At its meeting on 8 October 2026, the GST Council recommended several significant changes aimed at speeding up refunds, widening access to input tax credit (ITC), and easing penal provisions across key areas.<\/p>\n\n\n\n
Important note:<\/strong> These are recommendations approved by the Council, not existing statutory law. Current rules remain in force until relevant statutory amendments, Central Tax notifications, and portal updates are formally notified.<\/em><\/p>\n\n\n\n The proposed refund framework offers meaningful operational relief, particularly to exporters and manufacturing units that consistently accumulate unutilized tax credits.<\/p>\n\n\n\n A 90% provisional refund is already available for export claims, and the CBIC extended this mechanism to inverted duty structure claims via instruction effective 1 October 2025. The Council now recommends transitioning to an automated, system-driven release based on<\/p>\n\n\n\n automated risk checks, bypassing manual officer review for initial sanction. Additionally, the<\/p>\n\n\n\n Council has proposed automated refunds for excess cash ledger balances and shortening the timeline for issuing acknowledgements or deficiency memos from 15 days to 10 days.<\/p>\n\n\n\n If notified as proposed, working capital cycles should improve as eligible funds will remain blocked for a considerably shorter duration. The practical advantage, however, will rest heavily on how finely the backend automated risk filters are calibrated.<\/p>\n\n\n\n The Council has moved toward addressing longstanding trade representations by broadening the classes of ITC eligible for refund claims under specific routes.<\/p>\n\n\n\n For inverted duty refund cases, ITC availed on input services on or after 1 November 2026 would now qualify for refund. Further, from 1 April 2027, ITC availed on capital goods would also become refundable in specified export and inverted duty scenarios, apportioned over a 60-month payout schedule.<\/p>\n\n\n\n In parallel, the Council proposed easing statutory ITC restrictions on specified employee insurance, catering expenses, and certain business assets. The detailed criteria and conditions will need to be evaluated once the amending statutory notifications are released.<\/p>\n\n\n\n Entities with an aggregate annual turnover of \u20b95 crore or more may soon be required to generate e-invoices for imported services and specified reverse charge procurements from unregistered suppliers.<\/p>\n\n\n\n While this introduces an extra compliance routine, it should offer the practical upside of streamlining GSTR-2B matching and supporting ITC claims against reverse-charge tax payments. The actual day-to-day administrative impact will depend on how the portal validates these self-generated e-invoices and integrates them into periodic returns.<\/p>\n\n\n\n Continuing the policy push toward ease of doing business, the Council recommended raising the minimum monetary threshold for launching prosecution from \u20b91 crore to \u20b95 crore, removing arrest provisions, and scaling down the general maximum penalty from \u20b925,000 to \u20b910,000.<\/p>\n\n\n\n These proposals require legislative amendments to the CGST and SGST Acts before becoming operational.<\/p>\n\n\n\n While awaiting statutory implementation, finance and tax teams can take several practical steps:<\/p>\n\n\n\n At its meeting on 8 October 2026, the GST Council recommended several significant changes aimed at speeding up refunds, widening access to input tax credit (ITC), and easing penal provisions across key areas. Important...<\/p>\n","protected":false},"author":1,"featured_media":202,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[95],"tags":[18,96],"class_list":["post-201","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-october-2026-gst-proposals","tag-enm-global","tag-october-2026-gst-proposals"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.enmglobal.com\/blog\/wp-content\/uploads\/2026\/10\/GST-Proposals_-Mostly-Good-News.png?fit=1774%2C887&ssl=1","_links":{"self":[{"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/posts\/201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/comments?post=201"}],"version-history":[{"count":1,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/posts\/201\/revisions"}],"predecessor-version":[{"id":203,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/posts\/201\/revisions\/203"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/media\/202"}],"wp:attachment":[{"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/media?parent=201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/categories?post=201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enmglobal.com\/blog\/wp-json\/wp\/v2\/tags?post=201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}1.\u00a0 Faster GST Refunds<\/h2>\n\n\n\n
2.\u00a0 Broader Credit Base Eligible for Refund<\/h2>\n\n\n\n
3.\u00a0 Reverse Charge Mechanism: Proposed E-Invoicing<\/h2>\n\n\n\n
4.\u00a0 Decriminalization and Rationalized Penalties<\/h2>\n\n\n\n
What Businesses Can Do Now<\/h2>\n\n\n\n
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