Quick Summary
The GST Council has recommended a series of changes to the Goods and Services Tax (GST) framework to improve the flow of Input Tax Credit (ITC), ease working capital pressure on businesses and simplify GST benefits for exporters. The proposed reforms cover refunds of accumulated ITC on capital goods and input services, removal of certain blocked credit restrictions, and changes to the rules governing exports of goods and services. The recommendations involve amendments to the CGST Act, 2017, th
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FAQ :
The GST Council has recommended reforms in Input Tax Credit (ITC) refunds, blocked credits, and export benefits.
The Council recommended amendments to allow refunds of accumulated ITC on capital goods for zero-rate supplies and on input services and capital goods for inverted duty structures, with specific timelines for ITC availed.
Restrictions are being removed for ITC on supplies like outdoor catering, health and life insurance, telecommunication towers, pipelines outside factory premises, free samples, and goods destroyed or written off due to expiry.
The condition that the supplier and recipient of services must not be establishments of a distinct person is being removed, which will help Indian service providers with foreign offices claim refunds.
A new explanation will deem supplies to an overseas buyer, with delivery in an SEZ/FTWZ and payment received in foreign exchange (or permitted INR), as eligible for zero-rating benefits.
The recommendations aim to ease working capital pressure on businesses, ensure a smoother flow of ITC, reduce cascading taxes, and promote the export of goods and services from India.
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