The 57th GST Council met on 8 October 2026. Unlike the 2025 meeting, which rationalised rates, this one targeted procedure: refunds, registration, ITC distribution, notices and a few long-running disputes. Between 26 and 28 October 2026 the Government issued the notifications and circulars to give effect to it. Most changes apply from 1 November 2026; some kick in later.
This guide groups the changes by business impact, explains each in plain language, and gives a short example where it helps. Section 12 lists points where we checked the source notifications and found the commonly circulated summaries incomplete or loosely worded.
Key dates at a glance
From
What starts
1 Nov 2026
Most rate, exemption, RCM and scrap-TDS changes; Finance Act 2026 changes on discounts, credit notes and refunds; faster refund process; new refund formula for input services; new registration rules (Rules 14B, 19, 20, 21); ISD changes
1 Dec 2026
New refund application (RFD-01) and supporting documents; revised cancellation application REG-16, with ITC reversal reported in it (Rule 44); online change of principal place of business for Rule 14A registrants
1 Jan 2027
E-invoice for RCM self-invoices and import of services; GSTR-7A with invoice-wise TDS details
1 Apr 2027
Rule 86A credit-blocking by formal order (DRC-26/27/28); automatic suspension, deemed cancellation and system revocation of registration; forms for back-dating a cancellation (REG-34 to REG-37); capital goods ITC counted in refunds
1. Rate and exemption changes on goods
Item
Change
Source
Retreaded tractor tyres (4012)
18% → 5%, now in line with new tractor tyres. Other retreaded or used tyres, treads and flaps remain at 18%.
Notfn 02/2026-CT(R)
Seaweed-extract bio-stimulants (registered under Sch. VI of the Fertiliser Control Order, 1985)
Expressly covered by the 5% fertiliser entry (S. No. 237). Past disputes closed on an “as is where is” basis.
Notfn 02/2026-CT(R); Circular 265
Psyllium seeds / Isabgol (1211 90 13)
Now exempt.
Notfn 03/2026-CT(R)
“Nominated agency” under Notfn 26/2018-CT(R) (supply of precious metals by nominated agencies for exports)
Now means agencies listed in Appendix 4B of the DGFT Handbook of Procedures, as amended from time to time.
Notfn 05/2026-CT(R)
Sublimation (transfer) paper
Classified under 4809 at 18%. Past period regularised “as is where is”.
Circular 265
Toys (heading 9503)
The toy rate entries cover all toys of 9503 (dolls, scale models, puzzles etc.), not only tricycles, scooters and pedal cars. As reported, 5% applies to non-electronic and 18% to electronic toys.
Circular 265
Example A retreader in Rajkot invoices a farmer ₹10,000 for a retreaded tractor tyre on 3 Nov 2026. GST is now ₹500 (5%), not ₹1,800. A retreaded truck tyre on the same day still carries 18%, so the item master must separate the two.
Watch out Jewellery exporters buying gold, silver or platinum from nominated agencies should check that the supplier is on the current Appendix 4B list before accepting a concessional-rate invoice.
2. Services: rates, ITC and new exemptions
2.1 Same-line ITC now allowed for 5% hospitality services
These services are taxed at 5% without ITC. General ITC stays blocked, but credit on a same-line purchase from another supplier is now allowed:
5% service
Same-line ITC now allowed on
Cap
Hotel accommodation (tariff up to ₹7,500 per unit per day)
Rooms bought from another hotel
Yes: credit limited to 5% of value (2.5% CGST + 2.5% SGST)
Restaurant service (other than at specified premises)
Restaurant service bought from another restaurant
No cap (supplier also charges 5%)
Food and drink supplied in trains or at platforms
Inputs and input services bought from Indian Railways, IRCTC or their licensees
No cap
Outdoor catering (including catering with renting of premises)
Catering bought from another outdoor caterer
Yes: credit limited to 5% of value
Example Hotel A (₹6,000 rooms, 5%) is overbooked and buys rooms from Hotel B for ₹20,000 + 18% GST = ₹3,600. Hotel A can take ITC of only ₹1,000 (5% of ₹20,000). The balance ₹2,600 is a cost. Caterer A takes a ₹1,00,000 wedding order at 5% and sub-contracts ₹60,000 of it to Caterer B, who charges 18% (₹10,800). A can claim ₹3,000 (5% of ₹60,000).
