The 57th GST Council meeting, scheduled for October 7, is likely to focus on a series of major business-friendly process reforms, with the government seeking to simplify compliance and address long-standing industry concerns, finance ministry sources said.
The Council is expected to limit major tax rate-related decisions, with the focus shifting to procedural changes after the Centre and states agreed to the sweeping rate reforms unveiled at the September 2025 meeting, sources said.
“Most of the announcements will be process reforms-related. They are big announcements, and it took some time to bring states on board,” a senior finance ministry source said.
The proposed reforms are aimed at making the GST regime more business-friendly by easing compliance for legitimate taxpayers, while retaining safeguards against deliberate defaults and fraud, the source said.
“We have realised that those who deliberately default or commit fraud are just a handful of businesses. We cannot make life difficult for the majority because of a few culprits,” the source said.
The Council is likely to consider changes relating to GST registration, refunds and the utilisation of input tax credits (ITC), another official said.
One of the key issues expected to receive attention is the protection of bona fide buyers from the consequences of tax defaults by their suppliers. Industry has repeatedly raised concerns over the denial of ITC to recipients when suppliers fail to deposit the tax collected from them.
The Council may examine mechanisms to protect eligible taxpayers who have fulfilled their compliance obligations, while ensuring that fraudulent claims are prevented.
Reforms to the GST refund mechanism under the inverted duty structure, particularly in relation to input services, are also expected to be considered. Under the inverted duty structure, businesses face a situation where the tax rate on inputs is higher than that on their output supplies, resulting in accumulated ITC.
The Council could also examine mechanisms for the seamless transfer of ITC across states for taxpayers operating in multiple states, along with the rationalisation of blocked credits relating to construction and works contracts.
CA Dilip B Desai, founder & chairman, Desai Haribhakti & Co, said: "The Council might aim to resolve systemic anomalies where buyer credits are blocked due to supplier return defaults, creating a more predictable framework for tax reconciliations. Ultimately, these reforms are expected to provide much-needed trade facilitation, reduce mismatch litigation, and bring much-needed relief to compliant taxpayers."