The GST Council is unlikely to announce any major rate rationalisation at its meeting this week, with the focus expected to shift to simplifying compliance, speeding up refunds and removing ambiguities that have tied up businesses in tax disputes, sources familiar with the proposals said.

The exercise would seek to make the goods and services tax system work more smoothly rather than reopen the rate structure rationalised last year, the sources said. Relief could come through fewer filings, easier access to input tax credit and quicker release of working capital.

Proposals span small businesses, exporters, e-commerce sellers and manufacturers. They include an optional annual return with quarterly tax payments for eligible small taxpayers, automated processing of refunds and changes to the treatment of services supplied through overseas branches.

The Council may consider giving in-principle approval to an annual-return scheme for businesses with aggregate turnover of up to 50 million rupees that supply exclusively to unregistered customers, the sources said. Eligible businesses would pay tax quarterly but file only one return a year.

The distinction matters because these businesses do not pass input tax credit to their customers. Less frequent filing could therefore reduce their compliance costs without delaying credit elsewhere in the supply chain.

Another proposal would introduce a 10,000 rupees minimum threshold for issuing show-cause notices under specified demand provisions. The relief could extend to pending proceedings, helping clear small disputes whose administrative cost is disproportionate to the revenue involved, the sources said.

For exporters and businesses facing an inverted duty structure, the Council may consider acknowledging refund applications within 10 days, with acknowledgement deemed granted if officials do not act. A proposed mechanism would release 90% of eligible claims following system-based risk checks, while the balance would undergo verification.

The refund proposals could also widen the pool of recoverable credit to include input services in inverted-duty cases and tax paid on plant and machinery. Refunds relating to plant and machinery could be spread over five years, the sources said.

For a manufacturer investing in a new production line, this could mean recovering credit that otherwise remains accumulated in the tax system, easing the pressure on working capital.

The Council may also examine safeguards for genuine buyers whose input tax credit is disputed because a supplier has failed to deposit tax. The proposed approach would distinguish buyers involved in fraud from those who have undertaken genuine transactions, directing recovery towards the defaulting supplier, the sources said.

Service exporters could receive clarification on transactions routed through their own overseas branches. Indian information technology, consulting and engineering firms often use local offices abroad for contracts, billing or collections. Proposed changes would seek to ensure that such arrangements do not, by themselves, prevent supplies to foreign customers from qualifying as exports.

A related proposal would link the place of supply for specified work performed in India on a foreign customer’s goods to the customer’s location. Repair, testing and processing businesses could benefit, subject to the other export conditions being met.

Small e-commerce sellers may also get an easier route to registration in states where they have no premises of their own. One proposal would allow them to use a platform’s warehouse as their registered place of business, supported by verification in their home state and the platform’s consent.

Some targeted rate adjustments and exemption changes may still be considered. These include aligning the tax on retreaded tractor tyres with new tractor tyres and clarifying concessional treatment for certain agricultural inputs, the sources said.

The Council may also consider withdrawing the import IGST exemption available to specified banks and nominated agencies for gold, silver and platinum, bringing different bullion import routes onto a more comparable footing.

The emphasis, however, is expected to remain on reducing friction within the existing framework. For businesses, the principal gains could be less time spent filing and contesting tax claims, and less money left waiting in the system.