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GST Update: Key Highlights from the 57th GST Council Meeting | 8 October 2026

The 57th GST Council meeting was held today, 8 October 2026, in New Delhi. While the 56th meeting cut tax rates, this meeting fixed the process. In short, GST is moving from a policing model to a trust model.

Note: These are recommendations. They will apply only once the law, rules and notifications are amended.

Top 10 Changes at a Glance

Sr. No.

Area

Today

After the change

1

Arrest

Officers can arrest

No arrest power at all

2

Prosecution

Above ₹1 crore

Only above ₹5 crore

3

Notices

Issued for any amount

No notice below ₹10,000; pending cases below this close

4

General penalty

Up to ₹25,000

Up to ₹10,000

5

Penalty if paid quickly (non-fraud)

Higher of 10% or ₹10,000

Only 5% if paid within 30/60 days of order

6

Refunds

Officer approval needed

Cash balance refund fully automatic; 90% of export and inverted duty refunds automatic

7

Blocked ITC

Not allowed on insurance, catering etc.

ITC allowed on outdoor catering, health & life insurance, telecom towers, pipelines outside factory, free samples, expired goods destroyed

8

Refund of ITC

Only on inputs

Inverted duty: ITC on services too (from 1 Nov 2026). Capital goods ITC refundable (from 1 Apr 2027, over 60 months)

9

E-way bill checks

Vehicles stopped in any state

Only on specific intelligence; no checking in transit states

10

Export of services

Services to own foreign branch not export

Can qualify as export; services on foreign clients’ goods too

Other Notable Changes

  • Returns: From April 2027, a new system to correct GSTR-3B so it matches GSTR-1 and GSTR-2B. IMS gets legal backing.
  • Registration: Most changes and cancellations approved automatically.
  • Appeals: Pre-deposit for penalty-only orders capped at ₹40 crore.
  • Blocked Credit: A hearing before the department blocks ITC in the credit ledger.
  • Late Fee: Waived for turnover up to ₹5 crore if return is filed by the end of the due month.
  • E-invoicing: Extended to reverse-charge purchases from unregistered persons and import of services (turnover ₹5 crore+).
  • Scrap: Reverse charge on plastic, e-waste, tyre scrap and used cooking oil from unregistered sellers; 2% TDS on sales between registered persons.
  • Rates: Clarity on sublimation paper, toys, bio-stimulants, isabgol, e-commerce delivery and EV transport; new exemptions incl. seed storage and coffee curing.

Key Dates

1 Nov 2026

ITC on services eligible for inverted duty refund

1 Apr 2027

ITC on capital goods eligible for refund

April 2027 return

New GSTR-3B correction system

What This Means for Our Clients

  • Inverted Duty Clients: track ITC on services from 1 Nov 2026 separately.
  • Litigation: identify pending notices and appeals below ₹10,000 that may close.
  • Past Blocked ITC: review once the change is notified.
  • Service Exporters: revisit dealings with foreign branches.
  • Reconciliation: tighten GSTR-1 / 3B / 2B and IMS matching before April 2027.

The official PIB press release dated 8 October 2026 is attached for reference.

Please feel free to reach out for any clarification or client-specific impact.