GST Council approves concept note for optional quarterly tax payment for small businesses

The GST Council has approved a concept note for an optional compliance scheme aimed at small businesses with an annual turnover of up to ₹5 crore that supply exclusively to consumers, Union Finance Minister Nirmala Sitharaman said on Thursday.

Under the proposed scheme, eligible businesses would be required to file only one annual return while making tax payments on a quarterly basis.

The detailed framework of the proposed scheme will be placed before the GST Council for consideration at its next meeting, Sitharaman said.

Quick answers to key questions

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QUESTIONS

The proposed scheme is for businesses with annual turnover of up to ₹5 crore that supply exclusively to consumers.

Eligible businesses would file one annual return and make GST payments quarterly.

No. The scheme has been proposed as an optional compliance scheme.

No. The GST Council approved a concept note, and the detailed framework is due to be considered at its next meeting.

The proposal is part of measures aimed at simplifying GST administration and reducing compliance burdens for small businesses.

In a post on X, Sitharaman said: “Today, we have distributed a concept note on an optional scheme for businesses with a turnover of up to ₹5 crore, supplying only to consumers. So, this will entail filing only one annual return with quarterly tax payments. The detailed framework will come for a decision before the next Council meeting.”

57th GST Council meeting: Major GST process changes approved

The decisions were taken at the 57th GST Council meeting, where the Centre and states approved a series of changes aimed at simplifying GST administration and reducing compliance burdens.

Among the key decisions, the Council approved measures to remove GST officers' power to arrest taxpayers in cases covered by the reform, raise the threshold for criminal prosecution to ₹5 crore and speed up the processing of most GST refunds.

The Council also approved measures to simplify GST registration for small suppliers seeking to sell through e-commerce platforms. The reforms include an easier procedure for making amendments to GST registration details and a reduction in penalties.

GST refund process to become faster

The Council has approved changes aimed at reducing the time taken to process GST refund applications.

Under the revised process, the acknowledgement period will be reduced from 15 days to 10 days, Sitharaman said.

If neither an acknowledgement nor a deficiency memo is issued within 10 days, the refund claim will be treated as acknowledged.

"Based on risk assessment, it is expected that the system will sanction 90 per cent of all the claims within 3 working days of acknowledgement," Sitharaman added.

The government expects the new framework to enable faster refunds, with most eligible claims targeted for processing within three days under the broader reform package.

Committee to examine protection for genuine buyers

The GST Council has also decided to set up a Committee of Officers to examine the transition towards invoice matching for input tax credit claims.

The committee, which is expected to submit its report within three months, will examine how genuine buyers can be protected when they possess a valid invoice, have received the goods and have made full payment to their suppliers.

The move is aimed at addressing concerns faced by businesses that have complied with their obligations but could potentially face difficulties because of issues on the supplier's side.

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