The highlight of 57th GST Council Meeting headed by the Union Finance Minister, Nirmala Sitharaman are as follows:

• No GST rate changes: Rate matters will be considered once a year at a meeting dedicated to rates.
• Removal of arrest powers: The note proposes removing arrest powers under GST and increasing the prosecution threshold from ₹1 crore to ₹5 crore. Minimum punishment will be removed, leaving sentencing to judicial discretion.
• Lower general penalty: The general penalty, where no specific penalty applies, will be reduced from ₹25,000 to ₹10,000.
• No notices below ₹10,000: No notice will be issued below the monetary threshold of ₹10,000.
• Protection for genuine ITC buyers under examination: An officers’ committee will examine safeguards for buyers who hold valid invoices, receive goods and pay suppliers in full. Its study is due within three months, with an agenda for the next Council meeting.
• Wider input tax credit: ITC will be allowed on employee health and life insurance, telecommunications towers, pipelines outside factories, free samples, and expired stock that must legally be destroyed.
• Relief for resold services: Changes will address cascading taxation when services are purchased and resold in the same business line, including specified hotel accommodation, restaurant, catering and passenger transport services.
• Input service refunds under inverted duty structure: Refund eligibility will extend to input services for credit availed on or after 1 November 2026.
• Plant and machinery refunds: Exporters and businesses facing an inverted duty structure will become eligible for refunds on plant and machinery credit availed on or after 1 April 2027, calculated at one-sixtieth of the credit per month.
• Faster, automated refunds: Acknowledgement time will fall from 15 to 10 days, with deemed acknowledgement if no acknowledgement or deficiency memo is issued. Risk-assessed 90% refunds will be sanctioned automatically within three working days of acknowledgement. Excess cash ledger refunds will also be fully automated.
• Simpler registration and corrections: Specified registration amendments will be accepted automatically. Return corrections for earlier periods and wrongly entered buyer GSTINs will be permitted, with credit flowing through the Invoice Management System.
• Annual returns for small B2C businesses: An optional scheme has been approved in principle for businesses with turnover up to ₹5 crore supplying only to consumers—annual returns with quarterly tax payments. Details will go to the next Council meeting.
• Transit checks restricted: Only source and destination States will be permitted to inspect goods in transit. Stops will require specific intelligence and prior authorisation from an officer of at least Joint Commissioner rank.
• Easier business closure: Cancellation will be automated in stages, and the final return will become part of the closure application. Registrations suspended or cancelled for missing returns or bank details will be restored once the deficiency is corrected.
• Expanded service export benefits: Changes will cover qualifying services supplied through overseas branches and specified work in India on foreign clients’ goods, even where those goods remain in India. Export payment recognition will align with RBI rules.
• Simpler interstate e-commerce registration: Eligible small sellers will be able to declare an e-commerce operator’s warehouse in another State as their principal place of business there, subject to the prescribed conditions.
• Uniform treatment across platforms: Tax treatment will depend on the service actually delivered, ensuring consistency across different e-commerce business models.

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