Relief for small cars; 40% GST on large cars

THE Goods and Services Tax (GST) Council on Wednesday reduced levies on small cars and mass-market motorcycles (engine size below 350cc).

- Pushpita Dey @ New Delhi

THE 56th meeting of the Goods and Services Tax (GST) Council on Tuesday approved several measures aimed at easing compliance and facilitating trade, including faster refunds, simplified registration schemes, and clarity on post-sale discounts. Most of these reforms will be operational from November 1, 2025.

For ease of doing business, a simplified GST registration scheme will be introduced for small and low-risk applicants, allowing automated registration within three working days. Applicants with monthly output tax liability of up to ₹2.5 lakh on business-to-business (B2B) supplies will be eligible, covering nearly 96% of new registrants. A separate simplified registration scheme for small e-commerce suppliers operating across multiple states was also approved in principle.

One of the key decisions was to sanction risk-based provisional refunds for exporters and suppliers to special economic zones (SEZs). Under the revised framework, 90% of refund claims will be released provisionally based on system-identified risk parameters, while only high-risk cases will undergo detailed scrutiny. A similar provision has been extended to refund claims arising from inverted duty structure (IDS), ensuring quicker release of funds to businesses.