57th GST Council Meeting Recommendations
57th GST COUNCIL MEETING โ KEY RECOMMENDATIONS ๐ฎ๐ณ
1. Registration & Cancellation: Simplified registration, automatic updation of details and phased automatic cancellation, subject to prescribed conditions.
2. E-commerce Sellers: Simplified GST registration proposed for small goods sellers selling through e-commerce platforms in States where they have no physical presence, subject to conditions.
3. GST Returns & ITC: New portal facilities proposed to correct tax liability and ITC mismatches, improve reconciliation and track ITC reversals/reclaims. Proposed mechanism may apply from April 2027.
4. Faster Refunds: Automatic cash ledger refunds, reduction in acknowledgement/deficiency memo timeline from 15 to 10 days and provisional refund of 90% of eligible zero-rated and inverted duty structure claims, subject to risk assessment.
5. Notices, Penalties & Appeals: Minimum โน10,000 threshold proposed for show cause notices; maximum general penalty to reduce from โน25,000 to โน10,000. Reduced penalties and capped appeal pre-deposits proposed in specified cases.
6. ITC Reforms: Wider ITC refund eligibility proposed for capital goods and input services. Restrictions on ITC proposed to be removed for specified expenses, including outdoor catering, health and life insurance, certain infrastructure and other listed items.
7. Export of Services: Changes proposed to facilitate export benefits for Indian service providers, clarify permissible foreign currency/INR receipts and provide clarity on specified supplies delivered through SEZs/FTWZs.
8. Arrest & Prosecution: GST arrest powers proposed to be withdrawn. Prosecution threshold to increase from โน1 crore to โน5 crore, with rationalisation of specified offences and punishments.
9. E-way Bills: Vehicle interception proposed only on specific intelligence with authorised approval. Transit-State inspections to be restricted, subject to exceptions for missing e-way bills or transport documents.
10. Intellectual Property Rights: Temporary and permanent transfers of IPR proposed to be uniformly treated as supplies of services.
11. Blocking of ITC: Taxpayers to get an opportunity to object and seek a personal hearing before a decision on blocking electronic credit ledger amounts.
12. Late Fee Waiver: Late fee on specified delayed returns proposed to be waived for taxpayers with preceding-year turnover up to โน5 crore, if filed by the end of the month in which they were due.
13. Other Compliance Reforms: Clarifications proposed on ISD, banking ITC, pre-deposits and demonstration vehicles. E-invoicing proposed for specified reverse-charge purchases from unregistered persons and import of services for taxpayers with turnover of โน5 crore or more.
14. Small Businesses: Optional Annual Return Quarterly Payment (ARQP) scheme approved in principle for businesses with turnover up to โน5 crore exclusively making B2C supplies.
15. GSTAT: Amendments approved to align GST Appellate Tribunal provisions with the Tribunals Reforms Act, 2026 and related rules.
16. GST on Goods:
* GST classification of sublimation paper, toys and qualifying seaweed-based bio-stimulants clarified.
* ITC eligibility for second-hand vehicle dealers clarified.
* RCM proposed on specified waste and scrap purchases from unregistered suppliers; 2% TDS on specified registered-to-registered supplies.
* NIL GST proposed on Isabgol seeds; retreaded tractor tyre rates to align with new tyres.
* Specified past compensation cess liabilities of CSDs and Unit Run Canteens to be exempted.
17. GST on Services:
* 5% GST option proposed for specified EV transport/rental services; 5% GST without ITC for specified e-commerce delivery services.
* Limited ITC proposed for eligible restaurant, hotel, gym and fitness services.
* Exemptions proposed for specified helicopter transport, seed storage, coffee curing, shipping and highway-related services.
* Simplified self-certification proposed for eligible R&D services.
* GST treatment clarified for vehicle leasing recoveries and specified banking transactions.