GST changes from November 1, 2026: Refunds, return filing and ITC rules explained
GST compliance reforms are expected to roll out in phases from November 1, 2026, focusing on simpler return filing, faster refunds and improved input tax credit (ITC) reconciliation. While some measures may begin next month, changes requiring legislative amendments are targeted for April 1, 2027.
- Oct 27, 2026,
- Updated Oct 27, 2026 1:03 PM IST
The Goods and Services Tax (GST) Council has recommended a series of compliance-related reforms aimed at simplifying return filing, improving input tax credit (ITC) reconciliation and speeding up refunds, with implementation expected in phases.
Sanjay Mangal, Member (GST) at the Central Board of Indirect Taxes and Customs (CBIC), said on October 22 that measures not requiring legislative amendments could begin rolling out from November 1, 2026, while certain legal changes are targeted for April 1, 2027.
The decisions follow the 57th GST Council meeting held on October 8. Here is what businesses need to know.
GST return forms to be revised
The Finance Ministry will put draft GSTR-1, GSTR-1A and Invoice Furnishing Facility (IFF) forms on the myGov portal on November 1 for public consultation until November 30. The revised forms are scheduled to take effect from April 1, 2027.
Gaurav Singh, Commissioner, GST Policy Wing, CBIC, said nearly 80% of GST notices arise from return mismatches. The proposed changes aim to align tax liabilities reported in GSTR-1 and GSTR-3B and reduce notices arising from discrepancies.
MUST READ: GST’s next big push: More taxpayers, better compliance and higher revenue
Annual returns proposed for small traders
The GST Council has approved in principle an optional Annual Return Quarterly Payment (ARQP) scheme for businesses with turnover of up to ₹5 crore in the preceding financial year that supply exclusively to unregistered customers.
Eligible businesses would file returns annually and pay taxes quarterly. The Council has also recommended waiving late fees for taxpayers with turnover of up to ₹5 crore if delayed returns are filed by the end of the month in which they were due.
Automated GST refunds and ITC relief
Automated sanctioning of eligible GST refunds is expected to begin after November 1, according to Mangal's reported remarks. The proposed facility would cover future claims, not accumulated claims already pending.
ALSO READ: 'Faster decisions, lower compliance': PM Modi welcomes new GST reforms
The Council has recommended reducing the time limit for issuing refund acknowledgements or deficiency memos from 15 days to 10 days. Eligible claims relating to zero-rated supplies and inverted duty structures could receive 90% provisional refunds through an automated, risk-based process.
Businesses will also be eligible for refunds of accumulated ITC on input services under the inverted duty structure for credit availed on or after November 1, 2026, subject to the applicable legal changes.
E-commerce sellers may get easier registration
Eligible small sellers supplying goods through e-commerce platforms could declare platform warehouses as their principal place of business in states where they have no physical presence, subject to prescribed conditions. The proposal includes a monthly limit of ₹2.5 lakh of ITC passed on to registered buyers.
Jignesh Ghelani, Partner at Dhruva Advisors, said the measure could help small sellers expand across states. State-wise registration, return filing and tax payment requirements would continue as applicable.
GST arrest provisions and prosecution threshold
Certain legal changes are targeted for April 1, 2027, according to Mangal's reported remarks. These include removing GST arrest powers, raising the prosecution threshold from ₹1 crore to ₹5 crore and modifying e-way bill provisions.
The Council has also recommended a minimum ₹10,000 threshold for issuing show-cause notices, covering the aggregate tax amount involving CGST, SGST, IGST and cess.
Mangal said the proposed arrest-related changes would not affect arrests already made. The CBIC was examining interim guidelines, but no decision had been taken as of October 22.
ALSO READ: Can Electronic Gold Receipts overcome GST and liquidity hurdles to unlock India's gold market?
No broad-based GST rate rationalisation
The meeting focused primarily on compliance reforms rather than broad-based rate rationalisation, although specific rate-related clarifications and exemptions were recommended for certain goods and services.
