AP Chambers Welcomes GST Reforms, Seeks Further Rate Rationalisation
AP Chambers welcomed proposed GST compliance and refund reforms but urged further rate rationalisation in food processing, hospitality, textiles and garments
Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has welcomed recommendations of the 57th GST Council meeting to simplify compliance, ease penalties and prosecutions, expedite refunds, and improve the ease of doing business, while seeking further rate rationalisation in key sectors.
AP Chambers’ president Potluri Bhaskara Rao said the proposed changes address several concerns repeatedly raised by the industry, particularly micro, small, and medium enterprises (MSMEs), over compliance burdens and stringent penal provisions.
He termed as welcome the proposed removal of arrest provisions, increase in prosecution threshold from ₹1 crore to ₹5 crore, reduction in general penalty from ₹25,000 to ₹10,000, and removal of minimum punishment.
Bhaskara Rao said the proposed ₹10,000 threshold for issuing show-cause notices would ease the burden on smaller businesses. Measures to speed up refunds, provide deemed acknowledgements in cases of delays, automatically refund excess cash ledger balances, and provisionally sanction 90 per cent of eligible refund claims would improve working capital availability.
The AP Chambers’ president welcomed expanded input tax credit (ITC) provisions covering employee health and life insurance, outdoor catering, telecom towers, and pipelines outside factory premises, besides free samples and expired or legally destroyed goods.
Refunds of accumulated ITC on input services from November 1, 2026, and capital goods from April 1, 2027, would provide further relief. Intelligence-based authorised inspections and simplified GST registration and compliance, including for eligible small e-commerce sellers, would help reduce delays and facilitate business operations.
However, Bhaskara Rao urged the GST Council to rationalise GST rates in food processing, fruit/pulp-based beverages, hospitality, textiles, and garments. He pointed out that the existing tax structure offers insufficient advantage to fruit/pulp-based carbonated beverages over chemically formulated alternatives. As a result, accumulating fruit pulp stocks are affecting processors, beverage manufacturers, and horticulture growers. Rationalised rates could encourage processing, reduce wastage, and expand market opportunities for farmers, he observed.
The AP Chambers’ president sought a review of GST provisions affecting hospitality to promote affordable services, tourism, investment, and employment. Lower GST on exhibition participation and industry association membership fees would help reduce costs for MSMEs and other businesses. He appreciated the council's consultative approach and called for further reforms to ensure simpler compliance, fair taxation, and timely refunds.
