Introduction

GST compliance is an essential part of running a business in India. From filing returns and claiming Input Tax Credit (ITC) to managing refunds and responding to tax notices, businesses need to stay updated with regulatory changes.

The 57th GST Council Meeting, held on 8 October 2026 in New Delhi under the chairpersonship of Union Finance Minister Nirmala Sitharaman, focused on simplifying GST procedures, improving refund processing, reducing compliance difficulties and streamlining dispute resolution.

The recommendations are relevant to business owners, chartered accountants, tax professionals and finance teams. Here are the key takeaways and what they could mean for businesses.

GST Registration: Simplified Procedures

The Council recommended making GST registration easier through clearer documentation requirements, improved portal guidance and simplified application forms.

It also proposed automatic acceptance of certain registration amendments and easier cancellation procedures for eligible taxpayers who have filed pending returns and cleared outstanding dues.

What this means: Businesses could experience fewer procedural delays, provided they meet the applicable requirements.

Faster GST Refunds

Refund delays can affect working capital, particularly for exporters and businesses operating under an inverted duty structure.

The Council recommended automated processing of eligible refunds, reducing the acknowledgement or deficiency memo period from 15 days to 10 days. It also proposed provisional sanction of 90% of eligible refund claims relating to zero-rated supplies and inverted duty structure, subject to risk assessment and prescribed conditions.

What businesses should do: Reconcile GST returns, purchase records and electronic ledgers before submitting refund claims.

Input Tax Credit: Proposed Changes

The Council recommended changes concerning accumulated ITC and selected blocked-credit provisions.

Key proposals include:

1. Refunds of accumulated ITC on input services in specified inverted-duty cases from 1 November 2026.
2. Refund eligibility for specified capital-goods ITC, spread over 60 months, for credit availed on or after 1 April 2027.
3. Amendments to selected blocked-credit restrictions involving certain expenses and supplies.

These proposals could affect businesses with significant service expenses, capital investments or accumulated credits.

However, businesses should confirm the final amendments and effective dates before changing their ITC claims.

GST Return Filing and Reconciliation

The Council recommended improvements to GST return reporting to reduce mismatches between GSTR-1, GSTR-3B, GSTR-2B and accounting records.

Proposals include better reconciliation mechanisms, improved reporting of reverse-charge transactions, an electronic statement for ITC reversals and reclaims, and changes to invoice management.

The proposed alternate mechanism for correcting tax liability and ITC reporting may be implemented from the April 2027 return period, subject to the required process and implementation measures.

Action for accountants: Regularly reconcile sales, purchases, tax liability, credit notes and ITC records instead of waiting for the proposed changes.

GST Penalties and Prosecution

The Council recommended several changes intended to rationalise GST penalties and prosecution provisions.

Major proposals include:

1. Reducing the maximum general penalty under Section 125 from ₹25,000 to ₹10,000.
2. Increasing the prosecution threshold from ₹1 crore to ₹5 crore under the relevant provisions.
3. Omitting Section 69, which deals with arrest in specified GST offences.
4. Introducing a reduced penalty of 5% in specified non-fraud cases, subject to prescribed conditions and payment timelines.
5. Setting a ₹10,000 minimum threshold for specified show-cause notices.

These are recommendations, not automatic changes to existing law. Businesses should continue meeting compliance obligations and responding to notices within the prescribed time.


GST Appeals and Dispute Resolution

The Council recommended clearer guidelines for notices, adjudication orders and appeals, with greater emphasis on timely decisions and principles of natural justice.

It also recommended a pre-deposit cap of ₹40 crore for specified appeals involving only penalties and no tax demand, comprising ₹20 crore under CGST and ₹20 crore under SGST/UTGST.

Businesses should maintain organised invoices, contracts, payment records and reconciliations to support their position in potential disputes.

Small E-commerce Sellers and Small Businesses

The Council recommended a simplified registration mechanism for eligible small suppliers selling goods through e-commerce operators in States or Union Territories where they do not have a physical business presence.

It also approved in principle a proposed Annual Return Quarterly Payment (ARQP) scheme for eligible taxpayers with turnover of ₹5 crore or less in the preceding financial year who exclusively make B2C supplies.

The detailed eligibility criteria, rules and implementation dates must be confirmed before businesses rely on these proposals.

E-invoicing and Reverse Charge

The Council recommended extending e-invoicing to specified domestic supplies received from unregistered persons under reverse charge and imports of services for taxpayers with aggregate annual turnover of ₹5 crore or more.

Businesses should review how they record reverse-charge transactions, calculate tax liability and determine ITC eligibility. The proposed extension should be distinguished from existing e-invoicing requirements.

Exports, Waste and Scrap: Other Key Proposals

The Council also recommended changes affecting exports of services, foreign-branch transactions, place-of-supply rules and certain supplies involving SEZs and FTWZs.

For specified waste and scrap transactions, proposals include reverse charge on certain supplies from unregistered to registered persons and 2% tax deducted at source on specified transactions between registered businesses.

Other recommendations concern intellectual property rights, second-hand vehicles, electric-vehicle passenger transport, delivery services, selected goods and e-way bill procedures.

Businesses should identify the proposals relevant to their sector and verify the applicable notifications, tax rates and effective dates before changing their accounting practices.

What Should Businesses and Accountants Do Next?

To prepare for potential changes, businesses should:

1. Review official GST Council recommendations and subsequent notifications.
2. Reconcile GSTR-1, GSTR-3B, GSTR-2B and accounting records.
3. Check ITC eligibility, reversals and refund opportunities.
4. Review reverse-charge and e-invoicing procedures.
5. Maintain supporting documents for exports, refunds and disputes.
6. Update accounting processes only after confirming the applicable rules and effective dates.

Proactive monitoring can help businesses reduce errors and avoid unnecessary compliance risks.

Conclusion

The 57th GST Council Meeting focused on improving GST administration through proposed reforms to refunds, Input Tax Credit, registration, return filing, penalties and dispute resolution.

If implemented, these recommendations could help eligible businesses manage working capital, simplify certain compliance processes and improve the accuracy of GST reporting.

However, the actual impact will depend on the final amendments, notifications and implementation dates. Businesses should verify the applicable legal requirements before making changes to their tax treatment or filing procedures.

At WiseBooks, we believe effective accounting goes beyond filing returns. It means staying informed, maintaining accurate financial records and helping businesses make confident financial decisions.