GST Council weighs freeing locked tax credit (opens the source in a new tab)
- The GST Goods and services tax: India's nationwide tax on most sales. Council meets on Wednesday to consider freeing thousands of crores of blocked input tax credit, removing arrest powers and raising prosecution thresholds.
- Tax paid on plant and machinery could be refunded monthly over five years, and credit would widen to employee insurance, telecom towers and pipelines.
- No show-cause notices would go out below ₹10,000; of about 95,000 such notices a year, recovery is only about 0.08% of the sums involved.
- <₹10,000
- no notice below this
- 95,000
- mismatch notices a year
Why it matters Freed-up credit could act like a Capex Capital expenditure: money a company spends on long-lived things like buildings, chips and data centres. stimulus without a new subsidy, one tax expert says.
Other side These are proposals awaiting Council approval. Will looser safeguards invite more fraud?