GST rate changes to be considered only once a year, says Sitharaman

The Council also approved measures to reduce penalties and simplify procedures for taxpayers. These changes are intended to address concerns raised by businesses over compliance costs, prolonged disputes and stringent enforcement practices.

Relief for small businesses

Another significant proposal involves introducing an optional annual return filing scheme for small businesses with turnover of up to Rs 5 crore that sell exclusively to consumers. The proposed arrangement could benefit approximately 16 lakh businesses by reducing the frequency of return filing and associated compliance requirements.

The Council also examined measures to accelerate tax refunds and address difficulties faced by genuine buyers in claiming input tax credit. These reforms are expected to improve administrative efficiency while reducing the burden on businesses operating within the GST framework.

Greater tax certainty

The annual rate revision framework is expected to help businesses make longer-term financial and operational decisions, particularly in sectors where frequent tax changes can affect supply chains, contracts and consumer prices. It would also provide taxpayers with a more predictable schedule for adapting their accounting and compliance systems.

The decisions taken at the meeting form part of the government's continuing efforts to simplify GST administration following the tax rate restructuring implemented last year. Several procedural and enforcement-related reforms are expected to take effect from April 1, 2027, subject to the necessary legal and administrative changes.