GST Beneficial for Industry, But Clarity and Faster Dispute Resolution Needed
India’s Goods and Services Tax (GST) has largely benefited businesses, streamlining indirect tax compliance. But industry experts still seek greater clarity and faster dispute resolution to reduce litigation and improve ease of doing business.
How GST Has Benefited Industry
Since its launch in July 2017, GST has replaced multiple indirect taxes. Here’s how businesses have gained:
- Uniform tax structure across states
- Seamless input tax credit (ITC) across the supply chain
- Improved logistics efficiency due to the removal of interstate checkpoints
- Simplified compliance via online portals (GSTN, e-invoicing, etc.)
- Wider tax base, making it harder to evade taxes
Expert View: “GST has created a more transparent and digitised system. But the rules must keep pace with business realities,” says CA Vikram Jain, Indirect Tax Consultant.
But What’s Holding Back GST Efficiency?
Despite success, certain gaps remain. Key among them:
1. Frequent Rule Changes & Lack of Clarity
- Industry faces ambiguity in ITC eligibility, tax rates, and place of supply rules
- Numerous circulars, FAQs, and notifications complicate interpretation
- Example: Confusion around restaurant services in hotels with room tariffs above ₹7,500, clarified only recently by CBIC
2. Delayed Dispute Resolution
- Thousands of GST appeals are pending due to absence of GSTAT (Goods and Services Tax Appellate Tribunal)
- Result: Taxpayers are stuck after first appeal (Commissioner level)
- Constitution of GSTAT under Section 109 of CGST Act was notified in 2023, but benches are still being operationalised in 2025
3. ITC Mismatches and GSTR-2B Dependency
- Small errors in vendor filing block ITC for buyer
- Section 16(2)(aa) mandates matching with GSTR-2B — adding compliance burden
Latest Government Efforts to Improve GST System
| Area | Recent Improvements |
|---|---|
| GSTAT Setup | Rules notified; 31 benches being established pan-India (as per CBIC 2025 update) |
| E-invoicing | Threshold reduced to ₹5 crore from August 2023 to improve transparency |
| ITC Automation | Auto-drafted ITC statements (GSTR-2B) made available for monthly tracking |
| Clarifications | CBIC issuing regular FAQs and circulars to address common queries |
Legal Reference:
- Constitution (101st Amendment) Act, 2016
- CGST Act, 2017 – Sections 16, 109, 112
- Recent CBIC Circular No. 248/05/2025-GST (dated 26 March 2025)
What Businesses Want Next
To make GST truly seamless, industry bodies like FICCI, CII, and CA associations are demanding:
- Time-bound GSTAT disposal mechanism (within 6 months)
- Fewer retrospective clarifications and more proactive guidance
- Simplified ITC rules for real-time claim certainty
- Grievance redressal helpline with appellate authority integration
Summary
GST has improved tax compliance and transparency in India. But to fully support business growth, the government must focus on clarity in GST laws and set up a faster, robust dispute resolution system through functioning GSTAT benches.
FAQs
Q1. Is GST beneficial for businesses in India?
Yes. GST simplifies indirect taxes, offers ITC benefits, and promotes uniformity across states.
Q2. Why is faster dispute resolution important in GST?
Without GSTAT, taxpayers are stuck at the first appeal level, delaying refunds and increasing litigation.
Q3. What is GSTAT and why is it delayed?
GSTAT is the GST Appellate Tribunal. Though notified, it’s still in the setup phase across states in 2025.
Final Thoughts
The GST system has evolved impressively over eight years, but India’s next big reform must ensure faster dispute resolution and legal clarity. This will boost trust and reduce the cost of compliance.
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