2.2 Electric vehicles: passenger transport and renting
New entries for passenger transport by EV, and renting of EVs for passengers or goods, where battery charging cost is included in the price. The supplier can choose 5% with restricted ITC (same-line services only, capped at 5%) or 18% with full ITC. Earlier, the 5% option was available only where “fuel” cost was included, which did not cover EVs. “Electrically operated vehicle” means a road vehicle running solely on electricity and includes e-bicycles. As reported from the Council FAQs, renting an EV without an operator is a supply of goods and stays at the vehicle’s rate.
Example An EV cab operator charges a corporate ₹1,000 for an airport trip at 5% (₹50). It sub-hires an EV with driver from another operator for ₹800, who charges 18% (₹144). The cab operator can claim only ₹40 (5% of ₹800). If it owns a large fleet with heavy ITC on vehicles and charging, the 18% option may work out better: compare before choosing.
2.3 Delivery services linked to e-commerce
Delivery services (other than postal and courier) now attract 5% without ITC, down from 18% with ITC, in two cases: (a) delivery supplied through an e-commerce operator by a person not liable to register; and (b) delivery of goods sold through an e-commerce operator. In case (a) the operator pays the tax u/s 9(5); this replaces the earlier 9(5) entry, which covered only “local delivery”. Postal, courier and other delivery services stay at 18%.
Example A quick-commerce app charges a customer ₹30 as delivery fee for a rider who is not registered. From 1 Nov 2026 the app pays ₹1.50 (5%) on it and cannot take ITC against it. If the rider is liable to register under s.22(1), the rider pays the tax instead. A registered logistics company delivering goods sold on a marketplace also charges 5% and cannot take ITC on the costs of that delivery.
2.4 Other service changes
GTA definition: any person who provides a service in relation to transport of goods by road and issues a consignment note. The earlier carve-out for e-commerce operators doing local delivery is removed. The GTA exemption (entry 21A) does not apply where the goods are supplied through an e-commerce operator.
Lottery: the old deemed-value paragraph in the rate notification is deleted; value is governed by Rule 31A(2) alone. No change in tax.
Toll-Operate-Transfer (TOT) road concessionaires: GST on operation and maintenance services to the authority is paid on the amount debited to the escrow account, in the tax period of the debit (special procedure u/s 148, Notfn 10/2026-CT(R)).
Vehicle leasing: road tax, registration, insurance, FASTag and similar charges recovered by a lessor are part of the lease value and taxed at the lease rate (Circular 266).
2.5 New exemptions (Notfn 07/2026-CT(R), 07/2026-IT(R))
Service
Exemption
Helicopter travel on seat-share basis
Flights starting or ending at an airport/helipad in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, or Bagdogra (WB)
Storage / warehousing
Extended to cereals, pulses, fruits, vegetables and seeds for sowing; “seed” widely defined (tubers, cuttings, grafts, tissue-culture plantlets etc.)
Seamen’s Provident Fund Organisation
Services to members under the Seamen’s Provident Fund Act, 1966
Grant of toll-collection rights by Government / local authority
Exempt (covers upfront TOT concession fee)
Curing of coffee for coffee growers
Exempt (“curing” as per Coffee Act, 1942)
Indian branch of a foreign shipping company importing services from a related party / own overseas office without consideration
Exempt from 1 Nov 2026; tax position for 1 Jul 2017 – 31 Oct 2026 regularised “as is where is” (Circular 266)
2.6 RCM on renting of cars to companies (Notfn 08/2026-CT(R))
Where a non-corporate supplier rents a passenger vehicle (fuel included) to a body corporate, RCM applies unless the supplier charges full-rate tax on its invoice. No rate changes. That test, in S. No. 15 of Notfn 13/2017-CT(R), referred to 6% CGST (old 12% rate) even after the rate became 18% from 22 Sep 2025 (Notfn 15/2025-CT(R) dated 17 Sep 2025). Notfn 08/2026-CT(R) dated 27 Oct 2026 now changes it to 9% CGST from 1 Nov 2026; Notfn 08/2026-IT(R) makes the same change for IGST.
Example A partnership firm rents cabs to a private limited company and charges 18% GST with full ITC. From 1 Nov 2026 the company clearly has no RCM liability. If the firm does not charge 18% on its invoice, the company pays GST under RCM.
