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GST Council recommendations likely to impact food processing sector MSMEs
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Saturday, 10 October, 2026, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The 57th GST Council meeting held here has made several key recommendations relating to process reforms primarily covering registration, returns, refunds, and adjudication, alongside clarifications regarding the applicability of GST on certain goods and services to streamline compliance and facilitate trade.
Experts say that these decisions are likely to impact thousands of Micro, Small, and Medium Enterprises (MSMEs), including those in the food processing sector.
Among the key interventions approved by the GST Council are the removal of arrest provisions under GST, raising the prosecution threshold from Rs1 crore to Rs 5 crore, and reducing general penalties from Rs 25,000 to Rs 10,000. Further measures include wider eligibility for input tax credit and refunds, simplified registration, faster refund processing to improve working capital, and standardised norms for GST notices and proceedings.
To boost logistics, the Council recommended intelligence-based and authorised interception of goods to enable smoother inter-state transport. Additionally, the Council approved simplified registration for small e-commerce sellers, measures to facilitate service exports, and an in-principle optional scheme for small consumer-facing businesses with turnovers up to ?5 crore.
Trade leaders emphasised that these recommendations will accelerate the government's vision of "Ease of Doing Business."
Praveen Khandelwal, CAIT Secretary General and Lok Sabha MP, highlighted key legal reliefs including decriminalisation within the GST structure. He pointed out that removing arrest provisions, raising the prosecution threshold, and slashing penalties will alleviate long-standing anxieties among small business owners, fostering a trust-based compliance environment.
Echoing similar views, Shankar Thakkar, CAIT Secretary, noted that administrative and procedural changes will simplify operations and unlock new market opportunities for small enterprises.
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