Will GST 2.0 be updated?

• The Public Accounts Committee (PAC) has called for a comprehensive review of the Goods and Services Tax (GST) framework to eliminate unnecessary procedures and requirements.

• The PAC criticized the absence of a mandatory CAG audit of the Compensation Fund Account for over six years, which has negatively affected the release of compensation to States.

• The PAC also criticised the Ministry’s “lackadaisical” approach for not responding to the audit, seeking clarification on 2,447 inconsistencies that have kept a total of ₹32,577.73 crore in balance.

• Issues with the taxation process include delays in inflow to the government and tax refunds to businesses requiring working capital.

• The committee noted instances of incomplete tax refunds to businesses due to confusion over tax jurisdictions.

• The committee also noted inadequate mechanisms for filing and refunds, with prolonged waiting periods for refunds potentially causing cash flow challenges.

• The committee expressed concerns about the impact on micro, medium and small enterprises (MSMEs) and exporters due to the “complexity” of GST norms.

• The committee underlined a need to simplify the overall regime and expedite the handling of appeals and establishment of the GST Appellate Tribunal.