GST Reforms and Announcements

The prime minister announced next-generation reforms in the Goods and Services Tax (GST) aimed at benefiting both small and large businesses. This reform is expected to rationalize and reduce tax rates, especially on daily-use goods and services.

Suggestions for GST Regime Reforms

• Remove restrictions on Input Tax Credit (ITC): 
  • ITC should be available regardless of whether the recipient has paid the supplier.
  • No time limit should be set for availing ITC.
  • Allow ITC for motor vehicles and construction of immovable properties used for business.
• Refund of GST on exports should not be denied for non-realization of export proceeds.
• Immediate electronic refund of unutilized ITC should be provided upon application.
• Integrated GST paid via the Customs portal should auto-update in the GST electronic credit ledger.

Recommendations from Experts

• Establish an independent body for advance rulings.
• Prioritize major litigation issues and get GST tribunals operational swiftly.
• Utilize artificial intelligence in tribunals to expedite similar pending litigations.
• Avoid frivolous litigation and show-cause notices.
• Central and state GST breakdowns should be backend processes.

International Trade Stance

The PM emphasized India's self-sufficiency and did not directly address the higher tariffs imposed by the US on Indian goods. However, the PM assured that the interests of farmers, livestock keepers, fishermen, and small businesses will be safeguarded against unreasonable demands, indicating a firm stance in international trade.