GST’s early years prioritised compliance checks to protect revenues and compensate states. This revenue-first approach, however, often made procedures complex for businesses
With compensation cess repayment completed in FY26, the GST Council gained room to rationalise rates. Slab reductions have since supported consumption and simplified taxation
Lower penalties, higher prosecution thresholds and simpler registration and refund rules signal a shift towards facilitating honest taxpayers, not treating all as potential evaders
Wider input tax credit availability can reduce tax costs and improve efficiency. Proposed filing and credit reforms could further ease the compliance burden on businesses
Petrol, diesel, electricity and natural gas remain outside GST. Their exclusion limits seamless input credits and leaves a key gap in the ambition of a unified indirect tax system
A predictable road map to bring excluded items under GST can improve competitiveness across value chains
With fewer rate reviews, the Council can devote more attention to structural reform