Union Home Minister Amit Shah will soon begin discussions with state governments and Central ministries to speed up the process of simplifying India’s Goods and Services Tax (GST) system. The aim is to resolve ongoing disagreements and move forward on important changes, especially around the removal of the 12% tax slab

Tweaks in GST structure not going to be easy
One of the major proposals is to scrap the 12% GST rate entirely. Items under this slab could either be moved down to the 5% rate or pushed up to the 18% rate. While this would simplify the tax structure, it could also lead to a revenue loss of about Rs 70,000 to Rs 80,000 crore for the Centre and states combined.

This has made many states—both those ruled by the BJP and those by the Opposition—hesitant to agree. Shah’s role will be to help build consensus among all parties before changes are proposed in the GST Council.

The GST Council, which will meet shortly, is expected to comprehensively review the eight-year-old regime focused on reducing tax on several consumer-focused items in the 12% bracket as well as lowering the burden on items such as air conditioners, which are in the top bracket.

Besides, with the compensation cess - money released to states to offset any revenue loss because of switch to GST - due to end in March, a plan on imposing a cess on some of the sin goods, such as tobacco, is also expected to be finalised to ensure that states don't have to bear a significant revenue hit.

Concern that they will be losing out on revenue has been among the principal factors why states oppose tax cuts, including those which they consider to be desirable.
The Centre is keen on a liberal view on pure term insurance plans, which currently attract 18% GST and put it in the nil bracket, although the life insurance companies have lobbied for 12%.
Proposal to do away with 12% GST rate slab on table
Any reduction in GST on insurance will mean big relief, with the Centre keen to protect the interests of middle-class buyers.

Following reports of notices issued to small traders by the Commercial Tax Department, the state government clarified on Friday that the action was based on data collected from Unified Payments Interface (UPI) service providers to ensure compliance with Goods and Services Tax (GST) laws.

Under the GST Act, in force since July 1, 2017, suppliers with an annual turnover exceeding Rs 40 lakh (for goods) or Rs 20 lakh (for services) are required to register for GST. This turnover includes both taxable and exempt goods and services, although tax is applicable only on taxable items.

The department said while essential items like bread are exempt from GST, packaged snacks attract a 5% tax. It said UPI-based transaction data from 2021–22 to 2024–25 showed that many traders had received over Rs 40 lakh via UPI alone, excluding cash and other payment methods, indicating even higher total turnover. Based on this data, the department issued notices to traders.

Union Commerce and Industry Minister Piyush Goyal on Sunday promised to recommend a reduction in the Goods and Services Tax imposed on handicrafts and handloom products to help promote the sector in Jammu and Kashmir.

Addressing the FTII: Traders Conclave - 2025 in Srinagar, the Union Minister said, "The issue of GST levied on handicrafts and handlooms was brought to my attention by two or three system delegations. I have suggested that they submit an application regarding this matter to the Finance Ministry as well as to me so that we can explore what relief can be provided. We will try to reduce the GST rate from 12 per cent to 5 per cent on these items, which would help promote the handloom and handicraft sectors -- especially in Jammu & Kashmir. We will make efforts to find a way forward in this regard."

"One of the topics raised was the need for packaging units where new designs and technologies could be introduced to better promote local products such as handicrafts, horticulture items, pashmina shawls, and handlooms," Goyal said.

The Union Minister said that Jammu and Kashmir will soon get a Centre of Excellence for Packaging and Design.

The state govt is expecting to unlock Rs 20,000-25,000 crore pending as outstanding taxes from public sector units, financial institutions, and infrastructure holding companies of state and central govts since before the introduction of GST in 2017 by offering an amnesty. On Thursday, the state finance department proposed an amendment to its Maharashtra Settlement of Arrears of Tax, Interest, Penalty for Late Fee Act 2025 to make the amnesty scheme more comprehensive by including tax-paying PSUs, banks, and infrastructure companies from whom thousands of crores are due. The amendment, tabled in the state legislative assembly, will be discussed prior to approval.
"Earlier in March, when the Act was passed, public sector units registered under the Companies Act were mentioned. However, we missed including those which are registered as state or central govt enterprises, authorities, or entities," said a senior SGST official. Such an amendment, tax experts say, will help the state recover at least Rs 10,000 crore in taxes pending with banks, municipal bodies, and infrastructure companies such as Mhada, MSRDC, MORDA, besides PSUs like HPCL, BPCL, IOC, Mazagon Dock Ltd, etc.

