GST Council will slash the GST refund cycle to 17 days, allocating 10 days for acknowledgement and 7 days for processing, moving away from the current 21‑45 day lag. Acknowledgement will be deemed complete after the 10‑day window, an effort to curb the backlog that currently keeps 90% of refunds pending.
Automating registration is a parallel priority; 61% of new GST numbers are issued within three days, but the 39% that take longer are slated for a streamlined, fully digital process. The aim is to shrink the remaining wait from several days to a fraction of the current duration.
Small businesses operating across multiple states will benefit from a proposed simplification: if an e‑commerce platform sells through a recognised warehouse, the business can register once instead of in every state. "Nine out of ten sellers on platforms will gain," said an unnamed GST Council official.
When a business seeks to cancel its registration, the Council plans to eliminate on‑site verification. Provided taxes are paid and returns filed, cancellation will occur automatically, moving toward a trust‑based system that removes the need for a physical presence.
The reforms also broaden input tax credit eligibility, covering services such as motor‑vehicle leasing, insurance, and telecommunication infrastructure. An updated invoice‑matching system will link seller reports to buyer claims, allowing real‑time detection of fraudulent credit.
The GST Council will vote on the revised refund schedule and registration changes during its session in July 2026. Pending approval, the new 17‑day timeline will roll out across the country, promising faster refunds and a more efficient tax ecosystem.