GST Council May Scrap Notices Under Rs 10,000

The GST Council may introduce significant compliance reforms as part of the 'GST 2.0' operational updates. The proposed changes aim to minimize friction between taxpayers and tax authorities, and enhance predictability for goods in transit.

One key proposal allows small e-commerce sellers to designate the platform's warehouse as their official registered place of business in states where they lack physical premises. To secure GST registrations in additional states, sellers would undergo physical verification and Aadhaar authentication in their primary home state, with the e-commerce platform's consent.

The GST Council may also prohibit the issuance of GST demand notices for amounts under Rs 10,000. Low-value disputes under this threshold represent nearly 20% of total litigation volume but account for an insignificant share of revenue. For demands exceeding Rs 10,000, officers would be required to issue an initial intimation, allowing taxpayers an opportunity to respond prior to issuing formal notices.

Standardized guidelines are proposed for issuing and resolving tax demands, including clear instructions for drafting and serving notices and delivering reasoned decisions. The GST registration framework is being revamped to ensure applications are submitted accurately on the first attempt, with a redesigned interface and customized document checklist.

## Why it matters The proposed reforms aim to reduce litigation volumes and administrative burdens, and provide relief to genuine buyers and e-commerce sellers. By streamlining registration and return filing processes, the GST Council hopes to enhance predictability for goods in transit and minimize friction between taxpayers and tax authorities. The changes could have a significant impact on small e-commerce sellers and genuine buyers, who often face difficulties in navigating the complex GST system.

## What happens next The GST Council will consider the proposed reforms as part of the 'GST 2.0' operational updates. If approved, the changes could be implemented in the near future, providing relief to e-commerce sellers and genuine buyers, and streamlining the GST system. The Council may also consider additional reforms to further simplify the GST system and reduce compliance burdens on taxpayers.