The 57th GST Council met in New Delhi on 8 October 2026 and recommended one of the broadest sets of trade-facilitation changes since GST began, focused on enforcement, refunds and input tax credit.
Enforcement
- Omit the power of arrest under section 69 of the CGST Act.
- Raise the prosecution threshold from ₹1 crore to ₹5 crore and rationalise offences under section 132.
- No show cause notice where the total amount involved is below ₹10,000.
- E-way bill interception only on specific intelligence, authorised by an officer of Joint Commissioner rank or above.
Refunds and ITC
- 90% provisional refund on a risk-based system for zero-rated supplies and inverted duty structure; acknowledgement time cut from 15 to 10 days.
- Removal of certain section 17(5) blocks, such as outdoor catering, health and life insurance, and telecom towers.
- Refund of accumulated ITC on input services and capital goods under inverted duty structures, from notified dates.
Disputes and returns
- Reduced 5% penalty in eligible non-fraud cases if tax and interest are paid within the prescribed time.
- Pre-deposit capped at ₹40 crore in penalty-only appeals.
- Improvements to GSTR-1, GSTR-1A, IFF and IMS for reconciliation with GSTR-3B.
Our view
Most of these changes need amendments to the CGST and State GST Acts, which the Council has recommended from 1 April 2027. Some are already being implemented through CBIC circulars and instructions. Track the notifications before changing positions in returns or litigation.
Reference: Recommendations of the 57th GST Council meeting held on 8 October 2026, New Delhi.