3. Waste and scrap: RCM, registration and TDS
Four items join metal scrap (already covered since October 2024) under a three-layer control: used cooking oil (1518), plastic waste and scrap (3915), tyre waste and scrap (4004) and e-waste (8549).
Situation
Treatment from 1 Nov 2026
Source
Unregistered seller → registered buyer
Buyer pays GST under reverse charge
Notfn 04/2026-CT(R)
Seller registration
Sellers can no longer use the s.23(2) exemption for suppliers whose entire output is under RCM; the normal registration rules (including the s.22 threshold) apply
Notfn 06/2026-CT
Registered seller → registered buyer
Buyer deducts 2% GST TDS u/s 51 (also for metal scrap), takes a TDS registration and files GSTR-7
Notfn 07/2026-CT
Example A biodiesel unit in Surat buys used cooking oil: (a) from a small unregistered dhaba – it pays GST under RCM and self-invoices; (b) from a registered hotel chain under a ₹6 lakh annual contract – it pays the hotel’s invoice, deducts 2% TDS on the taxable value (₹12,000 on ₹6 lakh), deposits it and issues the TDS certificate.
Watch out Section 51 TDS applies where the value under a contract exceeds ₹2.5 lakh. Restaurants, hotels and electronics businesses selling these items should expect TDS credit in their cash ledger and reconcile it with GSTR-7A.
4. CGST Act amendments in force (Finance Act 2026)
Sections 153–155 of the Finance Act 2026 were brought into force from 1 Nov 2026 (Notfn 03/2026-CT).
Post-sale discounts (s.15(3)(b)): no longer need a prior agreement or link to specific invoices to be excluded from value. Two conditions remain: the supplier issues a credit note, and the recipient reverses the ITC attributable to the discount, as per s.34.
Credit notes (s.34(1)): a post-sale discount is now an express ground for issuing a credit note.
90% provisional refund (s.54(6)): now has statutory backing for inverted duty refunds (it was being granted administratively from 1 Oct 2025).
Small export refunds (s.54(14)): the ₹1,000 minimum no longer applies to refund of tax paid on goods exported with payment of tax.
Example A paint company announces in March a 3% rebate to dealers who crossed their annual target. Nothing was agreed at the time of sale. Earlier, the rebate could not reduce taxable value; it was treated as a commercial credit note. From 1 Nov 2026 the company can issue GST credit notes and reduce its output tax, provided each dealer reverses the matching ITC.
5. Refunds: faster process, wider formula
5.1 Process and timelines
Step
Old
New
Acknowledgement or deficiency memo
15 days
10 days; if the officer does nothing, the claim is deemed acknowledged
Provisional refund order (RFD-04)
Issued by officer
System-generated within 3 working days of acknowledgement, on risk evaluation
Payment order (RFD-05)
Officer
Available on portal
Adjustment against dues
By officer
RFD-06 shows amount adjusted against outstanding demand and balance payable (new Rule 92(1B))
Filing route
Portal or Facilitation Centre
Portal only
Debit of credit ledger (Rule 89(3))
No order of heads
IGST first; then CGST and SGST equally; shortfall from the other ledger
5.2 Inverted duty refund now includes input services and capital goods
Net ITC in the Rule 89(5) formula now includes ITC on input services availed on or after 1 Nov 2026 and, from 1 Apr 2027, capital goods ITC at 1/60th per month (within 60 months from the month of availment, net of reversals). The formula itself is unchanged: (inverted turnover × Net ITC ÷ adjusted total turnover) – tax payable on inverted supplies.
Textile processor, one month (₹ lakh)
Old formula
New formula
Inverted-rated turnover / Adjusted total turnover
100 / 100
100 / 100
ITC on inputs (yarn, dyes)
10.0
10.0
ITC on input services (job work, freight) availed after 1 Nov 2026
excluded
2.0
Net ITC
10.0
12.0
Less: output tax on inverted supplies
(5.0)
(5.0)
Maximum refund
5.0
7.0
Watch out This is prospective. Claims for periods before 1 Nov 2026 stay on the old formula (upheld by the Supreme Court in VKC Footsteps, 2021). Keep services ITC availed after 31 Oct 2026 separately identifiable in the books.
