The government has finalized the implementation of uniform 5% GST rate for all e-commerce deliveries, irrespective of the mode of transport used, while simultaneously introducing new reforms to expand seller access across states. According to latest government sources, this clarification aims to bring uniformity in the tax treatment of e-commerce deliveries and removes ambiguity over the applicability of GST when goods are transported through different channels. At its 57th meeting on Thursday, the GST Council approved significant changes allowing small online sellers to use e-commerce platform warehouses as their principal place of business in states where they have no physical presence. The current rule requiring a place of business in every state a seller supplies to has kept small sellers within their home states while larger sellers sell across the country, creating structural barriers for national expansion. CBIC Member Sanjay Mangal confirmed to NDTV Profit that the Council had endorsed a uniform tax treatment for operators, irrespective of the model under which they conduct business, with the 5% levy covering both platforms that connect customers with delivery providers and those that offer delivery services directly. The latest clarification extends this uniformity to major platforms including Ola, Uber, Swiggy, Zomato, Flipkart and Amazon, ensuring consistent tax treatment regardless of business structure or operational model.
The 57th GST Council is expected to consider significant reforms to Input Tax Credit (ITC) norms, with proposals aimed at making the system more business-friendly. According to Finance Ministry sources, it is proposed that a genuine buyer who holds the invoice, has taken delivery of the goods, and has paid the supplier in full, including the tax component, should receive unconditional credit. This would eliminate the current requirement for payment up the supply chain, ensuring that credit is not blocked due to payment delays. The proposed reforms seek to bring ordinary business costs currently kept outside the ITC chain back within its ambit, reducing the tax burden that is ultimately factored into prices. The changes would also ensure that services resold within the same line of business are not taxed twice, while widening GST refunds to cover tax paid on services as well as plant and machinery. The government is also examining sector-specific concerns around blocked input tax credit, with issues relating to motor vehicles to be referred to a Group of Officers, while the question of ITC claims on construction has not yet been taken up. On refunds arising from accumulated credit under the inverted duty structure, input service credit available from November 1 would be eligible for refunds under the applicable framework, with ITC claimed on or after April 1, 2027, available for credit.
The 56th GST Council introduced a 40% special tax rate as part of GST reforms that took effect from September 22, 2025. According to reports from The Economic Times, this rate represents the highest GST slab under the revised tax regime and applies to a select group of luxury and 'sin' goods. The government stated that the rate was meant for a limited set of luxury and sin goods, while the broader GST structure was simplified primarily around 5% and 18% slabs. The latest reforms represent a next-generation GST phase after nearly nine years of implementation, focusing on reducing compliance burden while supporting consumption and economic growth.
The GST Council has proposed a 5% GST option for eligible EV passenger transport and rental services, subject to restrictions on input tax credit. The recommendation covers passenger transport services using EVs and vehicle rentals with an operator, including cases where battery charging costs are included in the total service price. However, the 5% GST option comes with restrictions on input tax credit, meaning businesses may charge lower GST rates to customers but lose the ability to claim back taxes paid on business costs. This distinction is important because the proposed 5% rate applies to bundled transport or rental services rather than every EV-related activity, with standalone electric vehicle charging services continuing to attract 18% GST. The proposal affects fleet operators, app-based mobility platforms, corporate transport providers and other businesses using electric vehicles for passenger transport.
Government entities such as MMTC and the State Trading Corporation of India could soon be brought within the GST framework for imports of gold and other precious metals. The proposal is aimed at ensuring that different channels used to import bullion face similar tax treatment and at reducing classification and valuation disputes that have resulted in lengthy litigation. According to The Times of India, the issue is likely to be discussed at the GST Council meeting on October 8. Currently, banks and certain nominated agencies are required to pay 3% GST when importing precious metals, while bullion exchanges have emerged as another import channel. If implemented, the proposal could end the preferential treatment available to some agencies since 2017, when imports were largely routed through a limited number of banks and nominated agencies.
The government is considering measures to make GST registrations and amendments more automated, with Finance Ministry sources indicating that 61% of GST registrations are already being granted automatically within three working days. The proposed changes could further reduce manual intervention, with 66% of applications for registration amendments expected to be processed without officer intervention. The government is also looking to speed up GST refunds, with refund applications to be acknowledged within 10 days and 90% of refunds to be released after a risk-based check. Additionally, another proposal seeks to automatically restore GST registrations that have been suspended for procedural lapses once the taxpayer rectifies the lapse, reducing compliance burden on businesses where suspension is triggered by relatively minor procedural issues. The Invoice Management System (IMS) will become mandatory from the next financial year, with the mechanism expected to streamline business processes, improve supply-chain integration and reduce notices arising from mismatches in tax liabilities. The CBIC will also release a framework for faceless assessments for public feedback, with the proposed system envisaged for taxpayers registered with the Central GST administration.
CBIC Member Sanjay Mangal confirmed to NDTV Profit that the effective GST rate had declined to 10.84% following the rate rationalisation, with taxable supply increasing while revenue growth reached 15% over the preceding three months. With rate differences expected to be eliminated under the revised structure, Mangal said subsequent growth would be reflected in revenue collections. Going forward, GST rate changes will be undertaken once a year, effective April 1, with the GST Council expected to take decisions ahead of the beginning of the financial year. On the next phase of GST reforms, Mangal said the exercise would remain continuous, with a focus on simplifying taxpayers' day-to-day compliance, improving registration and refund processes, and making input tax credit claims smoother. The government plans to undertake GST rate changes once a year, with the revised rates taking effect from April 1, providing businesses with greater certainty when planning their operations and managing tax compliance. Mangal declined to estimate when monthly GST collections would reach ₹3 trillion, stating that growth was progressing steadily and was expected to accelerate.
