Renowned chartered accountant Gaurav Kenkre has termed the GST Council recommendations as a “major boost” and also emphasised their positive impact on businesses – key sectors in Goa.
In a communique; Kenkre, who deals with GST matters and works extensively with MSMEs, shared the following information.
“In a major boost to trade and industry, the GST Council has introduced key reform measures aimed at easing liquidity and streamlining the tax refund ecosystem. These developments, describing them as transformative steps toward improving working capital efficiency for businesses, particularly key sectors in Goa.
Key Highlights of the GST Council Reforms:
- Automated & Faster Refund Process:
•Shorter Acknowledgement Window: The timeline for acknowledgement of a refund claim has been reduced from 15 days to 10 days. If no acknowledgement or deficiency memo is issued within 10 days, the claim will be system-acknowledged automatically.
•Automated Provisional Sanction: The GST system, rather than individual tax officers, will automatically sanction 90% of the refund claim based on automated risk assessments.
•Faster Order Issuance: Orders will now be issued within 3 working days of acknowledgement (down from 7 days). - Inclusion of Input Services in Inverted Duty Structure (IDS) Refunds:
•Unused Input Tax Credit (ITC) accumulated due to higher tax on inputs than outputs will now cover input services in addition to goods, effective for credit availed on or after November 1, 2026. - Refund of Tax Paid on Capital Goods (Plant & Machinery):
•The long-standing exclusion of plant and machinery ITC from refunds has been removed.
•Refund on plant and machinery will be allowed at 1/60th of the credit per month, aligned with a 5-year asset life, applicable for credit availed on or after April 1, 2027.
“These updates address long-standing structural bottlenecks in the GST framework. For a state like Goa, where industries such as Pharmaceuticals, Shipbuilding, and Packaging form the backbone of manufacturing, this is a massive shot in the arm.
“Currently, these sectors suffer under an Inverted Duty Structure where input GST exceeds output GST. While they could claim refunds on input goods, substantial credit locked up in input services and capital expenditures (Capex/Plant & Machinery) remained completely blocked in their credit pool.
“By allowing ITC refunds on input services and amortized Capex, manufacturers in Goa setting up new lines or upgrading capacity can directly recover their tax investments. This will significantly unlock idle capital, enhance cash flows, and sharpen the competitive edge of Goan industries.”
