Union Finance and Corporate Affairs Minister Nirmala Sitharaman chaired the 57th meeting of India’s Goods and Services Tax (GST) Council in New Delhi. While the 56th GST Council meeting focused on Next-generation GST reform, particularly rationalising the tax structure and reducing GST rates, the 57th meeting shifted its focus to procedural and administrative reforms.

Key GST Recommendations

The proposed reforms include removing arrest provisions under GST, increasing the prosecution threshold from INR 10 million (around USD 104,000) to INR 50 million (around USD 522,600), and reducing the general penalty from INR 25,000 to INR 10,000.

The Council also recommended expanding eligibility for input tax credits and refunds, simplifying GST registration and compliance procedures, and accelerating refunds to improve businesses’ working capital. Other measures focus on standardising GST notices and proceedings, facilitating the movement of goods across state borders, and introducing intelligence-based, authorised interception of goods to improve enforcement.

To support smaller businesses, the Council recommended simplified GST registration for small sellers operating through e-commerce platforms and measures to facilitate the export of services. Under the proposed mechanism, eligible small sellers may register in states or union territories where they have no physical business presence, provided the ITC they pass on does not exceed NR 250,000 (around USD 2,600), , excluding stock transfers between distinct persons.

To facilitate registration, sellers may declare an e-commerce operator’s warehouse in the relevant state or union territory as their principal place of business. Registration will be granted automatically through the GST system, subject to specified conditions. The GST Council also approved an optional scheme allowing annual returns with quarterly payments for small consumer-facing businesses with an annual turnover of up to INR 50 million.

Conclusion

The 57th GST Council’s recommendations signal a more business-friendly approach. By reducing compliance burdens for small enterprises and refining administrative procedures, the measures aim to make tax management simpler and support economic growth.