Sitharaman Says Next GST Phase to Focus on Compliance, Refunds, ITC

Next phase of GST reforms to focus on simplifying compliance, refunds, ITC: FM Sitharaman

New Delhi, October 5

In a LinkedIn article, Sitharaman said the reforms expected before the GST Council on October 7 will build on nine years of GST implementation and experience.

"Over the past twelve years, our government has worked to create those conditions. GST's introduction in 2017 established a common national framework for indirect taxation. Next-Gen GST carries that effort forward, drawing on nine years of implementation and the experience of taxpayers and States."

Sitharaman stressed that Next-Gen GST is delivering relief to taxpayers while supporting economic growth, with the next phase set to focus on simplifying compliance across key areas.

"Next-Gen GST is delivering on its twin objectives of relief for taxpayers and greater momentum for our economy. The next phase will focus on making compliance simpler across registration, returns, refunds, disputes and input tax credit," she said via official X.

Sitharaman noted that between October 2025 and July 2026, taxable supplies rose 25.8 per cent year-on-year, that builds "an encouraging foundation for a reform intended to support both enterprise and public finances."

Gross GST collections also remained robust, reaching Rs 12.46 lakh crore, 11.6% year-on-year increase, between April and September 2026. Reported sales to consumers (B2C) also surged by 26.7% in the post-reform comparison.

At the same time she noted, "Every month from June through September recorded double-digit annual growth; together, collections for these four months accelerated by nearly 15%. Net collections, after refunds, also grew by 10.4% over the half-year."

FM also highlighted that the reported taxable supplies grew across all 11 sector groups and all major States, stressing "in an economy as diverse as India's, this spread is significant."

The Minister also said that, "Businesses in Tier-2 and Tier-3 towns should be able to build those relationships while continuing to invest and employ people locally."

She added that refunds and input tax credit will be key focus areas in the next phase of GST reforms. Around Rs 1.80 lakh crore was refunded to taxpayers between April and September.

"The post-reform figures show that the share of tax liability discharged through credits rose, while accumulated credit declined relative to taxable supplies. This is encouraging for businesses that depend on the effective use of eligible credit. For a smaller firm, working capital determines how readily it can purchase inputs, fulfil an order and take on the next one," she said.

— ANI