NEW DELHI: With the second-generation reforms set to be completed on Wednesday with the rollout of process reforms, the Goods and Services Tax (GST) appears to be moving towards a more institutionalised and predictable regime, much like the direct taxes system, with frequent tinkering of rates giving way to a more structured annual process, sources said.
The first phase of the reforms began with the rate rejig and slab recast in September last year. The Centre and states then spent nearly nine months stitching together the proposed process reforms to make GST 2.0 a more wholesome experience, with lower tax rates and easier compliance.
The process reforms will make the system largely automated, covering everything from registration and filing of returns to making corrections, claiming refunds and responding to demands, with minimal intervention by tax officers.
“Going forward, rate changes, if required, are likely to be considered only once a year and take effect from April 1, providing businesses greater certainty and bringing an end to the practice of revisiting GST rates at every Council meeting,” a senior official said.
The move does not mean the GST Council itself will meet less frequently. “GST Council meetings will continue to happen every quarter, but in every meeting, we don’t want to deal with rates,” the official said.
With the tax rate and slab rejig having stabilised over the past 12 months, and process reforms set to be unveiled on Wednesday, the next-generation GST is expected to provide greater stability over the next five years or more, sources said.
That, however, does not mean the GST framework will be frozen for the next five years or so. The Council will remain open to taking up larger issues that may emerge from time to time, including changes to the tax base if the Centre and states reach a consensus, sources said.
The 56th meeting of the GST Council, held on September 3-4, 2025, in New Delhi, replaced the multi-rate, complex structure of GST with a relatively simpler two-rate structure of 5% and 18%, along with an additional special rate of 40% for demerit and sin goods.
After the GST regime was rolled out in July 2017, the Council met six times in the remainder of that year, followed by seven meetings each in 2018 and 2019 to make large-scale rate adjustments and address other teething issues. Such frequent interventions were part of the process of settling a new tax regime at the national scale. Thereafter, the Council met four times each in 2020 and 2021, twice in 2022, four times in 2023 and three times in 2024.
Source: The Financial Express
