GST Changes From 1 November 2026: What Is Now Law, What Costs Less and What Businesses Must Do

On 8 October 2026 the GST Council recommended the largest set of changes to the way GST is run since 2017. A recommendation is not law. On 26 and 27 October the Central Government made a large part of it law: one notification brings three amendments made by the Finance Act, 2026 into force, a long set of rule amendments rewrites registration and refunds, and nine rate notifications change what some goods and services cost. Most of it starts on Sunday, 1 November 2026. This guide is written from the notifications themselves rather than the Council's summary: what is law and from which date, what it means in rupees, who has to change something, and what is still waiting for Parliament.

Written on 31 October 2026 from the notifications and circulars as published on CBIC's tax information portal: Notifications 03/2026 to 07/2026-Central Tax (26 and 27 October), 02/2026 to 10/2026-Central Tax (Rate) (27 October) and Circulars 257/03/2026 to 266/12/2026-GST (26 and 28 October). Matching Integrated Tax (Rate) notifications apply the same changes to inter-State supplies, and each State notifies its own State tax changes. Examples are illustrative. For everything the Council recommended, including what is not yet notified, see the 57th GST Council guide.

What is law from 1 November, and what is not yet

Discounts given after the sale

Until 31 October, section 15(3)(b) let a discount given after a sale reduce the taxable value only if it had been agreed at or before the time of the sale and could be tied to particular invoices. Year-end, target and volume discounts are usually decided later, so most of them were passed on through credit notes without GST: the supplier's tax stayed as it was, and the buyer kept all its credit.

From 1 November the test is different. A discount given after the supply is left out of the value if two things happen: the supplier issues a credit note under section 34, and the buyer reverses the credit that relates to the discount. Section 34(1) now names such a discount as a reason for issuing a credit note. The prior agreement and the invoice-by-invoice link are no longer conditions.

An example. A paint company sells stock worth ₹10,00,000 to a dealer in November, with GST at 18% of ₹1,80,000. In March it gives the dealer a 4% turnover discount that was never agreed in advance: ₹40,000. It can now issue a GST credit note for ₹40,000 plus ₹7,200 of tax. Once the dealer reverses ₹7,200 of credit, the company's output tax falls by ₹7,200 and the dealer's net credit on the purchase becomes ₹1,72,800. Under the old rule, the ₹7,200 would have stayed payable by the company and claimable by the dealer.

• The buyer's reversal decides it. Since 1 October 2025 the supplier cannot reduce its tax on a credit note unless a registered buyer has reversed the matching credit. A buyer who does not reverse leaves the supplier paying the tax.
• The time limit is unchanged. A credit note has to be declared by 30 November after the end of the year of the supply, or by the annual return if that is filed earlier.
• Older supplies are not addressed. The notification says nothing about a discount given after 1 November on a sale made before it. Until CBIC clarifies, take advice before issuing GST credit notes against older invoices.

Refunds: faster, and larger for inverted duty

A business is in an "inverted duty structure" when it pays more GST on what it buys than it charges on what it sells, so credit piles up unused. Exporters selling without tax are in the same position. From 1 November:

• 90% up front for inverted duty. The provisional refund of 90% of the claim, available until now for exports and other zero-rated supplies, extends to inverted-duty claims (section 54(6)).
• Ten days to acknowledge. The officer has 10 days, not 15, to acknowledge a claim or point out what is missing. If neither happens, the claim is treated as acknowledged and the 60-day period for the final order counts from the date of filing (rule 90).
• A system order within three working days. The portal generates the provisional refund order within three working days of acknowledgement, on its own assessment of risk, and an officer does not have to revalidate it (rule 91).
• Input services count. The inverted-duty formula in rule 89(5) now includes credit on input services availed on or after 1 November 2026, and deducts the tax payable on the inverted supplies in full rather than in proportion. Credit on capital goods joins from 1 April 2027, spread over 60 months.
• Exporters of goods. The cap that limited export turnover to 1.5 times the value of like goods sold at home is removed (rule 89(4)), and refunds of less than ₹1,000 are now paid on goods exported with payment of tax (section 54(14)).
• The order of debit. A refund of credit is debited first from integrated tax, then from central and State tax equally (rule 89(3)).

