GST Compliance Relief Measures: A Critical Look at Council’s Decision

By Prabha Gupta, September 3,2025

The GST Council recently approved a set of GST compliance relief measures, claiming to ease the filing burden for businesses. While these measures offer minor relief on paper, they also highlight the deep structural issues still embedded in India’s GST framework.

At best, this is a band-aid for a broken system. To understand why, we need to go back to how this system was born—and where it went wrong.

GST in India: A Promise Lost in Practice

Launched in July 2017, the Goods and Services Tax was billed as India’s biggest tax reform since independence. It replaced a web of indirect taxes—excise duty, VAT, service tax, entry tax—with a unified structure. The aim was to simplify taxation, remove cascading effects, and make compliance easier.

Initially, GST was sold as “one nation, one tax.” In practice, it became “one nation, multiple rates and infinite forms.” Businesses suddenly had to file multiple monthly returns, match invoices line by line, and risk losing input tax credit for others’ mistakes. Compliance turned into a full-time job, especially for MSMEs with limited staff.

The system’s complexity undermined its core promise. While GST streamlined revenue for the government, it tangled up businesses in red tape.

What the New GST Compliance Relief Measures Actually Offer

The latest GST compliance relief measures aim to address these long-standing issues. The Council has promised simplified return forms, pre-filled data, shorter refund timelines, and more automation.

According to the official https://www.gst.gov.in GST portal, over 1.4 crore businesses are registered. For many of them, especially small traders and startups, compliance consumes valuable time and resources. The new measures claim to fix that—but do they?

Read: Our in-depth guide to GST return filing for small businesses

While automation and pre-filled forms sound promising, the devil lies in the execution. Previous efforts to simplify compliance—like the introduction of GSTR-2B or QRMP scheme—suffered from poor communication, confusing updates, and half-baked rollouts.

The Good, the Bad, and the Ignored

To be fair, some parts of these relief measures do help. Streamlining refund processes and reducing audit pressure are long-pending demands. Also, reducing human interaction with tax officers minimizes corruption and arbitrary scrutiny.

However, the measures fail to address deeper flaws:

• The multiple slab system (5%, 12%, 18%, 28%) remains untouched.
• Inconsistencies in input tax credit rules still confuse even experts.
• Tax rate revisions remain unpredictable, harming planning and pricing.
• Dispute resolution continues to be slow and litigation-heavy.

The GSTN portal, while improved, still crashes near deadlines. Many businesses report errors, mismatched data, and poor support.

Even as the Council discusses “relief,” small businesses continue to spend thousands each month on accountants just to stay compliant.

Relief or Lip Service?

There’s also a larger question: Are these GST compliance relief measures genuine structural reforms, or are they politically timed adjustments?

With state elections around the corner and economic recovery slowing, easing compliance could be a tactic to pacify business groups. But without deeper reforms, these measures could quickly lose relevance.

Even the PBureau summary of the measures sounds more like a press release than a policy blueprint.

Experts like former Finance Secretary Subhash Chandra Garg have also warned that GST risks becoming a “compliance trap” unless fundamentally restructured. Economic Times analysis echoes the same concerns.

Final Thoughts: More Fix, Less Flash

The approval of GST compliance relief measures is a welcome signal, but it’s far from a solution. The GST system needs a full review—starting with rate rationalisation, credit clarity, and dispute resolution.

Without these, we risk repeating the same cycle: fix a form, wait for confusion, issue a circular, rinse, repeat.

If the Council truly wants to help businesses, it must go beyond relief and aim for reform. Because small tweaks won’t fix a system designed for large corporations but imposed on corner shops.