GST Council Plans Major Compliance Reforms, Experts Push for Electricity & Natural Gas Inclusion
Introduction
The upcoming GST Council meeting is set to focus on major compliance changes aimed at simplifying taxation, enhancing digital processes, and addressing key industry concerns, as reported by Hindu Businessline. These reforms form part of the government’s GST 2.0 initiative, which simplified tax slabs to 5% and 18% in September 2025.
The Key Measures proposed for the Reform are as follows:
- Electricity & Natural Gas: Industry specialists are advocating to include electricity and natural gas under GST to reduce cascading taxes and cut costs for manufacturers and service providers. Section 9 of the CGST Act allows GST on products like crude oil, diesel, motor spirit, natural gas, and aviation turbine fuel to be applied from a date specified by the government, but these sectors currently remain outside the GST framework. States including Maharashtra and Gujarat have reportedly supported the proposal, with the Oil Ministry providing impact data.
- E-Invoicing Expansion: The government, through the 54th GST Council Meeting, has initiated discussion extending the e-invoicing mandates to B2C transactions, as currently applicable only to B2B transactions for businesses with a turnover above 5 crore.. The pilot B2C e-invoicing system introduced at the GST Council Meeting will run voluntarily in select sectors and states will help streamline tax collection, prevent evasion, and encourage digital record-keeping.
- GST Arbitration Tribunal: A dedicated tribunal is proposed to resolve GST disputes quickly and consistently, following standardised tech-enabled procedures.
- Simplified Tax Structure: GST 2.0 retains only 5% and 18% slabs, replacing older rates, making compliance easier for businesses.
- Digital Transformation Push: Both GST reforms and parallel initiatives like RBI’s digital lending framework highlight the government’s focus on modernising India’s fiscal ecosystem.
Conclusion
These reforms, covering electricity, natural gas, e-invoicing, and dispute resolution, mark a significant step towards a more streamlined, digitally empowered GST regime. Coupled with parallel economic reforms like the RBI’s digital lending framework, India is moving towards a coordinated, modernized, and business-friendly fiscal ecosystem.
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