In its 57th GST Council meeting held on October 8,2026, the council approved a series of process and compliance reforms aimed at making GST registration and refunds faster, reducing litigation and easing movement of goods across states. The reforms will be implemented from April 1, 2027, while two issues will be examined further by committees before being brought back to the Council, Union Finance Minister, Nirmala Sitharaman announced on Thursday.
Sitharaman, while announcing the key recommendations said the reforms will make GST administration simpler and more transparent.
Here are the key announcements made by Finance Minister Nirmala Sitharaman:
Faster GST registration and easier changes
The GST Council has decided to further streamline the registration process. Automatic registration is already available within three working days for low-risk and other eligible applicants.
Going forward, routine changes in registration particulars, including an additional place of business, will be automatically accepted. Cancellation of GST registration by taxpayers will also be made easier.
GST refunds to be processed faster
The acknowledgement period for refund applications will be reduced from 15 days to 10 days, with deemed acknowledgement where no response is issued.Based on risk assessment, the system is expected to sanction 90% of refund claims within three working days of acknowledgement.
Refunds of excess cash and major balances will also become automatic, a move expected to improve working capital for businesses.
Sitharaman said the move would help businesses by ensuring that “refunds of excess cash, major imbalances or balances will become automatic. It will enhance working capital for businesses.”
Wider ITC and refund eligibility
The Council has recommended allowing input tax credit for additional business expenditure, including employee health and life insurance and telecom towers.Refunds under the inverted duty structure will include input services for credit availed from November 1, 2026.
For plant and machinery, phased refunds will cover eligible credit availed from April 1, 2027.
No GST notices below ₹10,000
The Council has recommended common standards for GST notices and proceedings.
No notices will be issued for monetary amounts of ₹10,000 or below. Pending notices below this threshold will also be withdrawn.
Sitharaman stressed the significance of the decision, saying: “We will not be issuing any notices for monetary threshold of Rs.10,000 or below.”
GST checks on goods movement to be restricted
Goods can be inspected, detained or seized only by an officer of the supplier state or destination state, according to the Council’s recommendation.
Goods can be intercepted only on the basis of specific intelligence and with authorisation from an officer of at least the Joint Commissioner level.
The move is aimed at preventing arbitrary checks and easing the movement of goods between states.
Sitharaman said the measure would ensure that “any random GST officer cannot go, stop a vehicle and say, come on, show it to me.”
GST arrest powers to be removed
The Council has recommended removing arrest powers under GST.
It has also recommended raising the prosecution threshold from ₹1 crore to ₹5 crore. This means prosecution would not take place for cases below the ₹5 crore threshold.
The general penalty has also been recommended to be reduced from ₹25,000 to ₹10,000.
Easier GST registration for small e-commerce sellers
A simplified GST registration mechanism will be introduced for small sellers operating through electronic commerce operators.
This will allow small businesses to sell without establishing a place of business in every state.
Optional scheme proposed for businesses with turnover up to ₹5 crore
The government has circulated a concept note for an optional scheme for businesses with turnover of up to₹5 crore that supply only to consumers.
Under the proposed scheme, businesses would file one annual return with quarterly tax payments.
The framework has not been finalised yet and will be brought before the next GST Council meeting for a decision.
GST Council refers ITC dispute issue to officers’ committee
The GST Council has decided to set up an officers’ committee to examine proposed amendments to Section 16(2)(c) of the CGST Act, which deals with cases where input tax credit (ITC) claimed by a genuine taxpayer is blocked or reversed because a supplier in the supply chain allegedly failed to deposit tax or passed on fake ITC.
The issue arises even when the recipient has an invoice, has received the supply and has paid the tax amount to the supplier. The Finance Minister said the Council discussed ways to address this anomaly while balancing the concerns of genuine taxpayers and preventing misuse of ITC.
The Centre had proposed limiting the impact to the supplier immediately preceding the taxpayer, rather than extending it to the entire supply chain. However, following requests from some states, the Council agreed to refer the issue to an officers’ committee for further examination.
Explaining the concern, Finance Minister Nirmala Sitharaman said, “Why should an honest payer be put to difficulty and made to wait till such a time every one in the supply chain comes out clean? He’s paid it and he’s waiting.”
The officers’ committee will submit its report within three months. The report will then be circulated to states for examination, following which the GST Council will meet to take a final decision. The decision will form part of the reforms targeted for implementation from April 1, 2027.
No GST rate changes at this meeting
There were no GST rate changes at the meeting. Sitharaman said the GST Council will take up rate changes only once a year.
Centre announces faceless CGST administration
Separately from the GST Council’s agenda, Sitharaman announced a new Central government initiative to introduce a more faceless approach to CGST administration.
She said there are around 69.5 lakh taxpayers exclusively in the CGST jurisdiction, of which around 2 lakh are under multiple CGST jurisdictions, either within one state or across different states.
The government plans to introduce a centralised tax administration for these taxpayers, with a unified window for:
- Scrutiny of returns
- Audit
- Adjudication
- Appeals
- Taxpayer services
- Grievance redressal
A framework will be finalised and put up for public consultation before the Budget next year. The system is planned to be implemented during FY28 (2027-28).
GST Seva Kendras to support taxpayers
GST Seva Kendras will be used to help taxpayers understand and utilise the new reforms.
They will also facilitate filing and uploading of documents and other reports, Sitharaman said.
What changes from April 1, 2027?
The broad reform package covers GST registration, refunds, ITC, enforcement, prosecution, penalties and movement of goods.
The government has said the process reforms discussed at the meeting are targeted for implementation from April 1, 2027. The two issues referred to committees will also be taken up for implementation after the committees report and the GST Council takes a final decision.
Separately, the proposed faceless CGST administration is targeted for implementation during FY28.
