A key area is the treatment of input tax credit (ITC).
CA Mandar Telang, Vice President, Bombay Chartered Accountants Society (BCAS), an independent, voluntary professional organisation for Chartered Accountants in India, said ITC should not be denied for bona fide clerical or procedural errors where the underlying transaction is genuine, tax has been paid and there is no revenue loss.
He also called for a practical rectification mechanism with safeguards against misuse.
Telang also suggested examining a more centralised registration framework for businesses operating across multiple states and allowing transfer or cross-utilisation of unutilised ITC between registrations of the same legal entity. He said such measures could reduce litigation and working-capital pressures.
Jitendra Motwani, Partner – Tax Practice, Trilegal, a full-service corporate law firm in India, said businesses would be keenly watching proposals around decriminalisation, ITC disputes and compliance simplification. He said keeping routine ITC and classification disputes outside the criminal framework, along with judicial oversight of arrests, could provide greater certainty to taxpayers.
Motwani also pointed to proposals concerning ITC on employee group insurance and outdoor catering, as well as provisions that could allow genuine recipients to retain credit where a supplier defaults. However, he said the extent of relief would ultimately depend on the implementation of the decisions through subsequent circulars and field-level action.
Abhishek Rastogi, Founder, Rastogi Chambers, an Indian law practice firm, said proposals reportedly under consideration include changes to Section 17(5), which governs blocked credits, along with reforms to inverted-duty refunds, GST registration and cancellation procedures, e-way bill compliance and enforcement powers.
Rastogi said any changes to Section 17(5) would need to be examined closely, including whether they are prospective or retrospective and whether they require legislative amendments or can be addressed through notifications or clarifications.
On GST arrest powers, Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, a professional service and business advisory firm, said revisiting the framework could help draw a clearer line between tax disputes and criminal enforcement.
He said greater certainty during investigations could benefit businesses where the underlying issue is interpretational or involves a bona fide tax dispute. At the same time, he stressed that the enforcement framework should continue to provide a strong response to deliberate fraud, including fake invoicing and fraudulent ITC claims.
The GST Council meeting has been rescheduled twice and is now scheduled for October 8.