GST Council okays fast registration for non-risky businesses, seven-day refund window
Sep 3, 2025
Synopsis
The GST Council is likely to approve reforms aimed at easing compliance for small businesses, including faster registration and refunds. Amendments to the place of supply definition will benefit Global Capacity Centres and ITES, while rate rationalization discussions continue. The council also addressed post-sales discounts and appellate tribunal issues, focusing on reducing litigation and supporting small taxpayers and exporters.
The goods and services tax (GST) council on Wednesday is learnt to give its go-ahead to a series of reforms to bring relief to small businesses, which includes reducing registration process down to three days for non-risky businesses, to work on the proposal for pre-filled returns, and a seven-day refund for sectors like textile, chemical, fertilizers and pharma sector.
The all-powerful GST council is also learnt to approve the amendment in the definition of the place of supply for the intermediaries, which will allow them to claim input tax credit, a move which will make India an attractive hub for Global capacity centres and ITES services.
The discussion on rate rationalisation will continue on Thursday, with opposition states demanding a detailed estimation on revenue loss to the states, which was agreed by the centre.
Opposition states continued to push for compensating them for the revenue loss, which it said will badly affect the state finances.
The Council also asked the CBIC to come up with detailed circular clearing air on GST on post sales discounts, formulating rules for a single-judge bench for GST Appellate Tribunal and proposed amendment in CGST Act, 2017 to empower an existing Authority Appellate Tribunal, to function as National Appellate Authority for Advance Ruling to clear the backlog of litigations.
The Council however, proposed that the current biometrics Aadhaar based registration process will continue for the risky businesses.
The risk parameters shall be developed by the Law Committee.
For small artisans and businesses, where refund is below Rs 1,000 crore, the money will be automatically refunded to them.
The council also accepted the law committee recommendation that GST would be levied in cases where a dealer undertakes specific sales promotional activities, such as advertisement campaigns, co-branding, special sales drives, exhibition arrangements only when such services are explicitly stated in the agreement.
Experts said the move will give significant relief to small taxpayers and exporters.
“It is essential that the place of supply for intermediary services is by default treated as the location of the service recipient,” MS Mani, Tax partner, Deloitte said.
“This would help GCCs and other exporters of services to avoid input tax refund claim rejections,” he said, adding that the amendment should be made on a retrospective basis to also bring closure to the existing litigation at various levels on this issue.
Swift refund process will unlock their capital stuck, with smooth refund process, experts added.
“If provisional refund is allowed in case of inverted duty structure it will be a significant positive step and will provide a much-needed boost to industry liquidity and ease working capital pressures,” Saurabh Agarwal, partner, EY said.
He added that while the intent behind the states' request for anti-profiteering law is understandable, a price-sensitive market like India naturally passes on benefits to the end consumer.
“Implementing these provisions could create a substantial administrative burden for both businesses and the government, potentially hindering the very reforms they seek to support,” he added.
[The Economic Times]