5.3 Export (zero-rated) refunds
The cap of 1.5 times the value of like domestic goods in Rule 89(4)(C) is removed from 1 Nov 2026.
Capital goods ITC (1/60th method) counts in Net ITC from 1 Apr 2027.
ISD transfer invoices under Rule 54(1A) are not turnover and the credit transferred is not Net ITC of the issuer (Circular 260).
5.4 New documents with refund claims (from 1 Dec 2026)
Invoice-wise details of inward supplies and ITC, and of outward supplies, replacing “number and date” listings.
Suppliers to merchant exporters at 0.1% (Notfn 40/2017 & 41/2017): invoice-wise details matched with shipping bills.
Declaration that the applicant has not been prosecuted for an offence involving tax evasion above ₹250 lakh in the preceding five years (ITC refunds and exports with payment).
From 1 Apr 2027: declaration that capital goods in the claim are still held, eligible and used for the relevant supplies.
RFD-01 redesigned, with new grounds (refund to unregistered persons, electricity exports, extra IGST on upward revision after export).
5.5 Rule 96(10) demands on exporters (Circular 264)
The Supreme Court held on 6 Aug 2026 (Goodluck India) that omission of Rule 96(10) without a saving clause wipes out pending proceedings. CBIC has accepted this: the omission is treated as effective from 23 Oct 2017, and pending matters must be decided accordingly. Same for Rules 89(4A) and 89(4B).
Example An exporter imported inputs under Advance Authorisation in 2020 and took IGST refund on exports. A 2023 SCN seeking recovery is pending before the appellate authority. The exporter should file a short submission citing Circular 264 and the judgment. A matter already concluded and not under appeal is not reopened by the circular.
5.6 Export proceeds (Circular 263)
Service exports paid into repatriable INR accounts (SNRR, INR Nostro, Special Rupee Vostro) satisfy the receipt condition in s.2(6)(iv) of the IGST Act.
Stockbrokers: receipts from overseas clients through SNRR or NRE accounts qualify; payments from NRO accounts must be routed through such a repatriable account.
Reinsurance brokers: commission retained under the net-retention mechanism, as permitted by FEMA, qualifies.
Set-off of export receivables against import payables per RBI directions counts as receipt. From 1 Oct 2026 (new FEMA export-import regulations) the goods-against-goods / services-against-services restriction no longer applies.
No recovery of export refund under Rule 96B to the extent the AD bank has written off realisation.
5.7 Pre-deposit for appeals (Circular 259)
Admitted tax is paid in full; 10% pre-deposit is on the disputed tax only (taxpayer declares the split in APL-01 / APL-05).
Refund of pre-deposit does not need an express direction in the appellate order: file RFD-01 “on account of order”.
Refund cannot be withheld because the Department plans to appeal or has appealed, unless there is a stay.
Interest runs from each actual deposit date; on partial remand, the upheld portion is adjusted first.
Example Demand ₹22 lakh: taxpayer admits ₹2 lakh and disputes ₹20 lakh. Pay ₹2 lakh + ₹2 lakh (10% of ₹20 lakh) to file the first appeal. If the appeal succeeds, claim the ₹2 lakh pre-deposit with interest even if the Department says it will appeal to GSTAT.
6. Registration
6.1 Applying for registration (Circular 257)
A prescribed document list is now attached to REG-01. Officers may raise queries only through REG-03 and only on the listed documents.
Officers must not ask for Udyam certificates (not valid as address proof either), residential address of directors in another city, or object that business cannot be run from a residence. Utility bills are checked only for name and address.
Premises owned by a relative, partner or director: choose “consent”, “rented” or “shared” – not “owned”. Formats are given for consent letter, inherited property affidavit and a no-rent-agreement undertaking. Co-working spaces need the membership agreement plus the provider’s title/lease.
SEZ units need a separate registration. Telecom towers and ATMs need not be declared as places of business. Up to 10 bank accounts can be added.
Delays or irrelevant queries can be escalated to the jurisdictional Chief Commissioner / Commissioner on a designated email.
Example A new proprietor runs her business from her father’s flat. She selects “Consent”, uploads the consent letter in the prescribed format and her father’s latest electricity bill. If the officer asks for Udyam or a commercial electricity connection, she replies citing Circular 257.