What the new formula is worth. Take a manufacturer whose whole month's sales of ₹50,00,000 are taxed at 5%, so its output tax is ₹2,50,000. Its credit is ₹4,00,000 on goods and ₹1,00,000 on services, all availed after 1 November.

The new formula refunds the whole ₹2,50,000 of credit left over; the old one stranded ₹50,000 of it. One caution: section 54(3) of the Act still speaks of tax on "inputs", which the Act defines as goods, and the Council has recommended amending it. Until Parliament does, it is the rule that brings services in. Keep the credit on services availed from 1 November identifiable in your books.

Rates and exemptions that change

In rupees: a retreaded tractor tyre costing ₹8,000 before tax carried ₹1,440 of GST and now carries ₹400. A day's rental of an electric car with driver at ₹3,000 can be billed with ₹150 of GST instead of ₹540, if the operator gives up credit on its own costs other than services bought from other operators. Circular 265/11/2026-GST also confirms that every toy in heading 9503, not only tricycles and pedal cars, falls in the toy entries (5%, or 18% for electronic toys), and that sublimation paper is taxed at 18%.

Delivery of app orders: who pays, and at what rate

Since 22 September 2025, a platform has paid GST at 18% on local delivery carried out through it by riders who are not required to register. From 1 November three things change:

• Wider cover. The platform's liability now covers all delivery services other than postal and courier, not only "local" delivery.
• A lower rate. Delivery through a platform by a person not required to register, and delivery of goods that were ordered through a platform, is taxed at 5% without input tax credit.
• Transporters. The exemption for a goods transport agency carrying goods for unregistered persons no longer applies where the goods were ordered through a platform.

On every ₹100 of delivery charge, the GST falls from ₹18 to ₹5. Other charges on the same order, such as a platform fee, are taxed under their own entries. For a logistics company delivering marketplace parcels, the lower rate comes with no credit on vehicles, fuel or warehouses used for that service, so the price change needs working out case by case. A composition dealer's quarterly statement (CMP-08) now has a separate row for services sold through a platform that pays the tax itself: the dealer pays no tax on them, but counts them in turnover.

Scrap, used cooking oil and e-waste: three new rules

Metal scrap has been under these rules since October 2024. From 1 November they extend to used cooking oil, waste and scrap of plastics, waste and scrap of tyres, and electrical and electronic waste:

1. Reverse charge. When an unregistered person sells these to a registered business, the buyer pays the GST.
2. TDS between registered businesses. A registered buyer purchasing from a registered seller deducts tax at source: 1% central tax and 1% State tax, 2% in all, where the value under a contract is above ₹2.5 lakh, excluding GST. The deduction is paid by the 10th of the next month, and the buyer has to register as a tax deductor.
3. No staying out of GST. A seller of these goods cannot rely on the exemption from registration for suppliers whose sales are all under reverse charge. Above the threshold, it must register.

An example. A recycler in Pune buys ₹4,00,000 of plastic scrap from a registered aggregator in the same State under one contract. It deducts ₹8,000 (₹4,000 of central and ₹4,000 of State tax), pays the aggregator the rest and deposits the ₹8,000 by 10 December. The aggregator claims the ₹8,000 as tax already paid. The same week, the recycler buys ₹50,000 of scrap from an unregistered collector: it pays the GST on that purchase itself, under reverse charge, and can claim it back as credit.

Hotels, caterers, restaurants and cabs: credit from the same trade

Hotel rooms of up to ₹7,500 a night, restaurants outside specified premises, food sold on trains and platforms, and outdoor catering are taxed at 5% on the condition that no input tax credit is taken. From 1 November that condition is relaxed for services bought from the same trade: a hotel can take credit on a room bought from another hotel, a caterer on catering bought from another caterer, a restaurant on restaurant service bought from another restaurant, and a seller of food on trains on food bought from Indian Railways, IRCTC or their licensees. For hotels and outdoor caterers, as for the electric-vehicle options, the credit is capped at 5% of the purchase, even if the other supplier charged more. The Council also recommended this for gyms and fitness centres; that is not in these notifications.

