EY India has urged changes to India’s Goods and Services Tax (GST) system to ease business compliance, including allowing input tax credit (ITC) on essential services and offering centralised GST registration to large taxpayers. These are policy proposals, not confirmed changes to GST law.
What EY India proposed for GST
A Business Standard report published January 15, 2026, on EY India’s Budget 2026 recommendations, described two measures intended to reduce compliance burdens:
- Allow ITC on essential services: EY proposed making credit available for essential services in technology, media and telecom. The proposal concerns whether businesses can claim credit for tax paid on qualifying inputs; it does not establish that such credit is currently allowed.
- Centralise GST registration for large taxpayers: EY proposed a centralised registration option for large businesses, which could reduce administrative complexity for organisations operating across locations.
The report placed the recommendations within a wider call for tax certainty, investment and sector-specific reforms. The sources describing these proposals do not establish that the government adopted them.
Why credit blockages and refunds matter to businesses
Input tax credit can help prevent tax paid on business inputs from becoming an embedded cost, when the law permits a claim. But eligibility alone does not settle every practical problem: businesses also need a workable process to claim, reconcile and use credits, and to obtain refunds where eligible.
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In an EY India podcast discussion on GST’s nine-year evolution, Bipin Sapra, EY India’s Partner and Indirect Tax Policy Leader, said industry wanted credit rationalisation that would identify blockages and make the system more efficient. He argued that better credit efficiency could reduce product costs and improve operating efficiency. Those are EY’s stated rationale, not measured outcomes in the cited material.
Sapra also described continued improvement in refunds, registrations and other compliance processes as industry priorities. The discussion gives no estimate of refund delays, blocked credit amounts or the financial cost to businesses, so those effects cannot be quantified from the available figures.
Digital GST processes do not guarantee frictionless refunds
CBIC Member Sanjay Mangal said GST registrations, refunds, returns and legal disputes are available through the GST portal and handled digitally. That describes the channel for these processes; it is not evidence that every refund is processed promptly or that every taxpayer’s claim is straightforward.
For a business, digitisation and policy reform address different issues. A portal can provide an online route for filing and administration, while eligibility rules determine whether a credit can be claimed and whether a refund is due. EY’s proposals address those policy and administrative concerns, but the sources here do not provide a complete account of current GST law or instructions for an individual refund claim.
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What the taxpayer figures do—and do not—show
EY’s nine-year discussion cited 68 lakh taxpayers at GST implementation and more than 1.6 crore at the time of the discussion. The figures illustrate the scale of the taxpayer base described by EY, but they do not measure refund performance, credit blockages or compliance costs.
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What businesses should take from the proposals
- Treat ITC on essential services and centralised registration as recommendations, not enacted entitlements or available registration options.
- Separate the question of whether a credit is legally eligible from the administrative question of how a return, refund or registration is processed.
- Check current official GST rules and portal guidance before making a claim; the reported proposals do not determine an individual business’s eligibility.
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