NEW DELHI: The Goods and Services Tax (GST) Council, chaired by Union Finance and Corporate Affairs Minister Nirmala Sitharaman, held its 57th meeting in New Delhi on 8 October 2026 and recommended a series of changes to India’s GST framework. The recommendations primarily concern tax administration, registration, return filing, refunds, input tax credit (ITC), dispute resolution, enforcement procedures and trade facilitation.
57th GST Council Meeting
GST Registration and Cancellation Procedures
The Council recommended changes to simplify the filing and processing of GST registration applications. A comprehensive circular is proposed to specify the documents and information required for registration, accompanied by frequently asked questions to clarify the application process.
Form GST REG-01 is proposed to be amended to include selectable options for prescribed documents and information. The GST portal is also proposed to provide clearer navigation, drop-down lists, tooltips and contextual guidance to help applicants furnish the required particulars.
The Council stated that these measures are intended to reduce registration application rejections and avoidable queries arising from incomplete or incorrect information.
Changes to the amendment of GST registration particulars were also recommended. Under the proposed amendment to Rule 19 of the CGST Rules, 2017, changes to registration details would generally be accepted automatically through the portal, except changes relating to the principal place of business. For taxpayers registered under Rule 14A, the proposed automatic acceptance would extend to changes relating to the principal place of business as well.
The Council further recommended simplifying registration cancellation. In the first phase, applications in Form GST REG-16 would be accepted automatically in specified cases once pending returns had been filed and outstanding dues paid. These cases include eligible taxpayers who have not passed on input tax credit exceeding ₹2.5 lakh in any month since registration and specified taxpayers who have passed on credit exceeding that amount in a month but filed the final return in Form GSTR-10 within the prescribed period.
In the second phase, automatic acceptance of cancellation applications would be extended to all cases after pending returns and dues had been cleared. The Council also recommended amendments providing for a system-based mechanism for cancellation and revocation of registration in specified cases involving non-filing of returns or non-furnishing of bank account details, followed by compliance within the prescribed period.
Simplified GST Registration for Small E-commerce Sellers
The Council recommended inserting Rule 14B into the CGST Rules, 2017, to establish a simplified registration mechanism for eligible small suppliers selling goods through electronic commerce operators (ECOs).
The proposed facility would cover qualifying suppliers making supplies through e-commerce platforms in states or Union Territories where they do not have a physical presence. One of the specified conditions is that the supplier should intend to pass on input tax credit not exceeding ₹2.5 lakh per month, excluding stock transfers between distinct persons.
Under the proposal, an eligible supplier could declare an e-commerce operator’s warehouse in the relevant state or Union Territory as its principal place of business, subject to the specified conditions. Registration would be granted automatically by the system in eligible cases.
The Council stated that the measure is intended to enable small sellers to expand their interstate business through e-commerce platforms without establishing a separate physical place of business in every state.
GST Return Filing and Input Tax Credit Reconciliation
The Council recommended changes to GST return filing to reduce mismatches between tax liabilities and input tax credit reported in different forms.
The proposals include enhancements to Forms GSTR-1, GSTR-1A and the Invoice Furnishing Facility to facilitate reconciliation with Form GSTR-3B. The Council also recommended introducing electronic statements for tax paid under the reverse charge mechanism and for input tax credit reversed and subsequently reclaimed.
Proposed amendments to the CGST Rules would provide mechanisms for correcting or rectifying tax liability and ITC in GSTR-3B so that the figures align with the relevant outward-supply details and the input tax credit reflected in Form GSTR-2B.
The Council also recommended amending Form GST DRC-03 to capture details of the underlying invoice against which payment has been made.
Changes to the Invoice Management System were proposed to allow recipients to accept, reject or keep specified inward-supply documents pending on the GST portal for the purpose of generating Form GSTR-2B, subject to prescribed conditions.
The Council recommended that the proposed alternate mechanism for amending tax liability and input tax credit in GST returns may be implemented from the return period of April 2027. It also recommended placing the proposed mechanism in the public domain for time-bound consultation, with the Union Finance Minister authorised to approve necessary modifications based on stakeholder feedback.
Faster and Automated GST Refunds
A phased system-based mechanism for processing and sanctioning specified GST refunds was recommended at the meeting.
