GST Council October 7 meet to focus on process reforms; MDR issue may also come up

The GST Council’s October 7 meeting in New Delhi will focus entirely on process reforms, with the government looking to further simplify compliance under GST 2.0 before moving towards GST 3.0, government sources told Business Today.

The Council is expected to examine issues related to invoice filing and matching, input tax credit (ITC), mismatches between buyer and seller returns, and disputes over the eligibility of ITC. Compliance costs and litigation are also expected to form part of the broader process reform agenda.

Rate-related matters are not currently part of the agenda for the meeting, the sources said.

The government is looking to streamline processes under the GST framework before moving towards the next phase of reforms, they added.

The rate rationalisation exercise undertaken last September was aimed, among other things, at reducing litigation. With the GST structure now consolidated into two main tax slabs, the scope for disputes over the classification of goods and services has also been reduced, the sources said.

However, the GST Council may also review the 18% GST levied on Merchant Discount Rate (MDR), although the issue is not part of the agenda at present. The possible review comes amid concerns over the impact of MDR on merchants and the overall cost of UPI transactions.

A favourable decision on the MDR-related GST could be possible if the Council decides to take up the issue, the sources said.

For now, the October 7 meeting is expected to remain focused on simplifying GST processes and reducing compliance-related friction for businesses.