Archive · 9 Oct 2026
GST Council Advances Optional Annual Returns for Small Businesses
The GST Council is considering an easier tax-filing option for some small businesses.
It would be optional for businesses with turnover of up to ₹5 crore that sell only to customers who are not registered for GST.
These businesses would file one return each year but pay their taxes every three months.
The Council has approved the idea in principle, but the detailed rules still need to be considered.
The Council also recommended an easier way for some small sellers to register when selling goods online in other states.
It recommended that show-cause notices generally not be issued for disputed amounts below ₹10,000.
Other approved changes are intended to speed up GST refunds and simplify some procedures.
The GST Council approved in principle a concept note for an optional scheme for businesses with turnover up to ₹5 crore that supply exclusively to unregistered customers.
Under the proposed scheme, eligible businesses would file one annual return and pay GST quarterly; the detailed framework is due for consideration at the Council’s next meeting.
About 16.66 lakh of the 16.85 lakh taxpayers reporting only such supplies have turnover of up to ₹5 crore, according to the explanatory note.
The Council recommended simplified, automatic GST registration for qualifying small goods suppliers using e-commerce platforms in states or union territories where they lack a physical presence.
It also recommended a ₹10,000 minimum threshold for show-cause notices, while other decisions included faster refunds and changes to prosecution and registration procedures.
- Who
- The GST Council, small businesses supplying exclusively to unregistered persons, and qualifying small e-commerce sellers.
- What
- The Council approved in principle an optional annual-return and quarterly-payment concept note and recommended related GST process changes.
- When
- The decisions were reported on October 8, 2026; the detailed scheme framework is to be considered at the Council’s next meeting.
- Where
- India, including states and union territories covered by the GST measures.
- Why
- To simplify GST administration and reduce recurring compliance costs for small businesses.
- Proposed scheme
- Optional Annual Return Quarterly Payment (ARQP) scheme
- Turnover limit
- Up to ₹5 crore in the preceding financial year
- Eligible supplies
- Supplies exclusively to unregistered persons (B2C)
- Proposed filing and payment
- One annual return with quarterly tax payments
- Potentially eligible taxpayers
- About 16.66 lakh of 16.85 lakh taxpayers reporting only supplies to unregistered persons have turnover up to ₹5 crore
- Show-cause notice threshold
- The Council recommended a minimum threshold of ₹10,000 across CGST, SGST, IGST and cess, including for certain pending notices and appeals.
- Refund processing
- The acknowledgement period is to be reduced from 15 days to 10 days; the government expects 90% of claims to be sanctioned within three working days of acknowledgement, based on risk assessment.
