The GST Council convened in New Delhi on Thursday to decide on sweeping changes that would let businesses reclaim 90 percent of accumulated GST on capital goods and input services within seven days— a move that could shave 2‑4 percent off manufacturers’ working‑capital requirements.
Pratik Jain, partner at Price Waterhouse & Co., said the proposal would lower product prices and free up funds for reinvestment, adding that a provisional refund would ease cash flow for firms running long‑gestation projects.
The council also plans to allow refunds on plant and machinery over a five‑year period, a concession that could unlock capital for sectors like semiconductors and refineries. According to government data, 38,700 taxpayers have claimed export refunds, while 13,100 have paid taxes on plant and machinery; 15,200 and 17,300 have paid taxes under inverted rate structures on plant and machinery and input services, respectively.
Adding to the fiscal relief, the draft will treat employee‑related expenses—insurance, cafeteria, and other benefits—as recoverable credits. In a parallel move, the council is set to decriminalise GST offences, removing arrest provisions and easing prosecution, a change praised by trade activist Sajjan Raj Mehta as a boost to business confidence.
The council’s vote is scheduled for Friday, after which the new refund framework will be published in the Gazette, triggering an immediate 90‑percent provisional rebate window for eligible firms.