NEW DELHI : A string of changes to rules and procedures seeking to improve the efficiency of the goods and services tax system and to step up tax collections will be in focus at Tuesday’s GST Council meeting, according to a person informed about discussions between Central and state governments.

The proposals will seek to ensure that businesses and traders do not take excessive tax credits for long, the process of tax recovery in certain cases is strengthened and that GST registration process is tightened, the person said.

One of the proposals is to introduce a new rule to block businesses from filing monthly sales return forms if they fail to adequately explain or pay up the excessive tax credits availed by them.

This is computed as the difference between the tax credits available to the business as seen in an autogenerated statement in the GST system and what has been claimed by it in its monthly summary tax return form. The thinking is to set a 20% gap as the threshold for triggering a notice.

Another proposal before the Council is to reduce the time available to businesses to furnish bank account details after taking GST registration. Also, where bank details are not provided, or have not been verified by the bank in time, GST registration could be automatically suspended. The suspension would be revoked on compliance.

The changes in rules and procedures proposed seek to leverage the use of IT to step up compliance in a big way. With improved tax collections on account of streamlining the tax system and general economic recovery, Centre-state relations on the GST front too has normalized.

An email sent to the finance ministry and to the GST Council Secretariat on Monday seeking comments for the story remained unanswered.

The Council is also expected to consider measures to enhance tax compliance in the pan masala industry, bring more clarity on the taxation of multi-utility vehicles and finalize the rules on allowing states to require e-way bills for transportation of gold.

The Council is also expected to look into the issue of taxation of horse racing, online gaming and casinos but it is not clear yet if a final decision on this may come soon.