The government is preparing to move the Goods and Services Tax (GST) reform agenda into its next phase, with the focus shifting away from rate rationalisation
towards making the tax system simpler, more technology-driven and less dispute-prone. Sources in the Finance Ministry told Times Now that no GST rate changes are currently on the agenda for the October 8 GST Council meeting. Instead, the next leg of GST 2.0 is expected to concentrate on reducing compliance burdens, improving input tax credit (ITC) flows, speeding up refunds and limiting unnecessary interaction between taxpayers and tax officials. The broader reform programme is expected to be implemented in phases through 2027. While the government is not looking at another rate reset at the October 8 meeting, future changes could follow a more predictable schedule. Rate revisions are proposed to be considered annually from April 1, allowing businesses greater certainty while planning prices, costs and investments. The focus is now expected to be on improving how GST works after a transaction is recorded, particularly in areas such as invoice validation, refunds, registration and ITC. Invoice Matching To Strengthen ITC Checks One of the key proposals is the introduction of invoice matching to validate input tax credit claims. The move will reduce discrepancies between invoices and tax records and, in turn, limiting show-cause notices triggered by mismatches. The government is also examining changes to ITC rules that could protect genuine buyers even when tax has not subsequently been deposited further down the supply chain. This could reduce the compliance and financial risks faced by businesses that have acted in good faith. Another proposed change is to bring more business-related costs within the ITC framework, which could help lower embedded tax costs across sectors. Faster GST Refunds Under Proposed Risk-Based System Refund processing is another area where the government wants to reduce waiting periods. Under the proposed framework, GST refund applications could be acknowledged within 10 days, while around 90 per cent of eligible refunds may be released after risk-based checks. The scope of refunds is also proposed to be expanded to cover services as well as plant and machinery. GST Registration And Closure To Become Simpler The government is also looking at making GST registration more seamless. At present, around 61 per cent of registrations are already being approved automatically within three working days, and the process is expected to be further streamlined. The same principle could be extended to the closure of registrations. Proposed reforms seek to make cancellation as straightforward as registration, while allowing automatic restoration when taxpayers rectify procedural lapses. For smaller taxpayers selling only to consumers, annual GST return filing could also replace the existing monthly compliance requirement. Easier Rules For Service Exports GST treatment for services provided to overseas customers is another area being examined. Proposed changes could make it easier for Indian businesses to claim GST benefits on activities such as testing, repair, certification and research and development carried out in India for foreign clients. The changes could particularly benefit businesses operating in knowledge-intensive and specialised service segments. E-Commerce Sellers Could Get Wider Market Access The reform package may also expand opportunities for sellers operating through e-commerce platforms. Sellers could potentially obtain pan-India access after completing verification in their home State, reducing the compliance hurdles associated with expanding operations across State borders. Decriminalisation Of GST Offences Under Review The government is also considering a major shift in its approach to GST-related offences. A large number of offences could be decriminalised, with the system placing greater stress on recovery of dues, interest and proportionate penalties. The objective is to ensure that enforcement remains effective while avoiding disproportionate action for procedural or technical lapses.
