4 hrs ago
GST Council Eases ITC Risks and Interstate Rules for Sellers
The GST Council announced several changes to how the tax system works.
One proposal would help honest businesses keep their tax credit if another business in their supply chain fails to follow the rules.
Small sellers using online shopping platforms would find it easier to sell in other states.
They could use the platform’s warehouse there for registration, but they would still need a physical presence in one home state.
The Council did not change GST rates.
It plans to make many refunds and some registrations faster and more automatic.
Some businesses may also be able to claim tax credit on additional expenses.
The Council also announced simpler rules for certain small businesses and fewer routine stops for goods being transported.
The Council proposed protecting genuine taxpayers from losing input tax credit because of a supplier’s alleged default elsewhere in the supply chain.
Small e-commerce sellers will be allowed to use a platform warehouse in another state as their principal place of business there, with the operator’s consent.
GST rates were unchanged, while refund processing is set to become faster and more automated.
The Council announced expanded input tax credit availability for specified expenses, including employee health and life insurance.
Other measures include faster low-risk registrations, simpler compliance for some small taxpayers, and reduced enforcement checks and penalties.
- Who
- The GST Council, taxpayers, and small sellers using e-commerce platforms.
- What
- The Council announced proposed ITC protections and interstate registration relief for small online sellers, alongside other GST administration changes.
- Where
- India.
- When
- At the 57th GST Council meeting; the article does not specify a date.
- Why
- To protect compliant taxpayers and reduce barriers and administrative burdens in GST compliance.
Key facts
- Meeting
- 57th GST Council meeting
- GST rates
- No rates were changed at the meeting.
- Refund acknowledgement
- The acknowledgement period is to be reduced from 15 days to 10 days.
- System-sanctioned refunds
- 90% of refund claims are to be sanctioned through the system based on risk assessment, with orders within three working days of acknowledgement.
- Small taxpayer scheme
- An optional scheme was approved in principle for taxpayers with turnover up to ₹5 crore who supply only to consumers.
- Prosecution threshold
- The threshold is to rise from ₹1 crore to ₹5 crore.
- General penalty
- The general penalty is to fall from ₹25,000 to ₹10,000.
Sources
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