6.2 Rule changes
Rule
What changes
From
14B (new)
Sellers on e-commerce platforms can register in another State using the platform’s warehouse as place of business; conditions include a home-State regular registration, output tax to registered buyers up to ₹2.5 lakh/month, platform consent within 7 working days, Aadhaar authentication, one registration per State per PAN
1 Nov 2026
19
Principal place of business changes: deemed approved if officer does not act in 15 days (7 working days after clarification). Changes in legal name and partners/directors etc. are validated online without officer approval and apply to all GSTINs on the PAN. Rule 14A registrants can also change their principal place of business online
1 Nov 2026; PPoB for 14A: 1 Dec 2026
20
Cancellation on request is system-based (REG-38). Category 1: all returns filed, dues paid and output tax to registered buyers never above ₹2.5 lakh in a month. Others (Category 2) must also file GSTR-10. An officer may later back-date the cancellation only through REG-34 (notice) to REG-37 (order)
Rule: 1 Nov 2026; REG-34 to 37: 1 Apr 2027
21
Grounds for cancellation narrowed to objective defaults: composition annual return 3 months late; 6 months of monthly returns or 2 quarterly returns not filed; breach of the provisos to Rule 23(1); bank account (Rule 10A) not furnished
1 Nov 2026
21A, 22, 23A
Portal suspends for return defaults (REG-31, 30 days to comply), then deemed cancellation (REG-38); revocation by system on filing returns within 180 days. Suspension for GSTR-1 vs 3B mismatch removed
1 Apr 2027
44 / REG-16
ITC payable on cancellation reported in REG-16 at the time of applying (not only later in GSTR-10); REG-16 revised with rationalised reasons, clear effective date and a NIL-return option for the gap period
1 Dec 2026
83C (new)
GST Practitioners amend enrolment details through REG-14
1 Nov 2026
7. ITC and Input Service Distributor (ISD)
7.1 ISD (Rules 39, 54 and Circular 260)
ISD can distribute IGST credit as IGST or CGST. The “common services” condition is removed: an RCM service used by only one branch can now be routed through ISD.
More than one ISD registration in a State is allowed for separate verticals. Credit goes only to the GSTIN to which it is attributable.
Recipients, not the ISD, must meet s.16/17 conditions and make Rule 42/43 and s.17(4) reversals. The ISD distributes the full credit.
Credit in GSTR-6A is “available” once the ISD finds it prima facie eligible; distribute in that month, eligible and ineligible separately.
Wrong distribution: penalty u/s 122(1)(ix) (higher of ₹10,000 or the amount) and recovery from recipients with interest.
Example A Surat company’s Gujarat GSTIN pays RCM on legal fees for a dispute concerning only its Mumbai branch. It issues a Rule 54(1A) invoice to its Gujarat ISD, which distributes the credit to the Maharashtra GSTIN. The Rule 54(1A) invoice value stays out of Gujarat’s turnover for refund and reversal calculations.
7.2 Other ITC clarifications
Demo vehicles (Circular 262): ITC is allowed to dealers even in the dealer-agency model where the manufacturer sells directly; para 4.6 of Circular 231/2024 is withdrawn.
Used-car dealers under margin scheme (Circular 265): only tax on the used vehicles bought is blocked; ITC on spares, repairs, rent, software, marketing etc. is available.
Banks and NBFCs on 50% ITC option (Circular 261): option must be uniform across lending registrations of the entity; bullion-only GSTINs are outside it; full credit on supplies from same-PAN units only if they too follow s.17(4). Past reporting differences not to be questioned if total ITC is correct.
Rule 86A (from 1 Apr 2027): credit blocking by “proper officer” through a formal order (DRC-26), valid up to one year; taxpayer can object (DRC-27) and get a reasoned order after hearing (DRC-28).
8. Returns, e-invoice and e-way bill
E-invoice from 1 Jan 2027 also for (i) self-invoices on purchases from unregistered persons under RCM and (ii) import of services. Applies only to businesses already in e-invoicing (AATO above ₹5 crore); the threshold is unchanged.
Example A ₹40 crore company pays an unregistered advocate ₹50,000 (RCM) and a US firm for a software subscription. From January 2027 both self-invoices need an IRN. ERP/e-invoice setup must support the new supply types.