The Goods and Services Tax (GST) rates on items like cigarettes, carbonated drinks, and high-end cars may go up soon, as per a report by NDTV. According to government sources cited by NDTV Profit, the center is considering replacing the current compensation cess with a new health and green cess.

At present, these products fall under the highest GST bracket of 28 per cent and also attract a compensation cess. This additional levy was introduced in 2017 to make up for the revenue states lost due to the shift to GST.

Compensation cess ends in 2026
The compensation cess is scheduled to end on March 31, 2026. A Group of Ministers (GoM), led by Minister of State for Finance Pankaj Chaudhary, is now reviewing what should replace it. The panel is exploring the idea of a new cess focused on health and environmental concerns, writes NDTV Profit, citing its sources.

New GST structure under discussion
In addition to cess changes, the government is also looking at a major revamp of the GST rate structure. According to NDTV Proft sources, the GST council is thinking of moving to a simpler three-rate system by scrapping the 12 per cent slab.

India’s gross Goods and Services Tax (GST) collection went up by 6.2 per cent on-year for the month of June to Rs 1.84 lakh crore, government data showed on Tuesday. The growth indicated a steady economic momentum.

However, on a month-on-month basis, GST collection during the month in preview dipped as April 2025 recorded GST worth Rs 2.37 lakh crore, followed by Rs 2.01 lakh crore in May.

Reacting on the same, Saurabh Agarwal, Tax Partner, EY India, said, “The domestic GST collections for June 2025 present a nuanced picture. While the overall growth appears muted, likely influenced by the prevailing geopolitical uncertainties and their discernible impact on consumer sentiment, we must look beyond the headline numbers.”

The focus of the Goods and Services Tax (GST), which completes eighth year on Tuesday, will now be on promoting ease of doing business, ensuring stronger compliance and fostering broader economic inclusion, the finance ministry said.

The GST, which was implemented from July 1, 2017, has unified 17 taxes and 13 cesses, creating a seamless national market by simplifying compliance and digitising tax systems. It has also expanded the taxpayer base and strengthened cooperative federalism.

“As GST enters its ninth year, it continues to evolve, prioritising ease of doing business, stronger compliance, and broader economic inclusion, solidifying its role as a driver of India’s economic progress,” the finance ministry said while releasing ‘GST’s 8-Year Report Card’.

The ninth year of the Goods and Services Tax (GST), which begins on Tuesday, could actually see the much-awaited rationalisation of the rates, although the shrinking of slabs from four major ones to three is unlikely.

While the tax regime stabilised over eight years, this isidenced by consistent rise in collections - from a monthly average of a little over Rs 1.2 lakh crore to more than Rs 1.8 lakh crore and the number of taxpayers increasing to over Rs 1.5 crore by March-end.

Name any agency or tax expert and rationalisation of tax rates is top item on the wish list. "The next phase of GST must prioritise rationalising rates, reducing blocked credits in line with the neutrality principle, broadening the tax base, and removing procedural bottlenecks to restore the originally intended neutrality and efficiency of the system," consulting firm PwC said in a report released on Monday.

All eyes are on the next GST Council meting and the possibility of rate restructuring going forward. In an exclusive interview with FE, Finance Minister Nirmala Sitharaman has indicated that a simplified and easy-to-comply GST is in the works and the GST rates are set to be lower going forward.

Restructuring of GST rates
There has been significant discussion on the proposed rate/slab restructuring for the Goods and Services Tax. The big question is when will it to take effect? The Finance Minister is confident that, “the time has come for getting some consensus in the GST Council and coming up with a very simplified and easy-to-comply GST. We will be doing it.”

She added that, “There is a lot of work happening in this regard. After the budget, I have spent a lot of time going into every item, looking at the rates at which they are, looking at the inversion which has come in, the layered way in which taxes are levied and so on.”

Rate rationalisation under the goods and services tax (GST) remains the top priority for businesses, which are now seeking a simplified tax structure and fewer slabs with more items brought under lower tax brackets, found a recent survey.

Sectors such as healthcare and financial services are pushing for rate rationalisation to promote sectoral growth, according to the latest GST@8 survey by Deloitte.