An example. A caterer takes a ₹2,00,000 wedding at 5%, charging ₹10,000 of GST, and hands the desserts to another caterer for ₹40,000. If the second caterer charges 18%, or ₹7,200, the first can take ₹2,000 of credit, which is 5% of ₹40,000. If it charges 5%, the whole ₹2,000 is creditable.

Registration: four changes

• Selling from a platform's warehouse in another State (rule 14B). A business registered in one State can register in another where it has no premises, declaring the warehouse of a platform that collects tax at source as its principal place of business. Its tax on sales to registered buyers must not exceed ₹2.5 lakh a month. The platform has seven working days to consent; Aadhaar authentication, a document check and a physical check of the premises in the home State follow, and the application is treated as approved if the physical check is not done within 30 days. The certificate need not be displayed at the warehouse.
• Changing details (rule 19). A change has to be applied for within 15 days of it happening. A change of principal place of business goes to the officer, who has 15 days to approve it or raise a query; if he does neither, the change is treated as approved. Other changes take effect on filing and online validation.
• Closing a registration (rule 20). The application is due within 30 days of the event that calls for it, except on the death of a sole proprietor, and every return due up to that date must be filed first. The registration is suspended from the day of the application. If all returns are filed on time and all dues paid, and either the tax on sales to registered buyers never exceeded ₹2.5 lakh in a month or the final return, GSTR-10, is filed within three days of its due date, the portal cancels the registration itself. Otherwise the officer has 15 days, after which the cancellation is treated as approved.
• Grounds for cancellation (rule 21). The list in the rules is cut to return-filing defaults, breaches of rule 23's conditions and failure to give bank details under rule 10A. Grounds such as issuing invoices without supply, or not doing business from the declared place, leave the rule; the grounds in section 29 of the Act itself are unchanged.

Other changes from 1 November

• Non-resident taxable persons file GSTR-5 within 13 days after the month, not 20 (rule 63).
• Composition dealers who leave the scheme file GSTR-4 for that year by 30 June, not 30 April (rule 62(5)).
• Renting a car with driver to a company: the reverse-charge entry now refers to central tax at 9%, not 6%, in line with the end of the 12% rate in September 2025.
• Goods moved by metro railway are treated like goods moved by railway for e-way bills (rule 138).
• Exporters of services: money received in a Special Non-Resident Rupee account, a rupee Nostro account or a similar repatriable account counts as export proceeds, and so do brokers' fees from overseas clients paid through NRE or SNRR accounts (Circular 263/09/2026-GST).
• Exporters with old disputes: after the Supreme Court's judgment of 6 August 2026 in Goodluck India, CBIC accepts that the omission of rule 96(10) applies from 23 October 2017, and the same for rules 89(4A) and 89(4B) (Circular 264/10/2026-GST).
• Input service distributors: four rules (36, 39, 54 and 60) now match how the distributor scheme works, and Circular 260/06/2026-GST answers common questions.

What starts later

• 1 December 2026: a new refund application form (RFD-01) with fuller invoice-level statements and a declaration that the applicant has not been prosecuted for evading more than ₹2.5 crore in the previous five years.
• 1 January 2027: businesses that already issue e-invoices must also do so for reverse-charge purchases from unregistered persons and for imported services. For a scrap buyer, that means e-invoicing the purchases from unregistered collectors.
• 1 April 2027: the portal suspends a non-filer's registration and gives 30 days to file, after which it is cancelled; filing within 30 days restores it from the start, and a cancelled registration can be revived within 180 days by filing everything due. Blocking of credit under rule 86A moves to a formal order, with a right to object and a written decision. Credit on capital goods enters export and inverted-duty refunds.

Still waiting for Parliament: arrests, prosecution and notices

The Council's best-known recommendations change the Act itself: omitting the power of arrest in section 69, raising the threshold for prosecution from ₹1 crore to ₹5 crore, narrowing the offences in section 132, limiting when goods in transit can be stopped and seized, and setting a floor of ₹10,000 below which no notice is issued. The Council proposed that these take effect from 1 April 2027. None of them is law today.

