Nirmala Sitharaman Announces Faceless GST Administration System for 2 Lakh Taxpayers Operating Across Multiple States:

Finance Minister Nirmala Sitharaman on Thursday announced plans to introduce a faceless system for around 2 lakh Central GST taxpayers operating across multiple states. The move is part of the Centre’s efforts to simplify tax administration and make GST-related processes easier for businesses.

The Finance Minister said that following last year’s GST rate cuts, the effective tax rate on goods and services has fallen from 11.8% to 10.8%. She added that 99% of the issues related to GST rates and procedures have been addressed through rate rationalisation and other reforms. Going forward, GST rate changes are expected to become an annual exercise, with changes implemented from April each year.

Sitharaman said the government plans to introduce a centralised GST administration system for taxpayers registered under multiple Central GST jurisdictions. Under the proposed system, taxpayers will be able to access services through a single window for return scrutiny, audits, tax-related decisions, appeals, taxpayer services and grievance redressal.

A working group under the Central Board of Indirect Taxes and Customs (CBIC) has submitted its report on the proposed framework. The government plans to invite public feedback before the next Union Budget, with implementation expected in the next financial year.

The Finance Minister said the government aims to extend the faceless approach used in income tax administration to GST as well. She clarified that the proposal is a Centre-led initiative and is not linked to the GST Council.

India has around 69.5 lakh taxpayers registered under the Central GST administration, including approximately 2 lakh taxpayers who operate across multiple GST jurisdictions. Currently, administrative control over taxpayers is divided between central and state tax authorities according to a turnover-based formula set by the GST Council.

About 90% of the taxpayers with an annual turnover of less than Rs 1.5 crore are administered by state tax authorities, and the remaining 10% by the Center. The administrative control is shared equally between the central and state tax authorities for taxpayers with a turnover of more than Rs 1.5 crore.