The survey, involving 963 senior corporate executives, found that more businesses are now confident about the stability of the GST system and that they feel it is now easier for companies to manage interstate trade, with the e-way bill system reducing corruption at checkpoints.

About 85% companies expressed their confidence in the GST system, up from 59% in 2022, saying that the regime has reduced overall tax burdens on businesses, enabling them to invest in new projects and support sustainable growth.

India Inc had an overall positive experience with Goods and Services Tax (GST) over the past 8 years as the new tax regime has simplified compliance and supported business growth, but clarity in rules and better dispute resolution are still essential, a Deloitte survey said on Monday.

Deloitte India’s GST@8 survey also called for industry demand to strengthen the dispute resolution mechanism, rationalising rates across sectors, and ensuring audit uniformity between central and state tax authorities.

Based on 963 responses from senior corporate executives across eight industries, the survey said that industry wants liberalisation of export rules, rationalising GST rates for the entire supply chain and unlocking working capital measures.

The Deloitte survey said persistent impediments to the ease of doing business under GST include challenges in obtaining refunds, a limited understanding of new-age business models and expansive pro-revenue legal interpretations by authorities remain a challenge With regard to GST registration process, the survey suggested pan-India standardisation of registration documents, enabling simultaneous amendment and reduced registration timelines, were highlighted as key reforms to enhance the GST registration process.

A panel mandated to examine tax rates under the Goods and Services Council has recommended slashing tax on green hydrogen to 5% from 18% now, said people familiar with the matter.

The fitment committee has also backed reducing the goods and services tax (GST) on storage batteries and green hydrogen electrolysers, an important component for producing green hydrogen, to 5%.

The recommendations will be placed before the GST Council at its next meeting, which is likely to be held in July, for a final call on the tax rates.

Industry had been pushing for the rate cuts and had reached out to the government on the issue. It maintains that the tax reduction can make green hydrogen and energy storage solutions more affordable, promoting their adoption and contributing to India's clean energy goals.

Finance minister Nirmala Sitharaman on Friday asked the Central Board of Indirect Taxes and Customs (CBIC) to take more steps to simplify GST registration, for grievance redressal. She stressed the need for speedy closure of investigations in the Customs and GST cases, while ensuring prevention of tax evasion.

In its presentation, the CBIC said, “detected GST evasion grew to Rs 2,23,170 crore in 2024–25, with voluntary payments totalling Rs 28,909 crore.”

Sitharaman also asked the board to take further measures to prevent wrongful input tax credits (ITC) claims, promptly address public grievances received through the centralised public grievance redress and monitoring system (CPGRAMS) and reduce dwell time for imports, the finance ministry said in a statement.

The average time for grievance disposal has been reduced to just 9 days, significantly better than the stipulated 21-day timeline, the CBIC noted. An impressive 95% to 97% of CPGRAMS appeals are being disposed of within 30 days. This performance has placed CBIC among the top 5 out of 90 Central Ministries in CPGRAMS rankings since February 2024.

With the compensation cess set to expire by March 1, 2026, the Centre is likely to propose two new levies — a Health Cess on tobacco and other harmful substances and a Clean Energy Cess on coal and automobiles, as part of the discussions at the upcoming GST Council meeting in July.

The move aims to fill the revenue gap that will open up once the transitional compensation cess is phased out. While these cesses are still under consideration, experts say they may introduce fresh complexity into the GST regime, especially for businesses and the broader Centre-State revenue-sharing equation.

POSSIBLE IMPACT
“GST was a landmark tax reform which then sought to replace a complex web of fragmented state taxation systems that were in existence before 2017,” said chartered accountant Siddharth Surana.

“Prior to 2017, states and union territories implemented and administered their own system of Value Added Tax, and the revenues from these taxes fell directly within their purview with no major need for fiscal co-operation and Centre-State harmony,” he added.

Question 1: How can a recipient avail ITC of wrongly rejected Invoices/ Debit notes/ECO-Documents in IMS as corresponding GSTR-3B of same tax period was also filed by recipient?

Answer: In such cases recipient can request to the corresponding supplier to report the same record (without any change) in same return period’s GSTR-1A or respective amendment table of subsequent GSTR-1/IFF. Thus, recipient can avail the ITC basis on amended record by accepting such record on IMS and recomputing GSTR-2B on IMS. Here the recipient will get ITC of complete amended value as original record was rejected by the recipient.

