GST Shake-Up: AP Chambers Praises Key Reforms, Pushes for Urgent Rate Cuts

The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has warmly welcomed the significant reforms recommended by the 57th GST Council meeting, particularly those aimed at easing compliance for Micro, Small and Medium Enterprises (MSMEs). However, the chamber's president, Potluri Bhaskara Rao, on Friday reiterated a strong demand for crucial Goods and Services Tax (GST) rate cuts in key sectors like food processing, hospitality, and textiles to truly boost investment and employment. These recent changes, announced on October 8, 2026, focus heavily on improving GST administration rather than altering tax rates. The Council approved measures like removing arrest powers for GST officers, increasing the prosecution threshold from Rs 1 crore to Rs 5 crore, and reducing the general penalty from Rs 25,000 to Rs 10,000, which are set to benefit businesses by reducing regulatory friction. Furthermore, proposals for faster GST refunds, including 90% provisional refunds for eligible claims, and expanded Input Tax Credit (ITC) eligibility are expected to significantly improve working capital for MSMEs, many of whom have struggled with cash flow issues under the existing framework. While these procedural simplifications are a welcome step towards enhancing the ease of doing business, the absence of rate rationalisation remains a sticking point for industry bodies. The proposed reforms, with some effective from November 1, 2026, and others from April 1, 2027, mark a shift towards a more taxpayer-friendly system, but the AP Chambers will continue to push for lower tax rates to stimulate growth across critical sectors, hoping for further consideration in future GST Council meetings.