Several GST process reforms will start on November 1. They cover registration, returns and refunds. The 57th GST Council meeting approved them on October 8. These administrative changes will roll out in phases starting Sunday.
The first reform helps small sellers on e-commerce platforms. Many such online companies sell goods in several states or Union Territories. They have no physical presence in those places.
They can now name the platform’s warehouse there as their principal place of business. It covers sellers who pass on input tax credit. The limit is ₹2.5 lakh a month.
A seller must have a genuine presence in one state. Physical verification and Aadhaar authentication will be done there. Registrations in other states can be obtained with the platform’s consent. No tax officer needs to be involved.
This could help around 9.5 lakh small sellers. They can reach the national market without opening offices in every state. It also creates greater tax parity among competing e-commerce business models.
Simplified registration
The second GST reform simplifies registration for everyone. The GST department has specified the documents and information required for registration, effective from November 1. This will make filing and processing of applications easier.
The GST portal will also get a user-friendly interface. It will have clear navigation paths, drop-down lists and tooltips. This should reduce rejections and queries due to incorrect or missing details. Applications should also be processed faster.
Faster GST refunds
The third reform is about faster refunds. The system will automatically sanction full refund claims for excess electronic cash ledger balances. No officer will need to step in.
Refund claims for zero-rated supplies and inverted duty structure will also move faster. The system will sanction 90% of the claimed amount on a provisional basis. This will also happen without officer intervention. The system will first identify and evaluate risk.
Post-supply discounts
The fourth reform concerns post-supply discounts. From 1 November, the government will allow more flexibility in passing on such discounts. The earlier rules needed a pre-existing agreement.
They also needed a link to a specific invoice. These requirements will go. However, safeguards around credit notes will stay. The reversal of the matching input tax credit will also stay.
Mahesh Jaisingh, Partner and Indirect Tax Leader at Deloitte India, told PTI: “The change is particularly relevant for sectors such as FMCG, manufacturing and small businesses, where volume-based incentives, trade schemes and year-end rebates are integral to commercial arrangements. In specific, MSME sellers will have a working capital relief on account of this change being implemented”.