However, recipient will be able to take ITC for the again furnished document by the supplier, as stated above, only in the GSTR-2B of the concerned tax-period.

Question 2: If any original record is rejected by the recipient and supplier furnishes the same record in GSTR-1A of same tax period or in the amendment table of GSTR-1/IFF of subsequent period, till the specified time limit, then what impact it will have on supplier’s liability?

Answer: In case supplier had furnished an original record in GSTR-1/IFF but the same record was rejected wrongly by the recipient in IMS. In such cases supplier on noticing the same in the supplier’s view of IMS dashboard or on request of recipient, may furnish the same record again (without any change) in GSTR-1A of same tax period or in the amendment table of GSTR-1/IFF in any subsequent period, till the specified time limit, then the liability of supplier will not increase. As amendment table take delta value only. Thus, in present case of same values, differential liability increase will be zero.

The finance ministry is likely to hold a two-day brainstorming conclave of top field officials of the revenue department starting Thursday. The objective of the conclave is to align grassroots tax administration with the Centre’s evolving policy focus on faster resolution, ease of doing business, robust revenue mobilisation and other similar issues involved in it, a source privy to development said on Wednesday.

The source, however, said that the conclave is likely discuss a detailed action plan covering key aspects of goods and services tax or GST and customs under the indirect tax regime among other issues. "The finance ministry will direct field officials to have a fortnightly reviews of investigation status by commissioners, validate reasons to be recorded for delays beyond a year. "The Union finance minister Nirmala Sitharaman is likely to interact directly with senior field officers and zonal chiefs on June 20. Zonal chief commissioners are expected to monitor and ensure resolution within a maximum of 9 months from such a point," the source said.

As per the Finance Act,2023 (8 of 2023), dt. 31-03-2023, implemented w.e.f 01-10-2023 vide Notification No. 28/2023 – Central Tax dated 31th July, 2023, the taxpayers shall not be allowed file their GST returns after the expiry of a period of three years from the due date of furnishing the said return under Section 37 ( Outward Supply), Section 39 (payment of liability), Section 44 ( Annual Return) and Section 52 (Tax Collected at Source). These Sections cover GSTR-1, GSR-1A, GSTR 3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR 7, GSTR 8 and GSTR 9 or 9C.

Hence, above mentioned returns will be barred for filing after expiry of three years. The said restriction will be implemented on the GST portal from July 2025 Tax period. Which means any return for which due date was three years back or more and hasn’t been filed till July Tax period will be barred from Filling. In this regard an advisory was already issued by GSTN on October 29th, 2024

1. Objective
The new E-Way Bill 2.0 portal has been developed in response to taxpayers’ demands for continuity in services during exigencies. It enables cross-portal access to critical E-Way Bill functionalities, ensuring seamless operations for taxpayers and transporters.

2. New Inter-Operable Services

The following additional services will be available on the E-Way Bill 2.0 portal for E-Way Bills generated on either portal (E-Way Bill 1.0 or E-Way Bill 2.0):

a) Generation of E-Way Bill based on Part-A details entered by the supplier
b) Generation of Consolidated E-Way Bills
c) Extension of validity of E-Way Bills
d) Update of transporter details
e) Retrieval of consolidated E-Way Bills
These services are in addition to the currently available cross-functional services:

a) Generation of E-Way Bills
b) Updating of vehicle details
c) Printing of E-Way Bills
3. System Integration and Synchronisation

a) Both portals will operate on a real-time synchronised architecture wherein E-Way Bill data will be mirrored across both systems within seconds

The proposed revision of the Goods and Services Tax (GST) slabs structure may not raise the weighted average levy, but is likely to keep the tax incidence on “demerit and luxury goods” at roughly the currently levels.

While the compensation cess applied on these goods is likely to be dispensed with, effective FY27, other imposts like health or clean energy cess may be applied on them, sources said.

A proposal under consideration among official circles is to raise the tax rate on these items, which range from tobacco products and aerated drinks to cars, from 26% at present, subject to a 40% rate cap mandated under the GST Act.

Currently, the tax incidence on these items due to the combined effect of the 28% slab rate, and the compensation cess, ranges between 29-50%. The need for a hike the GST rate on the demerit and luxury goods arises, as the removal of the compensation cess will otherwise reduce the tax incidence on them.