Centre to propose five-pronged reform plan at GST Council meeting on October 8

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.