GST Council begins 2.0 reforms with ITC overhaul, decriminalisation on agenda

The 57th GST Council meeting began Thursday with major GST 2.0 reforms on the agenda, focusing on input tax credit (ITC) overhaul, decriminalisation of offences, and easing compliance for businesses and MSMEs. Key proposals include protecting genuine buyers' ITC from supplier defaults, expanding credit eligibility to insurance, vehicles, and telecom assets, and releasing 90% of eligible refunds after automated checks. The council will also consider removing arrest provisions, raising the prosecution threshold from ₹1 crore to ₹5 crore, and faster three-day GST registration. Additional measures target MSME relief with quarterly payments and a ₹10,000 notice threshold, simplified export and e-commerce rules, and targeted rate tweaks such as cutting GST on retreaded tractor tyres to 5%. No broad rate changes are planned.