Ease of doing business and GST Law.

The GST law in India has crossed the first nine years successfully as law is now almost settled. But this is not as simple as it had to be as the maximum litigation in India under any tax law is only under GST law. This is due to the complex structure and the non-exposure of excise and service tax law to state government officials etc. Be that as it may, as we are already in the 10th year, I suggest the following five issues for resolving and even if one out of five is implemented with effect from 01/04/2027, the entire business community gets some sort of relief, even though not to desired extent.

The laudable efforts taken by GST council during September 2025 in rate rationalization as well as in the setting up of GSTAT benches have really helped the nation in a big way. The Government has not lost any revenue as seen from the GST collections on a monthly basis till June 2026. Accordingly, the following five suggestions are made for the kind consideration of the GST Council which has not even had their first meeting during the current financial year 2026-27.

1. Kindly delete section 17(5)(d) with effect from 01/04/2017. This particular clause in sub-section 5 of section 17 has already done huge harm to the entire nation as no developer of any building would like to incur loss and shall load suitably the price. This artificially increases the cost of even affordable and small residential units. This has done less gains and more pains to even the Government as the tax officials all over India invariably disallow ITC on all construction related materials in total, even though the denial of ITC is only when the expenses are capitalized in the books of accounts. This being so, all small taxpayers pay the illegitimate tax with no option whereas organized taxpayers litigate and win. In case the Government has complete data, it may reveal that the denial of ITC on account of 17(5)(d) is highly insignificant when compared with the cost of operating this clause. Though ideally section 17 (5) itself may be deleted in total as there is absolutely no rationale under any of the clauses, to start with clause d is the best.
2. Considering the fact that the limits at 20 lakhs and 40 lakhs were set during initial period of GST, the limits under GST must be at least 30 lakhs for services and 60 lakhs for goods, if not more with effect from 01/04/2027. This saves the GST officials from doing the futile exercise of raising bogus demand which is subsequently dropped upon proper explanations. In case the number of taxpayers is brought down by 20% from the existing level, efficiency and collection shall improve by 25% by applying the law of inversion. Again, in case the Government does some data analysis on GST Collections from taxpayers who have less than 30 lakhs turnover under services and 60 lakhs turnover under business, the results may be shocking. To collect a small portion of GST (Say 2%) of gross GST collections, the taxpayer base may be very huge (say even 20%). In case this exercise is done, and implemented from 01/04/2027, GST Collections are set to increase at least by 25% as the time, efficiency and efforts of GST officials improves due to reduced focus on INFRCTUOUS activities.
3. The concept of concurrent jurisdictions on taxpayer may be done away with immediate effect to avoid the duplication of work by the GST officials. It is equally a huge burden for the taxpayer as the taxpayer has to do same work two times for none of his fault. While all the powers are available with both the tax authorities, in case taxpayer is with the jurisdiction of State, DGGI may refer the matter to State and in case state intelligence has some clue where the jurisdiction vest with center, Centre may be requested to investigate further. It saves time and efforts of both taxpayer as well as tax officials by avoiding duplication.
4. Huge training requirements are there specially for those officers whose orders are quashed by the higher forum. It is not a simple matter as when an order passed by a lower authority is quashed by the jurisdictional high court and the same order is available in public domain, all concerned across India observe the poor quality of the order passed by the tax officer. The beauty of this game is that for the errors which are even grave when committed by tax officer, the sufferer is only the taxpayer. There are several simple solutions to overcome this. Impose cost on GST Officer. Send them for training to avoid any further damages. Let senior officers at the level of Additional Commissioners for State and Commissioners for Centre scrutinize all such orders and take appropriate departmental actions on the erring officials.
5. Last, but not the least is the imposition of 200 % penalty on during transportation of goods wherein the supplier or receiver is forced to pay such huge penalty as they can -not afford to delay the transportation of high value goods. Despite CBIC Circulars, State officers levy huge penalty for minor procedural lapses such as small correction in street name, e way bill expired by hardly one hour due to break down of vehicle etc. The game mostly ends in almost 95% cases by refunding the major portion of the penalty by way of reduction of penalty. This is a situation which helps tax professionals only due to increased number of avoidable litigation.

Let us hope that the GST Council meets at least in September 2026 as the last meeting was also held during September 2025 and resolves the above issue with the sole objective of ease of doing business in India.