57th GST Council Meeting:
The 57th Goods and Services Tax (GST) Council meeting, chaired by the Union Finance Minister, approved comprehensive procedural and structural reforms to simplify GST registration, refunds, input tax credit, exports and litigation, with most changes expected to take effect from 1st April 2027.
Key Outcomes of the 57th GST Council meeting:
- GST Rate Rationalisation: No rate changes were made in the meeting. GST rate decisions will now be taken once a year and implemented from the beginning of the subsequent financial year.
- Simplified Registration: The Council approved greater certainty regarding documents required for GST registration. 61% of taxpayers currently receive automatic registration within three working days.
- Faster refunds: Refund applications are proposed to be acknowledged within 10 days instead of 15 days.
- Inverted duty structure: Input services will become eligible for refunds under the inverted duty structure from 1st November 2026.
- Reduced Litigation: No GST notices will be issued for tax amounts below Rs 10,000, while existing pending notices below this threshold will be withdrawn.
- Inter-State Movement of Goods: Goods can be inspected, detained or seized only by officers of the supplier or destination State. Interception will require specific intelligence and authorisation from a Joint Commissioner-level officer.
- Decriminalisation: The Council recommended removing arrest powers under GST and raising the prosecution threshold from Rs 1 crore to Rs 5 crore.
- Faceless Assessment: The Central Government plans to introduce a faceless assessment system for Central GST, modelled on the income-tax system. A framework will be released for public consultation before Budget 2027, with implementation planned for 2027–28.
- Service exports: Services provided by an Indian company to a foreign client through its overseas branch can qualify for export benefits.
Testing, repair, certification and research conducted in India for foreign clients may also qualify as exports of services even when the goods remain in India. - Overall significance: The reforms seek to improve ease of doing business, tax certainty, compliance efficiency, movement of goods and taxpayer trust, while reducing unnecessary litigation and enforcement.