GSTR-4 on withdrawal from composition: due 30 June after the year end, same as the regular annual GSTR-4.
GSTR-7A (TDS certificate): invoice-wise details from 1 Jan 2027.
CMP-08: separate reporting of supplies made through e-commerce operators who pay tax u/s 9(5).
GSTR-9 / 9C: the optional reporting relaxations in instructions are extended to FY 2025-26.
E-way bill: goods moved by metro rail are exempt, like railways.
9. Clarifications for specific sectors (Circular 266)
Issue
Position
R&D vs consultancy (grant-funded research by notified institutions)
A certificate from the head of the institution that the activity is R&D, not consultancy, may suffice for exemption entry 44A
Banks: notional interest under Fund Transfer Pricing
Treated as “interest” and exempt
NBFC services to banks under co-lending
Taxable; value is as per the contract between NBFC and bank
TRAI
Not “Government” under s.2(53), being a separate statutory body; entries that depend on the supplier or recipient being “Government” do not apply to it
CBIC has set standards for its own officers. Use these as a checklist when replying to a notice or challenging an order:
Intimation in DRC-01A Part A before SCN, wherever feasible.
SCN must set out facts, evidence relied on, provisions, and a year-wise computation. Defects from non-application of mind cannot be cured later.
Fraud / suppression (s.74 / 74A) must be supported by evidence of intent. A second SCN on the same facts for a later period invoking suppression is generally not valid.
Where both s.73 and s.74 (or 74A) are invoked, each demand must be separately reasoned and quantified.
No parallel proceedings by Central and State officers on the same matter.
Orders must deal with each submission and case law cited by the taxpayer; “reply considered” is not enough. Any AI-generated material used must be verified by the officer.
Rectification u/s 161 is limited to errors apparent on record; it cannot re-open merits.
Provisional attachment: order in DRC-22 Part A; rejection of objection in Part B (Rule 159).
11. Action checklist
Who
Action
By
Accounts / ERP
Update rate masters (retreaded tractor tyres, psyllium, delivery, EV services); add RCM and TDS codes for scrap and used cooking oil
Now
Buyers of scrap / used oil
Classify vendors as registered or unregistered; take TDS registration; set up GSTR-7 filing
Now
Hotels, restaurants, caterers, EV operators
Claim same-line ITC from 1 Nov 2026, within the 5% cap where it applies; EV operators to choose between 5% and 18%
Now
E-commerce platforms and logistics
Pay 5% u/s 9(5) on delivery by unregistered partners; logistics firms delivering marketplace goods to switch to 5% without ITC
Now
Sales / finance
Revisit discount schemes and credit-note process under new s.15(3)(b)
Next credit-note cycle
Refund claimants (inverted duty)
Tag input-service ITC availed after 31 Oct 2026; build capital goods 1/60 register for April 2027
Now / Mar 2027
Exporters
List pending Rule 96(10), 89(4A)/(4B) cases; file submissions citing Circular 264; review export receipts in INR or by set-off
Now
Litigation
Claim pending pre-deposit refunds; test SCNs against Circular 258
Now
Multi-State businesses
Re-check ISD distributions and Rule 54(1A) invoices against Circular 260
Now
E-invoice taxpayers
Enable IRN for RCM self-invoices and import of services
Notification Nos. 03/2026 to 07/2026-Central Tax (26–27 Oct 2026); 02/2026 to 10/2026-Central Tax (Rate) and 07/2026-Integrated Tax (Rate) (27 Oct 2026); Circular Nos. 257/03/2026 to 266/12/2026-GST (26–28 Oct 2026); Finance Act 2026, ss. 153–155; GST Council press release, 57th meeting (8 Oct 2026); ICAI GST Updates
Disclaimer
The views expressed in this article are the personal views of the author and do not necessarily reflect the views of any organisation with which the author is associated.
This article is for general information and education only. It is not legal, tax or professional advice and does not create any professional relationship with the reader. It summarises the law as notified up to 5 November 2026; later notifications, circulars or judicial decisions may change the position.
While care has been taken in preparing this article, no representation or warranty is made as to its accuracy or completeness, and the author accepts no liability for any loss arising from action taken or not taken on the basis of its contents. Readers should refer to the official text of the relevant notifications and circulars and seek professional advice on their specific facts before acting.
