Full Breakdown
GST Council to Unveil “GST 2.0” Reforms Aimed at Faster Refunds, Simplified Registration and De-criminalisation
By Drooid · · How we work
Core Event
- When: October 8 2026 – the 57th GST Council meeting in New Delhi.
- What: A five-pronged reform package targeting process reforms, structural reforms, ease of doing business, export of services and e-commerce. No GST-rate changes are proposed.
Background & Context
The GST regime turned nine on July 1 2026. After the major rate rationalisation in September 2025, the tax base has stabilised and collections remain steady. The September 2025 council meeting introduced wide-range rate changes; the upcoming meeting shifts focus to administration.
Data & Statistics
- Registrations: 61 % of GST registrations are granted within three working days without officer intervention (Ministry of Finance).
- Refunds: Acknowledgement currently takes 21-45 days. The proposal seeks acknowledgment within 10 days and release of 90 % of the amount after a risk-based check, aiming for an overall processing time of 17 days.
- Exporters: Over 38 000 export taxpayers could receive cash refunds on services and plant-machinery, unlocking capital tied up in input tax credit.
- E-commerce sellers: About 9.5 lakh small sellers could use platform warehouses as their registered place of business in states where they lack premises.
- Low-value notices: Cases with demand below INR10 000 represent roughly 20 % of GST litigation by volume but a negligible share of revenue.
Why It Matters / Impact
- Faster refunds and automatic credit for ordinary business costs aim to free working capital for FMCG, pharmaceuticals and exporters.
- A single-state registration for multi-state sellers would curb duplicate documentation and audit requests, lowering compliance costs.
- De-criminalisation and removal of arrest powers shift enforcement toward civil recovery and data-driven detection, preserving strong action against deliberate fraud while easing the burden on honest businesses.
- Raising the prosecution threshold from INR1 crore to INR5 crore narrows criminal proceedings to high-value cases, reducing the risk of prosecution for routine disputes.
Official Statements & Responses
- “With high GST collections across the past few months, the GST Council in its next meeting scheduled on October 8 would be able to decide on several issues faced by businesses including relaxation of input tax credit restrictions, reducing complaints for service providers, providing faster refunds, etc., without being unduly worried about the impact on GST collections,” — MS Mani, Partner, Deloitte India
- “With arrest removed and prosecution reserved for more serious cases, the focus is increasingly on using GSTN’s data capabilities to detect fraud rather than relying on coercive powers,” — Managing Partner Rajat Mohan
- The Centre will allow small sellers to register once in their home state and use e-commerce platform warehouses for other states, eliminating repeated physical verification.
- The government also plans to introduce a faceless CGST interface and to phase-in the reforms through 2027.
Conflicting Reports & Gaps
- Refund timeline: Industry Times cites a target of “around 17 days” for complete refunds, while Business Today and official statements describe a two-step process (10-day acknowledgment + 7-day processing). The exact total duration remains unsettled.
- Registration scope: It is unclear whether the single-registration mechanism will be mandatory for all multi-state sellers or optional, as sources provide differing details.