GST Council to hold 57th meet on Sept 12

New Delhi: The GST Council is set to meet on September 12, nearly a year after its last meeting, to consider reforms including making it easier to get blocked input tax credit (ITC), simplifying the GST treatment of corporate guarantees and allowing small businesses to register in multiple states.

The 57th meeting of the Council will be held in New Delhi, with the meeting of tax officers scheduled for September 11, according to an official communication issued by the GST Council Secretariat.

A key proposal is protecting buyers from losing input tax credit (ITC) if suppliers fail to deposit taxes with the government, said people familiar with the deliberations.


In such cases, it is proposed that buyers will get ITC if they establish that the payment, including the GST component, was made through banking channels or other prescribed payment documents.

The GST Council may also consider relaxing existing provisions to allow companies to claim ITC on vehicles purchased in the company's name for employees' use and on group health and life insurance policies bought for employees.

The Council may also examine the GST framework for corporate guarantees provided within a group, with businesses seeking greater clarity and a simpler approach to valuation and taxation of such arrangements.

Another possible area of discussion is allowing multiple-state GST registration for small businesses, which could help enterprises operating across states streamline compliance and reduce the administrative burden associated with maintaining separate registrations.

Businesses are also looking for movement on refund norms, unutilised ITC and other issues that have remained unresolved, particularly those affecting working capital and compliance costs.

The proposals are part of the committee's ease of doing business review and are expected to be considered at the next GST Council meeting.

Experts say the next phase of reforms should reinforce GST's core objective of making the tax regime simpler, more predictable and easier to comply with.

"The upcoming GST Council meeting is an opportunity to inject fresh momentum into the reform agenda after nearly a year, with businesses looking for greater certainty on issues that have remained unresolved for far too long," said Manoj Mishra, partner and tax controversy management leader, Grant Thornton Bharat.

The focus, he said, should now shift from incremental changes to improving the quality of the GST framework itself.

Corporates have also flagged the need for a mechanism to regularise legacy tax positions, particularly in online gaming, and address genuine ITC hardships arising from supplier defaults.

"Equally important is reducing interpretational ambiguities that continue to drive avoidable litigation and compliance costs," Mishra said.

In the last GST Council meeting, the council had cleared GST 2.0.

The Centre has proposed GST 2.0, with a two-tier tax slab of 5% and 18%, doing away with the tax slab of 12% and 28%, and a special slab of 40% for the sin goods, limiting it to five to seven items.