Sat Mar 29 20:30:00 UTC 2025: ## Parliament Panel Calls for GST 2.0 Over Compliance Issues

**New Delhi, March 30, 2025** – The Indian Parliament’s Public Accounts Committee (PAC) has recommended a comprehensive overhaul of the Goods and Services Tax (GST) framework, calling for a “GST 2.0” to address significant compliance issues. The report, released today, highlights numerous problems impacting businesses, particularly MSMEs and exporters, and reveals a backlog of unresolved cases totaling ₹1.45 lakh crore.

Key concerns raised by the PAC include:

* **Lack of Audits and Compensation Delays:** The absence of mandatory Comptroller and Auditor General (CAG) audits for over six years has hindered the timely release of compensation to states, exacerbating existing concerns about fiscal autonomy. ₹32,577.73 crore remains in balance due to 2,447 inconsistencies.

* **Registration and Cancellation Issues:** The committee criticized the “lackadaisical” approach of the Finance Ministry in addressing inconsistencies and the lack of proper documentation in the automated registration cancellation system, citing 6,353 cases where show-cause notices were not issued before cancellation.

* **Refund Delays and Complexities:** Prolonged waiting periods for tax refunds are causing cash flow problems for businesses, particularly MSMEs and exporters. The PAC urged the implementation of clearer timelines and regular updates on the status of refund claims. Furthermore, the complexity of export-related documentation and ITC claim processing was also highlighted as a cause for concern.

* **Pending Investigations:** A staggering 19,730 cases with tax implications of approximately ₹1.45 lakh crore remain pending investigation, many for over two years. The PAC urged the government to expedite appeals processing and establish the GST Appellate Tribunal to reduce the backlog.

Legal expert Brijesh Kothary of Khaitan & Co. added that taxpayers lack the ability to edit or withdraw registration applications and often receive no explanation for rejections.

The PAC’s report underscores the need for simplification of GST norms, improved data management, and a more efficient dispute resolution mechanism. The committee’s call for a “GST 2.0” following broad stakeholder consultation aims to create a more streamlined and user-friendly tax system.

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