India to roll out GST reforms from November 1, refunds to be expedited

India will begin implementing changes to the goods and services tax (GST) from November 1, with measures aimed at easing compliance for businesses, improving the flow of input tax credit (ITC) and speeding up refunds. Reforms requiring amendments to the law are expected to take effect from April 1, 2027.

According to a government notification dated October 26, the changes include easing GST rules related to post-sale discounts and speeding up provisional refunds for businesses facing inverted duty structures. The measures were announced in the 2026-2027 budget.

Sanjay Mangal, Member (GST) of the Central Board of Indirect Taxes and Customs (CBIC), said the reforms approved at the 57th GST Council meeting would be introduced in phases, depending on the system changes required.

“Wherever Act amendments are not required, they will be implemented as soon as possible. Tentatively, these reforms will start from November 1, 2026,” Mangal said during a media interaction here on Thursday.

The 57th meeting of the GST Council was held on October 8 in New Delhi under the chairpersonship of Union Finance and Corporate Affairs Minister Nirmala Sitharaman. The meeting focused on process and structural reforms to reduce the compliance burden on taxpayers, improve the flow of ITC and facilitate refunds.

Measures requiring amendments to the Central and state GST laws are expected to be implemented from April 1, 2027. These include changes to arrest provisions, rationalisation of prosecution thresholds, modifications to e-way bill provisions and the introduction of a minimum threshold of Rs 10,000 for show-cause notices, Mangal said.

GST changes to focus on preventing fake invoices

The CBIC is focusing on technology-driven checks to prevent fake invoices and fraudulent ITC claims, rather than relying primarily on action after such frauds occur.

The Council has decided to amend the return filing mechanism so that tax declared as payable by a supplier and passed on as ITC to the recipient will have to be paid.

“This check will ensure that fake invoices and fake ITCs are not generated in the first instance. The emphasis would be on preventing fraud at the source instead of relying on subsequent proceedings, including arrests,” Mangal said.

He clarified that arrests already made would not be affected by the proposed changes. The new provisions relating to arrests, including the removal of arrest provisions from the law as decided by the Council, will take effect from April 1, 2027.

The department and the CBIC are considering whether the issue could be addressed through instructions or guidelines until the new provisions come into effect. However, no decision has been taken so far, Mangal said.

Small businesses to get relief on return filing

The Council has given in-principle approval to a new return filing mechanism for businesses that make only business-to-consumer (B2C) supplies and have an annual turnover of less than Rs 5 crore.

Under the proposed system, eligible traders would be able to file returns annually and pay taxes quarterly, reducing the frequency of compliance requirements.

The Council has also decided that small traders with turnover of up to Rs 5 crore will not face late fees if they file their returns within the same month in which they were due, even if there was a delay, Mangal said.

Automated refunds to begin after November 1

Automated sanctioning of refunds will begin after November 1, where applicable, Mangal said. The measure will apply to future refund claims and will not cover accumulated refund claims that are already pending.

The government notification dated October 26 also outlined plans to speed up provisional refunds for businesses facing inverted duty structures.

The changes are intended to address delays and blockages affecting businesses’ access to refunds and input tax credit.

No GST rate changes in the latest meeting

Mangal said the latest GST Council meeting focused on process reforms, unlike the previous meeting in September 2025, which concentrated on rate rationalisation and reductions covering around 400 items.

The 57th meeting did not consider any GST rate revisions. Instead, the Council decided to take up rate-related issues separately at a future meeting, the date of which has not yet been finalised.

The earlier rate rationalisation exercise aimed to pass on benefits to consumers, and the government had closely monitored the process, Mangal said.

The latest measures are primarily intended to benefit businesses by easing compliance, addressing ITC blockages and facilitating refunds. Any benefits for consumers are expected to be indirect, through smoother business operations and the possible sharing of gains by industry, he said.