The 57th meeting of the Goods and Services Tax Council convened on 8 October 2026 in New Delhi, with Union Finance Minister Nirmala Sitharaman presiding over proceedings.
Building on the rate rationalisation agenda set out at the 56th GST Council meeting, the 57th session addressed a broader administrative overhaul covering compliance obligations, dispute resolution, the processing of input tax credits and refunds, and the overall framework of tax administration for businesses and individual taxpayers.
Topics addressed in the recommendations include GST registration procedures, the filing of returns, refund processes, penalty frameworks, prosecution guidelines, the movement of goods, export arrangements for services, and the tax treatment of particular goods and services. The central aims driving these steps include reducing procedural hurdles, trimming unnecessary notices, strengthening cash flow positions, and clarifying how GST law is interpreted in practice.
Those provisions are to take effect through a combination of formal notifications, administrative circulars, and changes to the relevant legislation, flowing from GST Council advice. The recommendations carry no binding legal weight until the relevant formal instruments have entered into force.
A circular detailing the documentation and data required for GST registration is to be issued following a Council recommendation, with accompanying FAQs to guide applicants through the process. Dropdown menus tied to required documentation will appear within the registration form for applicants to make their selections.
Most updates to registration details proceed through the GST portal without manual review, though changes tied to a taxpayer's Primary Place of Business fall outside that automated pathway. Two rollout stages have been put forward for the automatic cancellation of registration — the first targeting taxpayers who meet defined input tax credit and return-filing thresholds, while the second would extend automatic cancellation to cover all remaining applicants once their outstanding returns are lodged and any unpaid dues are cleared.
Under the proposed framework, small vendors without a physical presence in a given State or Union Territory would gain access to a streamlined enrolment pathway when supplying goods through Electronic Commerce Operators.
Proposed adjustments to Forms GSTR-1, GSTR-1A, and the Invoice Furnishing Facility would bring those filings into closer alignment with GSTR-3B, while a separate provision under Rule 61 would give taxpayers a pathway to correct errors in their declared tax liability. Under the proposed framework, a digital filing covering tax remitted on a reverse-charge basis alongside any input tax credits drawn against it would be required from registered entities. Under Rule 86C, a new digital filing form is being drafted to allow taxpayers to document both the reversal of input tax credits and any subsequent reclaims.
Under the proposed Invoice Management System, businesses receiving inward supply documents would have three available actions: approving them, returning them, or holding them in a pending state. Under the proposed timeline, the revised process for adjusting tax liability and input tax credit disclosures would take effect beginning with the April 2027 filing period.
Qualifying excess balances held in the electronic cash ledger would receive full refunds through an automated system process under the proposed framework. A proposal on the table would reduce the window for sending an acknowledgement or deficiency memo from 15 days to 10.
Under the proposed framework, nine-tenths of any amount filed under zero-rated supply claims or inverted duty structure requests would be released on a provisional basis through automated processing. Under a planned second phase, qualifying refunds tied to zero-rated supplies would move through an automated review and, where approved, receive machine-processed payment without manual intervention.
Under the proposed changes, Form GST RFD-01 would be restructured to hold refund data in a machine-readable format, while physical scanned documents would no longer be required for certain filing categories. A cap under Rule 89(4)(C) that tied zero-rated goods exports to 1.5 times the value of domestically supplied like goods is proposed to be lifted.
A proposed change to Section 54(14) of the CGST Act would make explicit that the Rs 1,000 minimum refund threshold operates against the combined total spanning CGST, SGST/UTGST, and IGST rather than each levy in isolation. Taxpayers operating under an inverted duty structure would be able to claim refunds on accumulated input tax credit tied to input services only where that credit was taken on or after 1 November 2026.
Under the proposed framework, input tax credit accumulated on capital goods would become eligible for refund — covering both zero-rated supplies and inverted-duty-structure situations — only where that credit was taken up from 1 April 2027 onward, with disbursement stretched across a 60-month window.
Notices under Sections 73, 74, and 74A would only be triggered once a monetary claim crosses the Rs 10,000 floor, according to the proposal put forward. Where tax liabilities and accrued interest are settled within the timeframe set out following an adjudication order, a lower penalty rate of 5% applies to matters falling outside fraud.
