GST Overhaul Planned for Faster Refunds and Easier Compliance

GST Overhaul Planned for Faster Refunds and Easier Compliance

The government is preparing a comprehensive overhaul of Goods and Services Tax (GST) processes, led by the Central Board of Indirect Taxes and Customs (CBIC). The reforms aim to improve transparency, ease compliance, and ensure quicker fund releases for businesses, particularly MSMEs.

Key Procedural Reforms Underway

• Automated Return Filing: The system is being redesigned to enable auto-population of key returns using synchronized data from multiple sources, including e-invoices, e-way bills, TDS/TCS filings, and import declarations on ICEGATE. The goal is to introduce pre-filled returns and reduce manual intervention.
• Digital Scrutiny Mechanism: A new system is being developed for digital scrutiny of GST returns using Forms ASMT-10 and ASMT-11 online. Scrutiny will be analytics-based, comparing data across GSTR-1, GSTR-3B, GSTR-2B, and e-invoice records to detect discrepancies automatically.
• Automated Refunds: An initiative is underway to automate refunds for excess balances in the Electronic Cash Ledger, which currently requires a manual application under Section 54. The proposed mechanism will be algorithm-based to process eligible balances within defined timelines, improving liquidity for MSMEs and digital sellers.
• Digitised Audits: The next phase will focus on digitizing GST audit processes once the return, scrutiny, and refund systems are stabilized, which will further reduce physical interface and bring consistency to audit procedures.

This move addresses long-standing demands from the industry to enhance transparency and reduce the burden of physical follow-ups with tax officers.