Finance ministry notifies key GST changes from November 1

The finance ministry has notified November 1, 2026, as the effective date for several changes to the goods and services tax (GST) relating to post-supply discounts, provisional refunds under the inverted duty structure and the removal of the ₹1,000 minimum refund threshold for exports of goods made with payment of tax.

“...the Central Government hereby appoints the 1st day of November, 2026, as the date on which the provisions of sections 153 to 155 of the said Act shall come into force,” said an official notification on amendments to the Central Goods and Services Tax (CGST) Act.

The changes were announced in the Union Budget 2026-27 and passed as part of the Finance Act, 2026. They are expected to provide significant relief to businesses and help unlock working capital. The proposals had been approved by the GST Council at its meeting last year.

Experts highlight that a key change relates to post-supply discounts. Earlier, such discounts could be excluded from the value of supply only if they were established through an agreement entered into at or before the time of supply. However, the Finance Act, 2026, removed this requirement. Post-supply discounts can now qualify for exclusion from the value of supply if the supplier issues a credit note and the recipient reverses the corresponding input tax credit (ITC).

Further, Section 34(1) of the CGST Act, 2017, has also been amended through the Finance Act, 2026, to recognise credit notes issued for discounts covered under Section 15(3)(b), thereby aligning the credit note provisions with the valuation mechanism under GST law.

Rahul Shekhar, partner – indirect tax at Nangia Global, noted that businesses can now issue GST credit notes for eligible post-sale discounts, subject to the recipient reversing the corresponding ITC.

“The change will enable businesses to offer discounts to dealers to drive sales while also availing the benefits associated with credit notes,” he said, adding that the amendment is expected to provide relief to industries such as FMCG, pharmaceuticals, retail and consumer durables, where dealer incentives and volume-based discounts are common.

The notification will also enable businesses to receive 90% of eligible refunds provisionally within seven days in cases involving an inverted duty structure. Experts believe this will help businesses access crucial working capital more quickly.

Another key amendment removes the ₹1,000 minimum threshold for sanctioning refund claims for goods exported out of India with payment of tax.