The GST Council decided to enhance the indirect tax framework by providing businesses with relief from arrest, prosecution, and penalties, improving access to tax credits, expediting refunds, and implementing various procedural relaxations, such as simplified registration and cancellation under the GST system.These actions, which enhance the tax rate and slab adjustments implemented a year earlier, modify the structure of GST to create a more taxpayer-friendly and trust-oriented framework. The reform of processes aims to simplify daily compliance for companies.The council, led by Finance Minister Nirmala Sitharaman, sanctioned amendments to regulations regarding registration, tax returns, refunds, input tax credit (ITC), dispute resolution, enforcement, exports, and transportation of goods between states.The reforms aim to create a more system-oriented GST administration and lessen taxpayers’ interactions with tax officials.The move follows a year after the council adopted a two-rate GST system. Authorities stated that the decrease in rates has coincided with a broadening of the tax base.Taxable supply increased by over 25 per cent in FY26, compared to 13 per cent in FY 2024-25, according to an official announcement.GST revenue has increased by 11 per cent in this fiscal year, with a revenue growth of 14.7 per cent year-on-year during the June-August period. Simultaneously, the effective tax rate on local supplies has decreased to 13.13 per cent from 14.55 per cent.Sitharaman informed journalists during a briefing, “If the rates were settled last September, then the reforms of the process must also be concluded as soon as possible.”A statement from the finance ministry indicated that companies handle registration, returns, and refunds significantly more often than they manage alterations in tax rates.The GST framework can now align seller and buyer invoices and employ network analysis to pinpoint dubious credit, enabling enforcement to depend more on detection rather than deterrence.Quicker reimbursements, broader ITCRefund reform is one of the major alterations revealed by the council. It suggested permitting the refund of accrued ITC on input services and capital goods within the inverted duty structure. An inverted duty structure occurs when GST on inputs exceeds the tax applied to the final product, leading to the accumulation of unutilised ITC.The refund for accumulated input tax credit on input services in an inverted duty structure will be accessible starting November 1, 2026. Refund of ITC for plant and machinery will be accessible to exporters and businesses from April 1, 2027, onwards. The reimbursement for equipment and machinery will be distributed over a period of 60 months.The process for refunds will become mostly automated as well. The period for acknowledging a refund request will decrease from 15 days to 10 days. If no acknowledgement or deficiency memo is provided within 10 days, the claim will be considered acknowledged.The system will approve 90 per cent of qualified refund requests based on risk evaluation, without intervention from officers. The refund order will be processed within three business days of acknowledgment, in contrast to the current seven days. Any surplus in the electronic cash ledger will be refunded automatically as well.Reduced-value notifications, more lenient enforcementThe council has suggested a materiality threshold of Rs 10,000 for GST notifications. No notification will be provided if the sum in question is below Rs 10,000.The council has also proposed eliminating the authority to make arrests under GST. The limit for prosecution will increase from Rs 1 crore to Rs 5 crore. The overall fine will decrease from Rs 25,000 to Rs 10,000.