THOUGHTS ON ECONOMY AND GST COUNCIL

Indian Finance Minister has recently stated priorities such as strategic resources security, private investment, global openness and skill development as four key pillars or priorities for India to deal with next decade of economic shocks and build resilience amid 'uncertainty' now being a standing condition. Policies ought to be drawn around this. The evidence of resilience lies largely in the counter factual, in the outcomes that did not materialize. An inflation spiral that did not take hold, queues that did not form at fuel outlets, banking stress that did not surface, and a fiscal correction that was never forced.

On the other hand, RBI Governor has cautioned to preserve fundamentals of financial eco-system as global financial risks are emerging. There is a need for continued vigilance even when India's financial system remains resilient backed by healthy balance sheets of banks and institutions. Strong macroeconomic fundamentals and financial system provides stability to withstand economic shocks. India's resilience is not accidental but an outcome of broad and mutually reinforcing reforms. India does not want to grow rapidly but it wants to grow sustainably and resiliently over a long term. RBI has also revised its GDP growth projection for FY 2027 to 7.1% from 6.7%.

The 57th GST Council meeting was held on 8th October, 2026 at New Delhi with a focus on process reforms. GST Council in a day-long meeting recommended changes in adjudication, registrations, return filing, input tax credit (ITC) on inverted duty structure, refunds and litigation. These changes are aimed at improving compliances and reducing burden on taxpayers leading to ease of doing business.

The GST Council, in its 57th meeting, recommended a series of reforms to simplify GST compliance, streamline registration and return filing, expedite refunds, and improve the flow of Input Tax Credit (ITC). Key recommendations include the removal of arrest provisions under GST, raising the prosecution threshold from Rs.1 crore to Rs.5 crore, reducing the maximum general penalty from Rs.25,000 to Rs.10,000 simplifying GST registration for small e-commerce sellers, and facilitating the movement of goods across States. The Council also recommended various clarifications and changes relating to GST rates on goods and services, exports, and relief measures for small taxpayers. These recommendations aim to promote ease of doing business, enhance transparency, and reduce the compliance burden on taxpayers. The recommendations will be implemented through the relevant notifications, circulars, and legislative amendments.

In the 57th meeting, GST Council made recommendations relating to process reforms primarily covering registration, returns, refund and adjudication; clarifications regarding applicability of GST on supply of certain goods and services; and other measures for trade facilitation and streamlining compliances in GST. FAQs have been issued for clarification of doubts.

FM has expressed that the proposals before the GST Council were developed through sustained work with the states and that taxpayer experience must continue to guide implementation. Council' decisions address issues such as registration, returns, refunds, litigation & disputes, improved follow of input tax credit and reduction in time and cost of compliances.

E-way Bill generation for the month of September 2020 has seen a record high of 141.53 million growing by 7.21% on YoY basis. This is the highest number so far, last highest being 140.6 million in March, 2026. Crossing the 140 million mark for the first time reflects both, the resilience of domestic trade and the increasing formalization of the business / economy under GST. It also indicates strong and healthy freight movement signaling to business growth.

It is learnt that few adjudication orders have been issued in show cause notices issued to online gaming companies in which no personal penalties have been imposed on the company directors, besides reducing the demand of tax. Taxpayers look forward to more such orders.

Central Government has notified the National Tribunals Commission and Qualification, Selection, and Conditions of Service of Chairperson and Members of Tribunals Rules, 2026. w.e.f. 30.09.2026. GSTN has issued an advisory on GSTR 9 annual returns and GSTR 9C reconciliation statement, the last date for which is 31.12.2026.

With the onset of festive season, it is expected that business activities will rise leading to higher GST collection in next 2-3 months.

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