The next GST Council meeting is likely to further the progress made on “process reforms” – undertaken in the previous meeting – to ease compliance costs for businesses, relax registration processes, reduce litigation, and fix inverted duty structure issues, according to government sources.

“The key issue of simplifying the slab structure is done. Now, we have to focus on process reforms,” said a senior official. The next Council meeting is expected in late July or August.

In the previous meeting held in September 2025, the Council approved a simplified GST registration scheme for small and low-risk businesses, intended at providing benefit to 96 percent new registrants.

The Council also approved a simplified registration scheme for small suppliers supplying through electronic commerce operators. “In the next meeting, the framework of the scheme will be presented in detail to the Council, for approval,” another official told Moneycontrol.

“The next meeting will take up issues arising with regards to inverted duty structure (IDS) of different sectors,” said the first official. Industries such as pharmaceuticals, textiles, footwear, food processing, paper, and electric vehicles are witnessing significant credit build-ups as taxes paid on raw materials, services, logistics, technology, and capital investments frequently exceed the GST payable on their outputs.

An Inverted Duty Structure (IDS) occurs when the tax rate on inward supplies (inputs) is higher than the tax rate on outward supplies (final outputs). It means a business pays more GST when buying raw materials or services than it collects from customers when selling the finished product. And as a result, businesses are unable to claim the accumulated input tax credit – as the credit accumulated through output tax is lower than tax paid on inputs.

The last Council meeting approved a system-driven 90 percent provisional refund mechanism specifically for inverted duty structure claims. This was done to provide liquidity relief to affected industries, and eliminate the prolonged cash-crunch cycles that plagued domestic manufacturers.

Key focus areas for the next meeting

The upcoming GST Council meeting presents an important opportunity to further the process-reform agenda under GST, say experts. While digitization has significantly improved tax administration, businesses continue to face compliance complexities, procedural challenges, and frequent system-driven changes.

Section 11A of the CGST Act gives the central government, on the recommendation of the GST Council, the power to waive off past GST liabilities of the industry for a particular period if it is satisfied that the non-payment or under-payment of taxes was due to a “generally prevalent trade practice”. The clause was introduced through the Finance Act, 2024, following representations from the online gaming industry seeking relief from retrospective tax demands.

Source: Moneycontrol.com