Efforts to Ease GST Compliance: Less Than 2% Receive Notices, Says FM

Finance Minister Nirmala Sitharaman, in a recent announcement, highlighted the government's efforts to streamline compliance and ease the burden on taxpayers under the Central GST administration. With a focus on making the Goods and Services Tax (GST) framework less cumbersome for assessees, Sitharaman revealed that a minimal percentage of taxpayers have been issued notices, underscoring the government's approach towards fostering a more taxpayer-friendly environment.

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During a press briefing following the 53rd GST Council meeting, Sitharaman shared that as of December 31, 2023, only 1.96% of active tax assessees have received notices from the Central GST (CGST) authorities. This translates to approximately 1.14 lakh out of the total 58.62 lakh assessees, indicating a selective and restrained approach in the issuance of tax notices.

The GST Council's latest meeting saw the introduction of several measures aimed at alleviating the financial and compliance-related pressures on taxpayers. Notably, the Council has decided to waive interest and penalties on demand notices for the fiscal years 2017-18, 2018-19, and 2019-20, provided the full tax demand is settled by March 31, 2025. This move is expected to provide significant relief to taxpayers facing outstanding demands from previous years.

Additionally, in a bid to reduce the financial burden associated with appeals under GST, the Council has recommended lowering the quantum of pre-deposit required for filing appeals. This adjustment is anticipated to make the appeal process more accessible and less daunting for taxpayers seeking redressal of their grievances.

Another significant recommendation by the GST Council pertains to the interest calculation on delayed returns. To ease the interest burden, it has been suggested that no interest should be levied if delayed filing of return is due to amounts available in the Electronic Cash Ledger (ECL) on the due date of filing. This measure aims to provide a cushion for taxpayers who may face delays in return filing due to unforeseen circumstances.

In an effort to support Special Economic Zones (SEZs), the Council has also recommended an exemption from compensation cess on imports by SEZ units/developers for authorized operations starting from July 1, 2017. This exemption is expected to encourage trade and development activities within SEZs by reducing the cost of imports for these entities.

These initiatives underscored by Finance Minister Nirmala Sitharaman reflect the government's commitment to simplifying GST compliance and reducing the tax burden on businesses and individuals alike. By introducing taxpayer-friendly measures and ensuring a restrained approach in issuing notices, the government aims to foster a conducive environment for economic growth and development.

The GST Council's decisions mark a significant step towards addressing key concerns of taxpayers and are likely to be welcomed by businesses and individuals navigating the complexities of GST compliance. As these measures are implemented, they promise to bring about a more streamlined and less stressful tax administration process for all stakeholders involved.