Industry participants said on Monday that they expect the GST Council to address input tax credit (ITC) issues and introduce statutory safe-harbour protections for bona fide recipients.
The industry chamber PHDCCI listed several expectations, including an amendment to Section 16(2)(c) to ensure that a recipient who holds a valid invoice, has received the supply, paid through banking channels and acted without collusion can retain the ITC. Industry wants authorities to first recover the tax from the defaulting supplier.
Industry also seeks relaxation of the blocked-credit provisions under Section 17(5) for motor vehicles, food and beverages, outdoor catering, beauty and health services, club memberships and travel benefits. It wants businesses to claim credit for all expenditure incurred for business purposes and recorded in their books, the report noted.
Industry also wants the Council to reduce litigation and provide clear transitional provisions covering interest- and penalty-only demands, as well as recoveries under Rule 142 and DRC-07.
It also wants authorities to classify amounts paid through voluntary settlements as charges, thereby removing the stigma and collateral consequences associated with such payments.
Ashok Kumar Batra, Chair of the Indirect Taxes Committee at PHDCCI, called for a time-bound mechanism to utilise or refund cess balances stranded after the discontinuation of the cess.
Industry also wants the government to ease the movement of credit across GSTINs linked to the same PAN, particularly to address credit accumulation in registrations with low output tax liability.
It has also proposed barring notices where the tax demand falls below ₹10,000, a threshold that could cover about 20% of cases by number. The proposal would also apply to cases pending adjudication and appeals.
For the GST Appellate Tribunal’s functioning, the industry chamber expects practical measures such as uniform e-filing, clarity on pre-deposit adjustments, clubbing of appeals under Rule 18 of the GSTAT Rules and a monetary threshold for departmental appeals.
The Union Finance Minister has publicly stated that the meeting will consider only process reforms under “Next-Gen GST”. The government does not expect any further rate proposals following the two-slab rationalisation that took effect on September 9, 2025.