Under the draft changes, the floor penalty of Rs 10,000 that currently applies in non-fraud matters would be lifted. A proposal to lower the ceiling penalty under Section 125 of the CGST Act — currently set at Rs 25,000 — to Rs 10,000 has been put forward. A ceiling of Rs 40 crore has been put forward as the maximum pre-deposit amount applicable to appeals involving penalties alone.
A proposal to delete Section 69 of the CGST Act, 2017 forms the basis of the Council's call for arrest powers to be removed entirely from the legislation. A proposal to raise the floor for criminal prosecution from Rs 1 crore to Rs 5 crore has been put forward by the Council. A proposal to streamline the list of offences covered under Section 132 of the CGST Act has also been put forward.
The Council's recommendations include a proposal to ease input tax credit restrictions spanning multiple product and service categories — outdoor catering, health and life insurance, telecom towers, pipelines running outside factory premises, complimentary samples, and goods written off or disposed of once their legally mandated shelf life runs out.
Regarding cross-border services exports, the GST Council put forward a proposal to remove the requirement — operative under Section 2(6) of the IGST Act — that a supplier and its recipient cannot be treated as establishments belonging to the same distinct person, provided certain defined circumstances are met. Under a legislative proposal affecting the IGST Act, the provision contained in clause (a) of Section 13(3) would be removed in cases where the recipient of a service hands over goods physically to the supplier for processing.
A clarification to Section 16(1) of the IGST Act has been put forward to cover goods dispatched to buyers located abroad through Special Economic Zones or Free Trade Warehousing Zones, where settlement occurs in convertible foreign exchange or authorised Indian rupees.
Under the proposed framework, stopping a vehicle carrying goods under e-way bill cover would require both a specific intelligence input and written authorisation from an officer holding at least Joint Commissioner rank. Detention or seizure measures, along with any accompanying inspection procedures, are put forward for consideration only in cases where the party supplying or receiving the goods holds a location or registration within the intercepting jurisdiction. Goods or conveyances moving through in transit would be carved out from the confiscation powers that Section 130 otherwise grants.
Under the proposed amendment to Rule 86A, taxpayers whose electronic credit ledger has been blocked would gain the right to formally contest that action and put their case before the relevant officer ahead of any final determination.
Businesses with yearly revenue not exceeding Rs 5 crore stand to have outstanding late fees dropped, provided any overdue return reaches the authorities before the close of the calendar month in which the filing deadline originally fell. A proposal covering taxpayers whose annual turnover falls at or below Rs 5 crore and who deal solely with unregistered buyers has received preliminary backing — specifically, a concept note outlining a voluntary scheme under which annual returns could be filed alongside quarterly tax payments.
Among the goods-related rulings, sublimation paper falls under heading 4809, dolls and puzzles gain coverage beneath the toy rate entries at heading 9503, seaweed-extract-based bio-stimulants meeting the qualifying threshold are treated as fertilisers under heading 3101, psyllium seeds attract a nil GST rate, and retreaded tractor tyres receive the same tax treatment as new ones. Under the margin scheme, used-vehicle traders face an input tax credit block that covers only the tax component embedded in the cost of procured stock, while credits tied to other purchases and services remain accessible.
Two tax-handling proposals covering designated waste and scrap dealings — a reverse charge arrangement alongside a 2% deduction at source — have been put forward for adoption.
Among the proposals touching on services, a 5% GST levy — applied without input tax credit eligibility — would cover qualifying electric vehicle-based passenger transport and rental operations alongside certain delivery activities carried out through e-commerce platforms. Separately, full GST exemptions are put forward for helicopter seat-sharing arrangements in designated areas, the warehousing of seeds intended for sowing, agricultural support work performed by coffee curers, and activities conducted by the Seamen's Provident Fund Organisation.
A proposal put forward by the Council would revise Schedule II of the CGST Act so that any transfer of intellectual property rights — covering both short-term arrangements and outright conveyances of title — falls consistently within the category of services supply.
