GST reforms will sustain growth momentum, help face global headwinds

To grow faster at such a time makes it essential for India to keep reforming.

3 min readOct 9, 2026 06:00 AM IST First published on: Oct 9, 2026 at 06:00 AM IST

On Thursday, the 57th GST Council Meeting concluded with Union Finance Minister Nirmala Sitharaman announcing a host of reforms aimed at improving compliance in the Goods and Services Tax (GST) regime. The Council, the apex decision-making body on GST with representation from both the Union and state governments, has followed up on its 56th meeting in September last year when it rationalised the GST tax slabs by moving to a cleaner and easier-to-follow two-slab structure of 5 per cent and 18 per cent along with a special de-merit rate of 40 per cent for sin and luxury goods. The process reforms announced now are the second part of what Minister Sitharaman has called the Next-Gen GST, that will help taxpayers as well as businesses.

The latest changes attempt to address the several concerns that taxpayers have raised, ranging from difficulties in registration, delay in refunds, and harassment during disputes. For instance, the registration process has been simplified with the Council recommending automatic acceptance of routine changes, like a firm wanting to add a new office. Tax refunds will also be quicker. The acknowledgment period will come down from 15 days to 10 days and 90 per cent of all refunds will be sanctioned within three days of acknowledgement. Delay in refunds has been a long-standing grievance of many firms, especially smaller ones, because it can rob them of working capital at a critical time. Similarly, the ambit of claiming input tax credit has been expanded to include expenses such as health and life insurance for employees. Several changes have been made to reduce harassment of businesses — for instance, to ensure smoother movement of goods, inspections and seizures of goods can only be done by officers of the supply state or destination state. Significantly, the Council has removed the power to arrest of GST officers. It has raised the prosecution threshold for offences from Rs 1 crore to Rs 5 crore while reducing the general penalty from Rs 25,000 to Rs 10,000. No notices will be sent for disputes below the Rs 10,000 threshold, and all existing ones will be withdrawn. There’s also targeted relief for small businesses; they will now be able to scale up across the country without first establishing a place of business in each concerned state.

These changes are not only welcome but also necessary to fulfil the promise of a single unified market. Lower tax slabs have already had a salutary impact on consumer demand. To sustain the momentum, process reforms such as these are critical. Economic upheavals around the globe are producing headwinds for India’s growth prospects. To grow faster at such a time makes it essential for India to keep reforming.