GST Council proposes late fee waivers and automated refunds

The 57th GST Council Meeting has proposed several reforms aimed at improving taxpayer ease and streamlining the Goods and Services Tax framework. A key recommendation includes a late fee waiver for small taxpayers with an annual turnover of up to ₹5 crore. Under this proposal, if a delayed GSTR-3B return is filed by the end of the same month in which it was due, the late fee will be waived, though interest on delayed tax remains applicable.

To improve liquidity and working capital, the Council recommended transitioning toward automated refund processing. This includes reducing the acknowledgement timeline from 15 to 10 days and implementing system-based provisional refunds of 90% for eligible claims. Other proposed changes involve simplifying Form GST RFD-01, rationalizing blocked credits, and clarifying rules regarding zero-rated supplies and exports.

Additionally, the Council suggested a mechanism allowing taxpayers to object to the blocking of their electronic credit ledger balances, ensuring they receive an opportunity for a hearing. These recommendations are subject to subsequent legislative amendments and notifications.