FM cautions GST field formations against burdening taxpayers, pushes for tech-driven compliance

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on October 24 cautioned Goods and Services Tax (GST) field formations against imposing unnecessary burdens on taxpayers and instead directed officials to leverage technology and risk-based parameters for compliance.

Speaking at the inauguration of the new Central Goods and Services Tax (CGST) Bhawan in Ghaziabad, the minister said that enforcement should be intelligent and targeted, not suspicion-driven.

“Risk-based parameters must do the heavy lifting and not the taxpayer. We do not want anybody from the GST field formations adding one little more burden on the taxpayer,” she said, emphasising that technology should be used to conduct smart enquiring into the situation rather than seeking excessive documentation from compliant taxpayers.

“Don’t look at everyone with suspicion. Don’t carry a GST 1.0 mindset, look at the acute need to work together to become developed by 2047. We don’t have time and luxury of another 70 years to develop,” Sitharaman added.

She asked field officers to form dedicated teams for grievance redressal and to identify recurring issues faced by taxpayers, noting that while “bad sheep among taxpayers” must be caught, enforcement should be guided by data and fairness.

“If there are people who are bad sheep among taxpayers, follow the protocol to catch hold of them. But don’t look at everybody with suspicion,” she cautioned.

Simplified GST registration

As a part of the next gen GST reforms, Sitharaman said that a simplified registration system will come into effect from November 1, 2025. Under this reform, registration will be granted automatically within three working days for two categories of applicants – those identified by the system based on data analysis and those who self-assess their monthly output tax liability at up to Rs 2.5 lakh.

“From first November 2025, the simplified GST registry will grant automatic registration within three working days in two cases... This single reform is expected to benefit 96 percent of new applicants,” she said.

Sitharaman directed field formations to ensure smooth implementation of the process, stressing that their “task is to operationalise it and ensure that there are no frictions in the process.”

Faster disciplinary action

The Finance Minister also issued instructions for greater accountability and timely action within the Central Board of Indirect Taxes and Customs (CBIC).

“Disciplinary proceedings ongoing against CBIC officials must be concluded expeditiously in a time-bound manner,” she said, while also directing that proposals from field units for new infrastructure “must call for tenders by end of this fiscal.”

GST reset

Sitharaman’s remarks come amid buoyant economic activity during the festive season, which has generated about 50 lakh temporary jobs across retail, delivery, and transport sectors. The Confederation of All India Traders (CAIT) reported record festive sales of Rs 6.05 lakh crore this year, reflecting strong domestic demand.

Linking the GST reforms to India’s broader development goals, Sitharaman said the country’s economic policies, including GST, have had a strong impact. “In the process of eight years, there was a reset needed in GST towards next-gen reforms,” she said, describing the overhaul as a “big sweep of reforms in next-gen GST.”

The GST, implemented in July 2017, was one of India’s most significant indirect tax reforms aimed at unifying the domestic market. Over the years, the government has introduced multiple measures to simplify compliance, expand digital monitoring, and improve revenue efficiency. The GST 2.0, described as “next-gen GST,” has focussed on rate cuts, automation, faster processing, and taxpayer convenience, aligning with India’s Viksit Bharat 2047 vision.