During the first phase, refunds of excess balances in electronic cash ledgers would be sanctioned automatically without intervention by a tax officer. The time limit for issuing an acknowledgement or deficiency memo would be reduced from 15 days to 10 days. If neither document were issued by the proper officer within 10 days of the application, the system would provide for deemed acknowledgement.
For refund claims relating to zero-rated supplies and inverted duty structures, the Council recommended automatic provisional sanction of 90% of the amount claimed, based on the system’s identification and evaluation of risk.
Under the second phase, automated acknowledgement would be provided after system-based verification of refund applications. The Council also recommended automated sanction of full refunds relating to zero-rated supplies in acknowledged cases, after adjustment of pending dues, if any, and subject to system-based risk identification and evaluation.
Other proposals include modifying Form GST RFD-01 to capture information in a system-readable format and dispensing with the requirement to upload scanned documents for specified refund claims relating to zero-rated supplies and inverted duty structures.
The Council also recommended removing the restriction that caps the turnover of zero-rated supplies of goods, for refund-calculation purposes, at 1.5 times the value of like goods supplied domestically. Another proposed amendment would clarify that the ₹1,000 threshold under Section 54(14) of the CGST Act applies to the total refund amount under CGST, SGST/UTGST and IGST taken together.
To clarify interest payable on refunds of pre-deposits made for appeals, the Council recommended a standalone provision under Section 115 of the CGST Act and a circular addressing the applicable rate of interest.
Dispute Resolution and GST Penalty Proposals
The Council recommended comprehensive guidelines for tax officers concerning demand notices, adjudication orders and appeal orders. The proposed guidelines would address the quality and timely issuance of notices and orders, invocation of grounds involving fraud, wilful misstatement or suppression of facts on the merits of each case, and adherence to the principles of natural justice, including personal hearings.
The Council also recommended amendments to Sections 73, 74 and 74A of the CGST Act to introduce a minimum threshold of ₹10,000, comprising CGST, SGST, IGST and cess, for issuing show-cause notices. Under the proposal, notices would not be issued where the tax amount involved is below ₹10,000.
A related statutory provision was recommended for pending notices and appeals involving amounts below the proposed threshold, so they would be decided as though the threshold had been in force when the notices were issued.
For specified non-fraud cases, the Council recommended a reduced penalty of 5% where tax and interest are paid within 30 days under Section 73 or within 60 days under Section 74A from the date of the adjudication order. It also recommended removing the minimum penalty of ₹10,000 in non-fraud cases.
Another proposal concerns treating the penalty amount as a charge where the full tax amount, together with interest and penalty, is voluntarily paid within the prescribed period.
The maximum general penalty under Section 125 of the CGST Act is proposed to be reduced from ₹25,000 to ₹10,000.
For appeals involving only a penalty and no demand of tax, the Council recommended an upper limit of ₹40 crore on the pre-deposit payable before the Appellate Authority or the Appellate Tribunal, as applicable. The proposed cap comprises ₹20 crore under CGST and ₹20 crore under SGST/UTGST.
Proposed Withdrawal of GST Arrest Provisions
One of the principal recommendations concerns the enforcement provisions of the CGST Act, 2017. The Council recommended the complete withdrawal of arrest powers under GST through the omission of Section 69 of the Act.
The monetary threshold for prosecution is proposed to be raised from ₹1 crore to ₹5 crore.
Additional recommendations concern amendments to Section 132 of the CGST Act, including omission of specified offence provisions, narrowing the scope of the offence relating to fraudulent availment of ITC to cases involving the absence of goods or services or an invoice or bill, and rationalisation of punishments for various offences.
The recommendations form part of the Council’s proposed changes to the treatment of GST offences and enforcement procedures. Their implementation depends on the relevant legislative amendments.
Wider Input Tax Credit Refund Eligibility
The Council recommended amending Section 54(3) of the CGST Act and the relevant rules to permit refunds of accumulated ITC relating to capital goods in cases involving zero-rated supplies.
It also recommended allowing refunds of accumulated ITC relating to input services and capital goods in cases involving an inverted duty structure.
For inverted duty structure refunds, the proposed availability of ITC on input services would apply to credit availed on or after 1 November 2026. Refunds of ITC relating to capital goods under zero-rated supplies and inverted duty structure cases would be spread over 60 months and would be available for credit availed on or after 1 April 2027.