In the meantime, CBIC has issued Instruction No. 02/2026-GST, dated 30 October 2026, as reproduced by TaxGuru (we could not open the official copy on CBIC's portal when this was written). It tells central GST officers to make no further arrests; to stop vehicles only on specific intelligence, authorised by an officer of at least Joint Commissioner rank with reasons recorded in writing; and not to issue a show cause notice under sections 73, 74 or 74A where the amount is below ₹10,000. It binds central officers only, though States may issue similar directions, and it is an administrative instruction, not a change in the law.

A checklist for businesses

1. Suppliers who give discounts after the sale: decide which schemes will now go through GST credit notes, and agree with buyers that they will reverse the credit.
2. Buyers who receive such credit notes: reverse the credit in the same return; until you do, your supplier cannot reduce its tax.
3. Exporters and inverted-duty businesses: tag the credit on services availed from 1 November, and track the 10-day acknowledgement and the three-day provisional order on each claim.
4. Buyers of scrap, used cooking oil or e-waste: register as a tax deductor, split suppliers into registered and unregistered, set up reverse-charge self-invoices, and plan for e-invoicing them from 1 January if you already e-invoice.
5. Platforms and delivery firms: reprice delivery at 5% without credit, and re-check transport contracts for goods ordered online.
6. Hotels, caterers and restaurants at 5%: start claiming credit on services bought from the same trade, within the cap, and keep those invoices separate.
7. Electric-vehicle fleets: choose between 5% with limited credit and 18% with full credit.
8. Small sellers on marketplaces: consider registering in other States through a platform's warehouse.
9. Anyone closing a business: apply within 30 days, with every return filed first.

Frequently Asked Questions

What are the GST changes from 1 November 2026? Three amendments to the CGST Act made by the Finance Act, 2026 (on post-sale discounts, credit notes and refunds), the CGST (Amendment) Rules, 2026 (on registration and refunds), and rate notifications that cut the tax on retreaded tractor tyres and app delivery, exempt isabgol and some services, allow 5% on electric-vehicle rides, and put scrap, used cooking oil and e-waste under reverse charge and TDS.

Can a supplier now reduce GST on a discount given after the sale? Yes, from 1 November, if it issues a credit note under section 34 and the buyer reverses the credit linked to the discount. A prior agreement and a link to specific invoices are no longer needed.

Does the change apply to discounts on sales made before 1 November? The notification does not say. Until CBIC clarifies, take advice before issuing GST credit notes against invoices dated before 1 November.

Is GST on delivery charges cheaper from 1 November? Yes for delivery of goods ordered through an app, and for delivery through a platform by riders not required to register: 5% without credit instead of 18%, so ₹5 instead of ₹18 on every ₹100. Other charges on the order are taxed under their own entries.

Has the power to arrest under GST been removed? Not yet. That needs Parliament to amend the CGST Act; the Council proposed 1 April 2027. In the meantime, CBIC's instruction of 30 October, as reproduced by TaxGuru, tells central officers to make no further arrests; it does not bind State officers.

What is the new GST TDS on scrap and e-waste? From 1 November, a registered buyer of used cooking oil, plastic or tyre scrap, metal scrap or e-waste from a registered seller deducts 2% (1% central and 1% State tax) where the contract value is above ₹2.5 lakh, excluding GST, and deposits it by the 10th of the next month.

When can I claim an inverted-duty refund of credit on input services? For credit on input services availed on or after 1 November 2026. Credit availed earlier stays outside the formula. Credit on capital goods follows from 1 April 2027.

What changes for e-invoicing? From 1 January 2027, businesses already issuing e-invoices must also e-invoice reverse-charge purchases from unregistered persons and services imported from abroad.

This guide explains notified changes to GST law and their effective dates. It is not advice on a particular transaction. Where a State has not yet issued the matching State tax notification, check the State's own notification before relying on a State tax change.