GST process reforms to start 1 November, notifications awaited

India's GST process reforms will start rolling out from 1 November 2026, an official said on 22 October, with the notifications and circulars expected on 23 October. The 57th GST Council meeting on 8 October approved the changes, which cover registration, refunds and adjudication¹.

The official said the legal department had cleared the notifications. Measures that can be done administratively will be phased in from 1 November. Those that need an amendment to the GST law will wait until 1 April 2027¹. The Economic Times reported the same 1 November start for the registration and refund measures³.

Notification numbers and operative dates were not confirmed at the time of writing. The 1 November date rests on the official quoted by BusinessLine¹. The Finance Ministry's own refund clarification says the proposals need amendments, notifications and portal changes before they apply².

What changes for marketplace sellers

A small supplier who sells goods through an e-commerce platform in several states can declare the platform's warehouse in that state as its principal place of business. That applies where the supplier has no physical presence in the state¹. It must have a genuine presence in one state, where physical verification and Aadhaar authentication are done. The scheme applies only where the seller passes on input tax credit of up to Rs 2.5 lakh a month¹.

Registrations in other states would then be granted with the platform's consent, without further involvement of a tax officer¹. BusinessLine reported that the change could let around 9.5 lakh small sellers sell across the country without opening offices in every state¹.

The Council also approved a single circular listing the documents and information needed for registration. Form GST REG-01 will have drop-down lists, and the portal will add tool-tips and clearer navigation, which the official said should cut rejections and speed up processing¹.

Refunds: 90% paid first, scrutiny later

Excess balance in the electronic cash ledger will be refunded in full automatically, without an officer's intervention¹. For zero-rated supplies and inverted duty structure claims, 90% of the amount claimed will be sanctioned provisionally by the system, based on its own risk assessment¹.

The Finance Ministry's refund clarification, reported by Taxscan on 22 October, sets out the mechanics. The provisional refund order in Form GST RFD-04 is to be issued within three working days of acknowledgement². An acknowledgement or deficiency memo must come within 10 days, down from 15, and the portal will acknowledge automatically if the officer does not act². The shorter deadline applies to all refund categories except excess cash ledger balance².

Several groups are excluded. Notified categories dealing in areca nuts, pan masala, tobacco, manufactured tobacco substitutes and essential oils will not get provisional refunds². Nor will taxpayers who have not completed Aadhaar authentication under Rule 10B². Claims also face extra scrutiny where a Form GST DRC-01 has been issued, or where an appeal is pending without the matching Form APL-04².

In the first phase, officers will still examine claims and issue the final order in Form GST RFD-06². In the second, low-risk zero-rated claims will also get automated final refunds, verified against ICEGATE, the RBI's EDPMS and SEZ Online². Inverted duty claims will be scrutinised before a payment order in Form GST RFD-05².

Interest compensates for the delay. A refund delayed beyond the statutory 60 days earns interest under Section 56². Where a refund was withheld under Section 54(11) and later allowed, interest of 6% runs from the date of withholding². The Rs 1,000 minimum refund limit is applied by combining amounts across tax heads, not separately for each².

The Rs 10,000 notice floor

The Council set a minimum threshold of Rs 10,000 for issuing show-cause notices, to reduce litigation and compliance work¹. The briefing did not say whether the floor applies per notice, per tax period or per issue¹.

What waits for April 2027

Some of the relief has later dates written into it. Input services credit can be counted in inverted duty refunds for invoices from 1 November 2026, but only where the rate gap comes from goods, not services². Credit on capital goods enters the refund formula for purchases from 1 April 2027, spread over 60 months².

The Council also recommended dropping the rule that limits the zero-rated supply value used in refund calculations to 1.5 times the domestic value of similar goods under Rule 89(4)(C)².

Return forms are on a separate track. Draft changes to GST return forms will be put out for public comment from 1 November, and the changes are due to apply from 1 April 2027³.

The Finance Ministry's clarification said the refund proposals will take effect only after the amendments, notifications and portal changes are in place².