GST Council 57th meeting: faster refunds, no arrest powers, no rate changes

What did the Council decide?

The Council met in New Delhi, more than a year after its previous meeting in September 2025. That earlier meeting had rationalised rates. This time the focus was on procedure, and the Finance Minister confirmed that no rates were altered. She also said rate decisions will now come before the Council only once a year and will apply from the start of the next financial year.

Several measures are described as recommendations or in-principle approvals. They still need to be put into effect under the Central Goods and Services Tax Act, 2017 and related rules, so readers should watch for formal notifications.

Refunds

• Quicker acknowledgement: a refund claim is to be acknowledged within 10 days instead of the present 15.
• Quicker sanction: subject to risk assessment, 90% of the claimed amount is to be sanctioned within three working days of acknowledgement. The earlier period was seven days.
• Inverted duty structure: refunds will extend to input services, for credit availed on or after 1 November 2026.
• Plant and machinery: exporters and eligible manufacturers will be able to claim refunds in monthly instalments of one-sixtieth of the eligible credit over five years, for credit availed on or after 1 April 2027.

Registration and small businesses

• The government says 61% of taxpayers already get automatic registration within three working days. The new system aims to cut queries and rejections for the remaining low-risk applicants.
• Amendment and cancellation of registration have also been made easier.
• Small e-commerce sellers can register in a single State instead of every State where they sell. Eligible sellers can name an e-commerce operator's warehouse in another State as their principal place of business. They must still keep a physical presence in at least one State, and the facility covers only supplies made through e-commerce platforms.
• An optional scheme for businesses with turnover up to ₹5 crore that supply to consumers would allow one return a year, with tax paid quarterly. The Finance Ministry estimates about 16.66 lakh taxpayers fit the criteria. The Council approved it only in principle, and the final decision will come at the next meeting.

Litigation, penalties and prosecution

Late filing, errors and delayed payment will lead to recovery of tax, interest and a proportionate penalty, without further punitive action.

Checks on goods moving between States

Only officers of the supplier's State or the destination State may inspect, detain or seize goods in transit. Officers in between cannot. Goods can be stopped only on "specific intelligence", and only with authorisation from an officer of at least Joint Commissioner rank. The Finance Minister said this prevents arbitrary checks and eases movement of goods.

Other changes

• Input tax credit: allowed on employee health and life insurance. It is also approved for telecom towers, pipelines outside factory premises, free samples, and expired stock that the law requires to be destroyed.
• Exports of services: an Indian firm serving a foreign client through its own overseas branch can claim export benefits. Testing, repair, certification and research done in India for a foreign client are proposed to count as exports even if the goods stay in India. The date an export payment is treated as received will follow Reserve Bank of India rules.
• Faceless assessment: the Centre plans a system for Central GST similar to income tax. A framework will go for public consultation before Budget 2027, with implementation in 2027-28.
• Supplier default: buyers who are denied credit because a supplier did not file returns still await relief. A committee of officers will examine the issue within three months and report to the next meeting.

What should taxpayers do?

• Wait for formal notifications and law amendments before relying on any change.
• Exporters and manufacturers should note the 1 November 2026 and 1 April 2027 credit dates when planning refund claims.
• Small e-commerce sellers and consumer-facing businesses up to ₹5 crore should watch the next Council meeting for the final rules.
• Consult a tax professional about any pending notice or proceeding.

Sources

• The Hindu: GST Council unveils reforms to ease refund, registration and reduce litigation
• Economic Times: No GST rate recast, but there are a lot of winners
• TOI Business: GST reforms: Top things announced by FM Sitharaman-led GST Council

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