Next Phase of GST Reforms to Make Compliance Easier: PM Modi
New Delhi: Prime Minister Narendra Modi has highlighted the next phase of Goods and Services Tax (GST) reforms, saying the proposed changes will make compliance easier and improve the refund process for taxpayers.
According to the Prime Minister, simpler tax processes can give businesses greater confidence to invest, expand and grow. He said the reforms would also strengthen the foundation for building a Viksit Bharat.
PM Modi was referring to an article by Finance Minister Nirmala Sitharaman, who outlined the government's approach to the next phase of GST reforms ahead of the upcoming GST Council meeting on October 7.
Next-Gen GST Focuses on Simpler Compliance
Finance Minister Nirmala Sitharaman said the next phase of GST reforms will focus on making the taxation system simpler and more predictable for businesses and households.
She said the reforms are aimed at delivering two key objectives: providing relief to taxpayers and supporting stronger economic momentum.
The proposed process reforms will cover several important areas of GST administration, including registration, returns, refunds, dispute resolution and the flow of input tax credit.
What Areas Could See Changes?
| Area | Proposed Focus |
|---|---|
| Registration | Make the registration process simpler for taxpayers. |
| Returns | Reduce compliance complexity and the time required for filing. |
| Refunds | Improve and streamline the refund process. |
| Dispute Resolution | Make the process more efficient for taxpayers and authorities. |
| Input Tax Credit | Improve the flow and ease of input tax credit under GST. |
GST Collections and Economic Activity
Sitharaman also highlighted the performance of GST collections and taxable supplies following the rate rationalisation that came into effect on September 22, 2025.
According to the Finance Minister's assessment, the next-generation GST framework is intended to support economic activity while making the taxation system more predictable for taxpayers.
The government expects easier compliance to help businesses spend less time and resources dealing with procedural requirements and focus more on their operations and expansion.
GST Council May Discuss Arrest Powers
The upcoming GST Council meeting is also expected to discuss a separate legal issue concerning the power of tax officials to arrest taxpayers during GST investigations.
The proposal is part of broader suggestions from the GST Council's Law Committee on the possible decriminalisation of certain provisions under GST laws.
The issue has gained attention amid concerns that failure to pay tax in some cases may not necessarily involve deliberate wrongdoing.
What Does Section 69 of the CGST Act Provide?
Under the current GST framework, the Commissioner can authorise an arrest under Section 69 of the Central Goods and Services Tax (CGST) Act when there are reasons to believe that a person has committed specified serious offences covered under Section 132.
The proposal being discussed could remove the standalone arrest provision from the GST framework, meaning tax officials would no longer have the same power to arrest a taxpayer during a GST investigation under this provision.
Serious GST Fraud Cases Could Still Face Prosecution
The current thinking is that serious cases involving allegations such as fake invoicing, fraudulent input tax credit and fake refund claims could be pursued through criminal prosecution under provisions of the general criminal law, including the Bharatiya Nyaya Sanhita (BNS).
The GST Council's Law Committee consists of officials from both the Centre and the states. It examines legal provisions under GST laws and makes recommendations to the GST Council regarding statutory amendments and clarifications.
What the Next GST Phase Could Mean for Taxpayers
- Simple GST registration procedures
- Easier return filing and compliance
- Improved refund processing
- More efficient dispute resolution
- Smoother input tax credit processes
- Greater predictability for businesses
Overall, the proposed next phase of GST reforms is aimed at reducing procedural difficulties while making India's indirect tax system more predictable and easier to comply with.
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