The Council also recommended changes to Section 17(5) of the CGST Act to remove restrictions on input tax credit for specified supplies. These include outdoor catering, health and life insurance, telecommunications towers, pipelines laid outside factory premises, free samples, and goods destroyed or written off on expiry of shelf life where required by law.
Changes to Export-Related GST Provisions
The Council recommended amendments to the Integrated Goods and Services Tax (IGST) Act, 2017, concerning the treatment of specified services as exports.
One proposal is to remove the condition that the supplier and recipient must not be establishments of a distinct person for the specified purpose of qualifying a supply as an export of services. The proposed change is intended to facilitate refunds for Indian service providers supplying services to or through foreign offices or branches.
The Council also recommended a circular clarifying the receipt of export payments in foreign exchange or in Indian rupees where permitted.
Another recommendation is to omit a specified clause concerning the place of supply where goods are physically made available by the recipient to the supplier. The place of supply in such cases would be determined under the default provision in Section 13(2) of the IGST Act, based on the location of the recipient of the services.
The Council further recommended an explanation under Section 16(1) of the IGST Act concerning specified goods supplied to overseas buyers but delivered in an SEZ or Free Trade Warehousing Zone. Subject to the stated conditions, including receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India, such supplies would be deemed to be supplies of goods to the SEZ or FTWZ for the relevant purpose.
E-way Bills and Interception of Goods in Transit
The Council recommended amendments to Sections 68, 129 and 130 of the CGST Act concerning the interception, inspection, detention and seizure of goods and conveyances in transit.
Under the proposal, a conveyance carrying goods could be intercepted only on the basis of specific intelligence and with authorisation from an officer not below the rank of Joint Commissioner.
Inspection and further action for detention or seizure would generally be permitted where either the supplier or the recipient is located or registered in the state where the interception takes place. The proposal provides that interception would not take place in transit states in such circumstances.
The Council also recommended that goods may be inspected, detained or seized irrespective of jurisdiction where no e-way bill has been generated or the conveyance does not carry a document establishing the origin or destination of the goods, as applicable.
In addition, the Council recommended that confiscation of goods or conveyances under Section 130 should not apply to goods or conveyances in transit.
Late-Fee Relief and Other Compliance Measures
The Council recommended a waiver of late fees for delayed returns filed under Section 39(1) of the CGST Act by taxpayers whose annual turnover in the preceding financial year did not exceed ₹5 crore, provided the delayed return is filed by the end of the month in which it was due.
It also recommended allowing taxpayers to file objections against the blocking of amounts in their electronic credit ledgers under Rule 86A of the CGST Rules. The proposed mechanism would provide an opportunity to object and obtain a personal hearing before the proper officer decides on the objection.
The Council recommended circulars clarifying issues relating to the Input Service Distributor mechanism, ITC availment by banking companies and financial institutions, including NBFCs opting for Section 17(4), payment of pre-deposits and eligibility for ITC on demonstration vehicles in specified circumstances. It also recommended that the omission of Rule 96(10) of the CGST Rules be effective from 23 October 2017, in accordance with the Supreme Court decision referred to in the official release.
An optional Annual Return Quarterly Payment (ARQP) scheme received in-principle approval through a concept note. The proposed scheme would cover taxpayers with aggregate turnover of up to ₹5 crore in the preceding financial year who are engaged exclusively in supplies to unregistered persons, commonly referred to as business-to-consumer (B2C) supplies.
Further proposals include aligning provisions concerning outward-supply statements, returns and the time limit for ITC availment; clarifying the liability of electronic commerce operators to pay GST on notified services under Section 9(5), irrespective of their business models; and introducing a validation clause for specified notices held invalid by courts because they covered multiple financial years.
The Council also recommended extending e-invoicing to specified domestic supplies received from unregistered persons where tax is payable under reverse charge and to imports of services for taxpayers with aggregate annual turnover of ₹5 crore or more.
GST Treatment of Specified Goods
The Council recommended clarifications and changes concerning the classification and GST treatment of various goods.
Sublimation paper is proposed to be classified under heading 4809, with past cases to be regularised on an “as is where is” basis.
The Council clarified that the relevant GST rate-schedule entries for toys cover other categories of toys under heading 9503 of the Customs Tariff Act, 1975, including dolls and puzzles, and are not limited to tricycles, scooters and pedal cars.
Seaweed-extract-based biostimulants registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985, are proposed to be classified under heading 3101 as fertilisers. Past cases relating to this clarification are to be regularised on an “as is where is” basis.
