2 hrs ago
GST Council Leaves Rates Unchanged, Advances Refund and ITC Reforms
The GST Council met to discuss how the tax system works.
It did not change GST rates, and UPI merchant discount rates were not discussed.
The Council wants to make refunds faster for businesses.
Most refund claims are expected to be checked by a computer system that uses risk assessment.
The system is meant to approve 90% of claims within three working days after they are acknowledged.
A claim will count as acknowledged if officials do not respond within 10 days.
The Council also discussed protecting honest businesses from losing tax credit because a supplier further up the chain failed to follow the rules.
It also proposed making some other tax tasks simpler.
The GST Council made no changes to tax rates and did not discuss UPI merchant discount rates.
A proposal would protect compliant taxpayers from automatically losing input tax credit because of a supplier’s default or fake credit elsewhere in the supply chain.
The deadline to acknowledge refund claims will fall from 15 days to 10 days; claims without an acknowledgement or deficiency memo by then will be treated as acknowledged.
Under risk-based processing, 90% of refund claims are to be sanctioned within three working days of acknowledgement, compared with seven days currently.
Excess cash-ledger balances will be refunded automatically, while the Council also proposed simplifying registration, returns and business closure.
- Who
- The GST Council, with Finance Minister Nirmala Sitharaman describing a proposal on input tax credit.
- What
- The Council left GST rates unchanged and discussed refund processing, input tax credit protections and compliance reforms.
- Where
- The article does not specify where the meeting took place.
- When
- At the latest GST Council meeting; the article does not provide a date.
- Why
- To make GST administration faster and less burdensome for compliant businesses and taxpayers.
Key facts
- GST rates
- Unchanged at the meeting.
- UPI merchant discount rates
- No discussion took place, according to the article.
- Refund acknowledgement
- The time limit is to be reduced from 15 days to 10 days.
- Refund sanctioning
- 90% of claims are to be sanctioned through risk-based processing within three working days of acknowledgement; the current period is seven days.
- Cash-ledger refunds
- Refunds of excess cash-ledger balances will become fully automatic, without officer involvement.
- Refund claim composition
- The Council said 65% relate to exports or an inverted rate structure, and 55% of these claims are classified as low risk.
- Input tax credit proposal
- The proposal aims to prevent genuine taxpayers from automatically losing ITC because of a supplier’s default or fake credit in the supply chain.
Quotes
Nirmala Sitharaman
Finance Minister who described an agenda discussed at the GST Council meeting
“There was an agenda on amending Section 162C of the CGST Act, where the ITC passed on to the final genuine taxpayer was blocked or reversed when any one of the suppliers in the value chain allegedly failed to deposit the ITC accrued or passed fake ITC”
businesstoday.in
Sources
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