On 31 October 2026, the Press Information Bureau release of 9 October 2026 on the 57th GST Council meeting gives 1 November 2026 as the date from which refund of accumulated input tax credit (ITC) on input services in inverted duty cases would apply. It also gives 1 April 2027 for capital goods. The release describes every item as a Council recommendation.
What changed, from the release
The table lists the main items in the release that carry a number or a date. Where the release gives no old figure or no date, the cell says so. It is a selection, not the full list. Source: PIB release of 9 October 2026, valid as of 25 October 2026.
| Item | Before (as stated in the release) | After (as recommended in the release) | Effective date (as stated in the release) |
|---|---|---|---|
| ITC refund on input services, inverted duty structure | Not stated | Refund of accumulated ITC allowed in specified cases | On or after 1 November 2026 |
| ITC refund on capital goods, specified cases | Not stated | Refund spread over 60 months | On or after 1 April 2027 |
| Refund acknowledgement period | 15 days | 10 days, with deemed acknowledgement where no response is issued | Not stated |
| Show cause notices | Not stated | No notice where the tax involved is less than Rs 10,000 | Not stated |
| Prosecution threshold | Rs 1 crore | Rs 5 crore | Not stated |
| Maximum general penalty | Rs 25,000 | Rs 10,000 | Not stated |
| Correcting liability and ITC in returns | Not stated | An alternate mechanism, to align GSTR-3B with GSTR-1 and GSTR-2B | From the April 2027 return period |
Try it: GST Calculator takes an amount, a rate and whether the amount is inclusive or exclusive of GST, and shows the GST and the total. Use it with the rate that applies to your own invoice.
Refunds and input tax credit
The release describes refunds as system-based in two phases. In phase one, excess cash ledger balances become automatic refunds, and the acknowledgement period falls from 15 to 10 days. For refund claims on zero-rated supplies and inverted duty structures, the release expects 90 percent of the claimed amount to be sanctioned, based on risk assessment.
The release also widens ITC refunds to cover accumulated credit on capital goods and input services in specified cases. It lists two dates: input services from 1 November 2026, and capital goods from 1 April 2027, with the capital goods refund spread over 60 months.
Registration, cancellation and returns
The Council recommended automatic acceptance of amendments to registration particulars on the portal, except changes to the principal place of business (PPoB). For taxpayers registered through the automatic route, PPoB changes are also accepted automatically. In the cancellation process, phase one accepts applications automatically once pending returns are filed and dues are paid, for taxpayers who passed on ITC of Rs 2.5 lakh or less in any month.
Notices, penalties and appeals
The release recommends that no show cause notice is issued where the tax involved is less than Rs 10,000. It also proposes a penalty of 5 percent where tax and interest are paid within 30 days (section 73) or 60 days (section 74A) of the adjudication order, and a cap of Rs 40 crore on pre-deposit for appeals where the order involves only penalty. The minimum penalty of Rs 10,000 would be removed in non-fraud cases.
Who it affects, and what to do
- Check whether your business has inverted duty ITC on input services. If it does, the release gives 1 November 2026 as the date from which the refund would apply.
- Check whether your business makes zero-rated supplies, including exports and supplies to SEZ units. The release covers the refund process for those claims and removal of the cap of 1.5 times the value of like goods supplied domestically on zero-rated supply of goods.
- Check the registration details on the GST portal, including the PPoB, before the automatic amendment route applies.
- Read the notification or circular when it is issued. The release lists recommendations, so the final rule and date are in the notification.
- Use the reverse GST calculator to separate the base value from GST when an invoice shows a total with tax included.
The release does not state a date for several items, including the show cause notice threshold and the registration changes. Treat those dates as open until the notification is issued.
What has not changed
The release describes process, refund, registration and compliance items. It does not mention gold jewellery or the GST slabs. It does list recommended GST treatment for some goods and services, for example a nil rate for psyllium seeds (isabgol) and an option of 5 percent GST with restricted ITC for passenger transport using electric vehicles, but it does not state the old rate for these, so the change cannot be shown from the release alone. Our earlier post on the 57th meeting covers the wider outcome of the same release.
Common mistakes
- Treating a recommendation as law. The release describes Council recommendations, so check the notification or circular for the final rule.
- Assuming the 1 November date covers every refund. The release gives that date for input services in inverted duty cases only.
- Reading the Rs 10,000 notice threshold as a refund rule. It applies to show cause notices, not to refunds.
