GST Framework for Simplified Compliance

The Finance Ministry must streamline the GST framework by eliminating unnecessary procedures that complicate compliance. A revamped GST 2.0 should be developed after stakeholder consultations to enhance efficiency.

Simplifying Return Filing & Compliance

• Consolidation of Forms: Reduce complexity by merging GST return forms.
• Lower Filing Frequency: Smaller businesses (MSMEs) should have fewer compliance requirements.
• Tiered Compliance Approach: Different rules for small businesses vs. large enterprises to reduce the burden on MSMEs.

Enhancing the GST Portal

• Improve user-friendliness by providing step-by-step guidance to taxpayers.
• Strengthen the digital interface to ensure a seamless filing experience.

Addressing Compliance & Registration Issues

• Harsh Penalties for Errors: Honest taxpayers face criminal penalties for unintentional mistakes—PAC urges more lenient measures.
• Aadhaar-Based Authentication Challenges:
  • Technical issues hinder registrations, delaying the ‘One Nation One Tax’ vision.
  • PAC calls for resolving authentication bottlenecks.

Boosting Revenue Collection with AI & Data Analytics

• Declining Indirect Tax Contribution: Dropped from 38.76% (2017-18) to 36.92% (2019-20).
• Leverage AI & Big Data:
  • Predict tax revenues more accurately.
  • Improve tax compliance tracking.

Transparent Refund Processing & Grievance Redressal

• Define Clear Refund Timelines: Faster and more structured claim settlements.
• Regular Status Updates: Taxpayers should be informed at each stage of refund processing.
• Dedicated Grievance Mechanism: A separate system to handle refund-related complaints efficiently.

MSME-Specific GST Framework

• Fast-Track Return Filing & Refunds: Automate processes to ease compliance.
• Reduce Filing Frequency: Allow MSMEs to file returns less frequently.
• Simplified Online Reporting: A user-friendly digital system for small businesses.

The PAC’s recommendations aim to simplify GST compliance, reduce procedural burdens, and enhance revenue collection through technology-driven solutions and structured reforms.