Another major demand of service providers is to widen the net of what constitutes an export. At the moment, providing a service to a foreign client through a branch abroad is not counted as an export of service. The Centre is proposing to amend this to categorise such business as an export. 

Similarly, testing, repair, certification and research done in India for a client abroad is proposed to be classified as an export of services even if the goods stay within the country. 

“For example, companies might send cars to India to be tested, which are then destroyed after the testing and not sent back,” the official explained. “That will now count towards services exports as far as tax treatment is concerned.”

Another proposal that could significantly reduce paperwork for small businesses is the one regarding where they are registered. At the moment, a seller needs a registered place of business in every State they sell in, which is not practical for most small sellers and thus limits them to their home State.

The Centre will propose that sellers be allowed to register once in their home State and, once verification is done, be granted access to sell in the rest of the country.  

Published – October 06, 2026 05:51 pm IST

Image for representational purposes only.
| Photo Credit: Reuters

Prices of kitchen staples to electronics, from medicines and equipment to automobiles, will get cheaper from Monday (September 22, 2025) as the reduced Goods and Services Tax (GST) rates on about 375 items come into effect.

In a bonanza to consumers, the GST Council, comprising Centre and States, has decided to reduce tax rates on goods and services, from September 22 — the first day of the Navaratri.

Mass consumption items like ghee, paneer, butter, ‘namkeen’, ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC, washing machines will become cheaper.

-PTIRead the story here

Prices of kitchen staples to electronics, from medicines and equipment to automobiles, will get cheaper from Monday (September 22, 2025) as the reduced Goods and Services Tax (GST) rates on about 375 items come into effect.

In a bonanza to consumers, the GST Council, comprising Centre and States, has decided to reduce tax rates on goods and services, from September 22 — the first day of the Navaratri.

Mass consumption items like ghee, paneer, butter, ‘namkeen’, ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC, washing machines will become cheaper.

-PTIRead the story here

Daily essentials and food products will be cheaper from Monday (September 22, 2025), as leading FMCG companies have slashed prices, extending GST cut benefits to consumers.

The move is expected to lead to a spike in consumption and a surge in sales during the upcoming festival season, which starts with the Navratra celebrations.

FMCG companies have extended benefits of GST 2.0 with immediate reduction on price without any disruption, along with some discounts for festivals as they expect to enter a new growth phase after facing a few challenging quarters that saw persistent food inflation and slow pace of urban consumption.

Companies operating in the space of FMCG products have issued revised price lists with new MRPs on their products, including soaps, shampoo, baby diapers, toothpaste, razors, and after-shave lotions, effective from Monday (September 22, 2025).

Besides, firms operating in the food verticals have also slashed prices on products as snacks as namkeen and bhujia to sweets, coffee, tea, butter, ghee, ice-cream, chocolates, etc.

The makers have dispatched products with revised MRP tags to inventories of distributors, warehouses of e-coms and shelves of traditional kirana stores, absorbing the tax gap.

Moreover, existing stocks in the market have been aligned with revised new goods & service tax (GST) structure through special trade discounts and QPS schemes.

Leading FMCG firms such as Dabur, ITC, Procter & Gamble, Emami, Nestle, RCPL, Amul and HUL have come up with new price lists that have been communicated to their respective distributors and consumers through their respective websites or through advertisement in local dailies.

Home-grown firm Dabur has reduced the prices of Real Juice (pack of 1 Ltr) from ₹130 to ₹122 and Chyawanprakash (900 gm) from ₹475 to ₹440. It has also reduced the price of its Dabur Red and Meswak brand toothpastes (200 gm) to ₹135 from ₹153. Prices of digestive pills Hajmola (120 tab) have also been slashed to ₹65 from ₹70.

Nestle India has not only increased price of its instant noodles Maggi from 500 gm to 600 gm but also reduced the price from ₹120 to ₹116.

Similarly, it has also extended the price of Nescafé Classic (45gm) to ₹235, slashing the price of ₹30 and ₹95 on Nescafé Gold to ₹755.

ITC has slashed the price of Savlon (100 ml) to ₹374 from ₹400. It has reduced prices of cow ghee (1 litre) to ₹1,010 from ₹1,080 and Sunfeast Marie Light (956 gm pack) to ₹150 from ₹170.

Food & beverages major PepsiCo’s distributor Varun Beverages has slashed the prices of Tropica Apple Juice (1 litre) to ₹105 from ₹115, mango juice slice (1.2 litre) from ₹70 to ₹65 and Aquafina water bottle (1 litre) to ₹18 from ₹20. Prices of aerated-based drinks remain unchanged as they would continue to face 40% duty under GST 2.0.

GST 2.0 has two slabs of 5% and 18% as against the current four slabs of 5, 12, 18 and 28%. Most daily essentials have been placed in the lower 5%, barring detergent and cosmetics, which remain under the earlier 18% slab.

FMCG products such as hair oil, soap, face powders, shampoos, toothbrushes, and toothpaste, along with all food items, will come under the lower slab of 5% from the present 18%.

Confectionery major Ferrero has reduced its popular chocolate spread Nutella by ₹50 to ₹399 for a pack of 350 gm and ₹100 on its chocolate Ferrero Rocher to ₹879 for 300 gm.

Similarly, dairy and food brand Amul has also slashed the prices of products, including ghee, butter, ice cream, and snacks. It has reduced butter prices (100 gm) from ₹62 to ₹58 and ghee (1 litre) to ₹610 from ₹650.

Amul’s paneer (200g) will cost ₹95 from ₹99, and the range of its ice cream will start from ₹9 to ₹550, down from the earlier ₹10 to ₹600.

A recent study report released by industry body FICCI estimates that GST 2.0 will result in a short-term revenue loss but this can be compensated by the broader consumption boost, improved compliance, and wider coverage over time.

The country’s fastest-growing FMCG firm, Reliance Consumer Products Ltd (RCPL) had slashed price of its cow ghee (1 litre) by ₹50 to 750 and its Glimmer and Get real Soaps (pack of 5) from ₹135 to ₹120.

Leading FMCG major Procter & Gamble has reduced the prices of products under brands Vicks, Head & Shoulders, Pantene, Pampers (diapers), Gillette, Old Spice and Oral-B, among others.

As per the list, Vicks Action 500 Advance and Vicks Inhaler prices have been reduced from ₹69 to ₹64, as the GST rate has gone down from 12% to 5%t.

Home-grown FMCG firm Emami has reduced prices on Boroplus Antiseptic Cream, Navratna Ayurvedic Oil and talc, Zandu balm, etc.

Leading FMCG major HUL has also announced reducing prices of its consumer product range, including Dove shampoo, Horlicks, Kissan Jam, Bru Coffee, Lux and Lifebuoy Soaps, effective September 22.

Published – September 21, 2025 06:39 pm IST

Image used for representation purpose only.
| Photo Credit: Getty Images/iStockphoto