The Goods and Services Tax (GST) system is set for compliance-related changes from November 1, 2026, with measures requiring amendments to the law targeted for April 1, 2027.
The reforms aim to reduce the compliance burden on businesses, minimise return mismatches, improve input tax credit (ITC) reconciliation and facilitate refunds.
The decisions were taken at the 57th GST Council meeting on October 8. Sanjay Mangal, Member (GST) at the Central Board of Indirect Taxes and Customs (CBIC), said on October 22 that measures not requiring legislative amendments would be rolled out in phases from November 1.
Here is what businesses need to know.
GST return forms to be revised
The Finance Ministry will put draft GSTR-1, GSTR-1A and Invoice Furnishing Facility (IFF) forms on the myGov portal on November 1 for public consultation until November 30. The revised forms are scheduled to take effect from April 1, 2027.
Gaurav Singh, Commissioner, GST Policy Wing, CBIC, said nearly 80% of GST notices arise from return mismatches.
The proposed changes, along with improvements to the invoice management system (IMS), aim to align tax liabilities reported in GSTR-1 and GSTR-3B and reduce the need for corrections that can trigger mismatch notices.
Annual returns proposed for small traders
The GST Council has given in-principle approval for an alternative return filing mechanism for businesses making only business-to-consumer (B2C) supplies and having annual turnover below ₹5 crore.
Eligible businesses would be able to file returns annually and pay taxes quarterly.
The Council has also decided to waive late fees for small traders with turnover of up to ₹5 crore if they file returns within the same calendar month in which they were due, even after the original deadline.
Automated GST refunds
Automated sanctioning of refunds is expected to begin after November 1 in applicable cases. Mangal clarified that the measure would cover future refund claims, not accumulated claims already pending.
E-commerce sellers may be able to use platform warehouses
The GST Council has recommended a provision allowing eligible sellers supplying goods through e-commerce platforms to declare the platform’s warehouse as their principal place of business in states where they have no physical presence.
The proposed facility includes a monthly limit of ₹2.5 lakh of GST passed on to registered buyers as ITC, excluding stock transfers between a seller’s own registrations.
Jignesh Ghelani, Partner at Dhruva Advisors, said the measure could help small sellers expand across states and deliver goods faster. However, state-wise registrations, returns and tax payments would continue as required.
The provision awaits notification, with implementation reportedly expected from November 1.
Changes to arrest provisions and prosecution thresholds
Changes requiring legislative amendments are targeted for April 1, 2027. These include changes to arrest provisions, rationalisation of prosecution thresholds, modifications to e-way bill provisions and a proposed minimum threshold of ₹10,000 for show-cause notices.
Mangal said the proposed arrest-related changes would not affect arrests already made. The CBIC is considering whether interim instructions or guidelines could address the issue before the new provisions take effect, but no decision had been taken as of October 22.
Checks to prevent fake invoices and ITC claims
The Council has approved changes to strengthen checks on tax liabilities and ITC claims. These include aligning ITC claimed in GSTR-3B with the credit available in GSTR-2B and enabling recipients to accept, reject or keep pending inward-supply documents through the invoice management system.
The aim is to improve reconciliation and prevent fraudulent invoices and ITC claims at the source.
No GST rate changes announced
The October 8 meeting focused on process and compliance reforms, not tax rate revisions. Mangal said rate-related issues would be considered separately at a future Council meeting, the date of which has not been finalised.
New GST rules explained: Returns, refunds and ITC
What GST changes are expected from November 1, 2026?
The government plans to begin implementing process reforms that do not require amendments to the GST laws, in phases. Automated refund processing is expected to begin in eligible cases after November 1. The proposed facility for eligible e-commerce sellers to use platform warehouses is also expected to be rolled out around this time, subject to notification.
When will the revised GST return forms come into effect?
Draft GSTR-1, GSTR-1A and IFF forms are scheduled to be placed on the myGov portal for public consultation from November 1 to November 30, 2026. The revised forms are scheduled to apply from April 1, 2027.
Will small businesses be allowed to file GST returns annually?
The GST Council has given in-principle approval for an annual return filing mechanism, with quarterly tax payments, for eligible businesses making only B2C supplies and having annual turnover below ₹5 crore. The final rules will determine when and how businesses can use this facility.
Will the latest GST reforms change tax rates?
No GST rate revisions were considered at the October 8, 2026 meeting. The focus was on compliance, return filing, ITC reconciliation, refunds and enforcement-related processes. Rate-related matters are expected to be considered separately at a future meeting.