The proposals will take effect through the relevant notifications, circulars, rule changes and legislative amendments. Businesses should check the applicable notifications before treating any recommendation as an implemented change.
The Goods and Services Tax (GST) Council has recommended a series of compliance-related reforms aimed at simplifying return filing, improving input tax credit (ITC) reconciliation and speeding up refunds, with implementation expected in phases.
Sanjay Mangal, Member (GST) at the Central Board of Indirect Taxes and Customs (CBIC), said on October 22 that measures not requiring legislative amendments could begin rolling out from November 1, 2026, while certain legal changes are targeted for April 1, 2027.
The decisions follow the 57th GST Council meeting held on October 8. Here is what businesses need to know.
GST return forms to be revised
The Finance Ministry will put draft GSTR-1, GSTR-1A and Invoice Furnishing Facility (IFF) forms on the myGov portal on November 1 for public consultation until November 30. The revised forms are scheduled to take effect from April 1, 2027.
Gaurav Singh, Commissioner, GST Policy Wing, CBIC, said nearly 80% of GST notices arise from return mismatches. The proposed changes aim to align tax liabilities reported in GSTR-1 and GSTR-3B and reduce notices arising from discrepancies.
MUST READ: GST’s next big push: More taxpayers, better compliance and higher revenue
Annual returns proposed for small traders
The GST Council has approved in principle an optional Annual Return Quarterly Payment (ARQP) scheme for businesses with turnover of up to ₹5 crore in the preceding financial year that supply exclusively to unregistered customers.
Eligible businesses would file returns annually and pay taxes quarterly. The Council has also recommended waiving late fees for taxpayers with turnover of up to ₹5 crore if delayed returns are filed by the end of the month in which they were due.
Automated GST refunds and ITC relief
Automated sanctioning of eligible GST refunds is expected to begin after November 1, according to Mangal's reported remarks. The proposed facility would cover future claims, not accumulated claims already pending.
ALSO READ: 'Faster decisions, lower compliance': PM Modi welcomes new GST reforms
The Council has recommended reducing the time limit for issuing refund acknowledgements or deficiency memos from 15 days to 10 days. Eligible claims relating to zero-rated supplies and inverted duty structures could receive 90% provisional refunds through an automated, risk-based process.
Businesses will also be eligible for refunds of accumulated ITC on input services under the inverted duty structure for credit availed on or after November 1, 2026, subject to the applicable legal changes.
E-commerce sellers may get easier registration
Eligible small sellers supplying goods through e-commerce platforms could declare platform warehouses as their principal place of business in states where they have no physical presence, subject to prescribed conditions. The proposal includes a monthly limit of ₹2.5 lakh of ITC passed on to registered buyers.
Jignesh Ghelani, Partner at Dhruva Advisors, said the measure could help small sellers expand across states. State-wise registration, return filing and tax payment requirements would continue as applicable.
GST arrest provisions and prosecution threshold
Certain legal changes are targeted for April 1, 2027, according to Mangal's reported remarks. These include removing GST arrest powers, raising the prosecution threshold from ₹1 crore to ₹5 crore and modifying e-way bill provisions.
The Council has also recommended a minimum ₹10,000 threshold for issuing show-cause notices, covering the aggregate tax amount involving CGST, SGST, IGST and cess.
Mangal said the proposed arrest-related changes would not affect arrests already made. The CBIC was examining interim guidelines, but no decision had been taken as of October 22.
ALSO READ: Can Electronic Gold Receipts overcome GST and liquidity hurdles to unlock India's gold market?
No broad-based GST rate rationalisation
The meeting focused primarily on compliance reforms rather than broad-based rate rationalisation, although specific rate-related clarifications and exemptions were recommended for certain goods and services.
The proposals will take effect through the relevant notifications, circulars, rule changes and legislative amendments. Businesses should check the applicable notifications before treating any recommendation as an implemented change.