GST Council to Consider Six Major Reforms as India Enters a New Phase of Tax Simplification
India’s Goods and Services Tax (GST) framework is heading toward another important stage of reform, with the 57th GST Council meeting scheduled for September 12 in New Delhi. The meeting is expected to focus less on broad rate restructuring and more on improving tax certainty, reducing disputes and making compliance easier for businesses.
The upcoming discussions come as GST approaches its tenth year. The proposed reform agenda could address several long-running issues that affect companies, taxpayers and the wider digital economy.
Six Areas Could Shape GST’s Next Phase
One of the emerging themes is a move toward making the existing GST system more predictable rather than simply changing tax rates.
1. Reducing GST Litigation
A major concern is the growing volume of tax disputes.
The online gaming sector is facing particularly large retrospective tax demands following the Supreme Court’s decision in the Gameskraft matter. Industry estimates cited in recent reports put the potential demands at nearly ₹2.5 lakh crore.
The GST Council could examine mechanisms that provide greater certainty where businesses followed an interpretation that was widely accepted at the time.
2. Protecting Genuine Input Tax Credit
Input Tax Credit (ITC) is another major issue likely to receive attention.
Under the existing system, businesses can face difficulties when a supplier fails to meet tax-payment or compliance requirements, even when the purchasing company has maintained proper records.
Industry representatives have suggested a legislative safe-harbour mechanism for genuine buyers who possess valid invoices, have actually received the goods or services, made payments through recognised banking channels and were not involved in collusion.
Such a mechanism could reduce uncertainty for compliant businesses.
3. Resolving Older Tax Credits
Another possible area of discussion is the treatment of tax credits accumulated under previous arrangements.
The transition away from compensation cess has left businesses seeking clarity regarding certain credit balances and their future utilisation.
A clear framework could help companies manage their books more efficiently and reduce disputes arising from legacy tax positions.
4. Reconsidering Petroleum Products Under GST
Petroleum products remain outside the main GST framework.
Petrol, diesel, aviation turbine fuel and natural gas continue to be taxed through separate systems, resulting in different tax structures across states.
Bringing some petroleum products under GST has been discussed for years, although the issue is complicated because state governments depend heavily on fuel taxation for revenue.
A future decision would therefore require substantial coordination between the Centre and the states.
5. Updating Rules for the Digital Economy
Rapid growth in app-based services has created new questions for GST administration.
Platforms offering passenger transportation and other digital services operate differently from traditional businesses. As these models evolve, tax authorities need rules that clearly determine when the platform itself is responsible for tax collection and when responsibility rests with the underlying service provider.
A clearer framework could reduce compliance uncertainty for technology companies and platform-based businesses.
6. Making ITC and Refund Procedures Easier
The September 12 meeting is also expected to consider changes to blocked input tax credits and GST refund procedures.
Officials may examine whether restrictions under Section 17(5) of the CGST Act can be eased for certain business expenses. The provision currently restricts ITC on categories including specified motor vehicles, food and beverages, some services and construction-related expenditure, subject to statutory exceptions.
The Council may also discuss refunds involving accumulated ITC under the inverted-duty structure and mechanisms for transferring unused credits between states.
GST Registration Could Become Simpler
GST registration procedures for larger businesses may also receive attention.
Current processes can vary between central and state tax authorities, particularly for businesses that pass on more than ₹2.5 lakh of tax credit per month.
The Council is expected to consider greater standardisation, along with automation in GST registration cancellation procedures.
India currently has around 1.68 crore GST-registered businesses, making efficient administration increasingly important.
A Different Kind of GST 2.0
India’s first major GST 2.0 overhaul was implemented in September 2025, when the tax structure was simplified primarily around 5% and 18% rates, alongside a 40% special rate for selected luxury and sin goods.
The next phase appears different in character.
Instead of another sweeping rate overhaul, the emphasis is increasingly on making the tax system easier to understand, reducing litigation and ensuring that genuine taxpayers receive predictable treatment.
Why the Reforms Matter
A more predictable GST system could have a direct effect on businesses’ working capital and compliance costs.
Faster refunds can release funds that are otherwise locked into tax credits. Clearer ITC rules can reduce disputes. Simplified registration can lower administrative burdens for growing companies.
For consumers, these improvements could indirectly reduce costs if businesses are able to operate with fewer tax-related delays and uncertainties.
A Test for India’s Tax Reform Journey
The GST Council’s September meeting will therefore be closely watched by businesses, tax professionals and state governments.
The next stage of India’s GST journey is increasingly about trust, clarity and efficiency rather than simply changing tax rates.
If the proposed reforms move forward, they could strengthen the foundation of India’s indirect-tax system and make compliance more predictable for millions of businesses.
The final decisions, however, will depend on discussions between the Centre and state governments at the GST Council meeting.
