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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteGST 3.0 should mean a shift from building digital tax controls to using them to make compliance more predictable: reduce friction for low-risk businesses, make legitimate input tax credits usable, and reserve the toughest enforcement for evidence of deliberate fraud. That is R. Suryamurthy’s policy argument, not an enacted GST programme or a change in law.
What “GST 3.0” means in this argument
In an opinion article published by Northlines on October 5, 2026, R. Suryamurthy describes GST 3.0 as a possible next phase of administration, not a formally notified scheme. The first phase, in his account, built a digital framework around registrations, invoices, returns, input tax credits and payments. The next phase should use those records to distinguish deliberate cheating from the difficulty of navigating complex rules.
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The distinction matters because a tax system can collect revenue while still imposing disproportionate costs on compliant businesses. Suryamurthy argues that success should also be judged by predictability, the time and effort required to resolve disputes, access to valid credits and refunds, and whether enforcement resources are concentrated on serious evasion.
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Why input tax credit sits at the centre of the bargain
Input tax credit is intended to prevent tax paid on business inputs from cascading through the supply chain. Suryamurthy argues that credits can nevertheless become stranded because of inverted duty structures, disputes over eligibility or problems on a supplier’s side. If a business cannot use a credit it is entitled to, tax may become a cost rather than being offset as intended. These are the author’s policy concerns, not a determination of any individual taxpayer’s legal entitlement.
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That creates a difficult balance for the state. Authorities have a legitimate interest in stopping credits claimed against fictitious transactions or tax that was never paid. But, Suryamurthy argues, a purchaser should not be expected to investigate suppliers with powers that belong to tax authorities. He recommends making responsibility proportionate to what the buyer knew and could control, alongside a clear and usable framework for valid credits. He also calls for rate reform that takes credit effects into account.
How compliance and enforcement could be better balanced
The proposed bargain is not leniency toward fraud. It is a more deliberate separation of routine compliance problems from criminal conduct.
Make low-risk compliance less burdensome
Digital records can help authorities identify patterns and allocate attention, but the policy test is how they are used. Suryamurthy’s case is that lower-risk businesses should face less routine scrutiny, and that honest mistakes should be easier to correct without prolonged disputes. This is a recommendation about administration, not a description of a new right or procedure already in force.
Keep criminal powers focused on demonstrable wrongdoing
The author accepts that fake invoicing and organized evasion warrant a strong response. He argues, however, that criminal sanctions should be linked to demonstrable criminal conduct rather than used as an extension of an ordinary tax assessment or as a response to disagreement about how rules should be interpreted. He also warns that arrest powers may discourage businesses from challenging a tax demand before guilt has been established. These are Suryamurthy’s arguments; they do not, by themselves, establish the current legal test for arrest or prosecution.
What was reported ahead of the October 7 Council meeting
The GST Council is the constitutional body that makes recommendations on GST implementation matters. Its official website provides Council materials, legislation, circulars and FAQs: GST Council.
A Business Standard report dated October 4, 2026, citing unnamed people familiar with proposals, said the Council was expected to consider enforcement changes at its October 7 meeting. The reported proposals included requiring court approval for arrests, raising the criminal prosecution threshold to ₹5 crore, and narrowing prosecution so that routine classification, valuation or input tax credit disputes would not trigger it. These were reported proposals—not evidence that the Council adopted them or that the law changed. Check a dated official Council release or minutes for the meeting’s outcome. The report is available at Business Standard.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to judge whether the next phase delivers
Collections are one measure of GST, but they do not answer whether the system is predictable or proportionate. Suryamurthy’s article reported gross collections of about ₹12.46 lakh crore for April–September 2026, 11.6% above the same period a year earlier, and September collections of around ₹2.04 lakh crore, up 14.7%. Those figures are reported by the author; they are not independently confirmed here.
His suggested tests focus on what businesses and tax authorities can actually do:
- Can a low-risk business register promptly?
- Can a legitimate refund move without repeated intervention?
- Can an honest taxpayer correct an error without being drawn into a prolonged dispute?
- Can authorities identify serious fraud without routinely resorting to criminal powers?
- Can a business claim a credit it is entitled to and get back to operating without a routine compliance problem becoming a battle with the state?
Together, those questions shift the measure of performance from collections alone to predictable compliance, usable credits and refunds, proportionate enforcement, and fair, timely dispute resolution. As Suryamurthy puts it: “The first nine years were about building the tax. The next phase should be about building confidence in it.”
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