For second-hand vehicles supplied under the GST margin scheme, the Council clarified that eligible input tax credit may be availed on other inputs and input services, including spare parts, repair and maintenance, technology services, rent, marketing and advertising. The restriction on input tax credit under the scheme would continue to apply to tax paid on procured second-hand vehicles.
The Council also recommended bringing specified supplies of plastic waste and scrap, electrical and electronic waste and scrap, tyre waste and scrap, and used cooking oil under reverse charge where supplied by an unregistered person to a registered person, subject to the stated conditions. A 2% tax deduction at source was recommended for specified supplies of these materials between registered persons.
A NIL GST rate was recommended for psyllium seeds, commonly known as Isabgol, irrespective of whether they are fresh, chilled, frozen or dried. The Council also recommended aligning the GST treatment of retreaded tractor tyres with that of new tractor tyres.
The recommendations further include exemption concerning compensation cess not levied by the Canteen Stores Department on two-wheelers and four-wheelers for the period from 1 July 2017 to 30 September 2022, and by the Canteen Stores Department and Unit Run Canteens on aerated drinks for the period from 1 July 2017 to 31 March 2022.
GST Recommendations Relating to Services
The Council recommended several changes and clarifications concerning services.
For passenger transport and rental services of motor vehicles supplied with operators using electric vehicles, an option to pay GST at 5%, with restricted input tax credit, was recommended where the consideration includes the cost of battery charging.
For specified delivery services supplied through electronic commerce operators, the Council recommended a GST rate of 5% without input tax credit, subject to the conditions outlined in the release. The proposals also address delivery services relating to goods supplied or ordered through an ECO and the corresponding exemption for certain goods transportation services provided by goods transport agencies.
Clarification was recommended on the GST treatment of registration charges, road tax, insurance and FASTag charges incurred by a motor vehicle lessor and subsequently recovered from the lessee in connection with vehicle leasing.
The Council also recommended limited input tax credit in the same line of business for specified restaurant and outdoor catering services, hotel accommodation up to ₹7,500 per unit per day, and gym or fitness services, in a manner comparable to existing provisions for specified passenger transportation, tour operator and motor vehicle rental services.
Exemption was recommended for passenger transportation by helicopter on a seat-sharing basis to or from airports or helipads in the north-eastern states, Sikkim and Bagdogra in West Bengal. The Council also recommended exemption for services involving the storage or warehousing of seeds meant for sowing and agricultural support services involving coffee curing supplied by coffee curers to cultivators.
Other service-related recommendations include exemption for specified services provided by the Seamen’s Provident Fund Organisation, a self-certification mechanism for determining eligibility for exemption for research and development services, and exemption for specified imports of services by Indian establishments of foreign shipping companies when received without consideration from related persons or overseas establishments.
For highway projects under the Toll-Operate-Transfer model, the Council recommended exemption for the grant of exclusive rights, licences and authority to concessionaires to demand, collect and appropriate toll fees. It also recommended a special procedure for determining the valuation and time of payment of GST on operation and maintenance services provided by concessionaires to the concessioning authority.
The Council further recommended clarifying that the notional amount treated as interest in the books of banks for notional transfer of funds between branches by the head office as part of fund transfer pricing transactions is covered by the definition of interest in the specified GST exemption notification.
Implementation of the Recommendations
The 57th GST Council meeting addressed a broad range of issues relating to tax administration, refunds, input tax credit, enforcement, appeals, interstate movement of goods and the GST treatment of specified goods and services.
The Ministry of Finance stated that the recommendations would be given effect through the relevant circulars, notifications and legislative amendments. Accordingly, the recommendations do not, by themselves, bring every proposed change into force. The applicable legal provisions and implementation dates will depend on the instruments issued for the respective measures.
Official source: Press Information Bureau, Ministry of Finance, “Recommendations of the 57th Meeting of the GST Council,” published on 8 October 2026.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2320934&lang=1®=48
Disclaimer: This report is based on the official Press Information Bureau release dated 8 October 2026 and is published for general information. The recommendations remain subject to the applicable notifications, circulars and legislative amendments. DailyBusinessNews.in presents information from reported and official sources and does not intend to make allegations against any person or entity. The report should not be construed as a legal or tax opinion or as a guarantee of any particular legal or commercial outcome. The applicable official legal instruments shall prevail.