57th GST Council Meeting: Every Decision, Who It Affects and What It Changes in Rupees
The 56th GST Council cut rates. The 57th, on 8 October 2026, rewrote the process. The power of arrest goes, the prosecution threshold rises from ₹1 crore to ₹5 crore, and small taxpayers stop paying a late fee if they file within the month. Input tax credit is unblocked on group insurance, staff catering and free samples, and refunds become largely automatic. Exporters, e-commerce sellers, transporters and scrap dealers each get their own changes. Here is every decision from the Council's release, grouped by who it affects, with a worked example in rupees for each that changes a bill, and the dates that are already fixed.
The GST Council met for the 57th time on 8 October 2026, in New Delhi, with the Union Finance Minister in the chair. A year earlier, at the 56th meeting, it had cut and merged rates. This time it worked on the machinery: registration, returns, refunds, notices, penalties, the movement of goods and exports. It also settled a list of disputes over what rate applies to particular goods and services. Few of these decisions change a price in a shop. Many change what a business owes, what it can claim and how often an officer is involved. This guide lists every decision in the Council's own release, by who it affects, with an example in rupees wherever a figure changes.
Written on 16 October 2026. The source is the Council's release of 8 October 2026, as published by the Press Information Bureau, and PIB's backgrounder of 9 October. Today's rules used in the examples are from the notifications and sections they change. The release itself says the recommendations "would be given effect through the relevant circulars/notifications/law amendments which alone shall have the force of law". Most need an amendment to the CGST Act, which Parliament and each State must pass. So read every item below as what is coming, not what applies today, unless a date is given. The rates on household goods are covered in a separate guide to GST on appliances, which also has a short summary of this meeting.
Section 69 — the power of arrest, to be omitted · ₹5 crore — the new prosecution threshold, up from ₹1 crore · ₹10,000 — no show-cause notice below this amount of tax, and the new cap on the general penalty, down from ₹25,000 · ₹5 crore — turnover up to which a return filed within the month carries no late fee · 90% — share of an export or inverted-duty refund to be sanctioned by the system · April 2027 — the return period from which GSTR-3B is to be lined up with GSTR-1 and GSTR-2B.
GST in numbers: the system these decisions change
Source: PIB backgrounder "Next-Gen GST Process Reforms", 9 October 2026.
Which of these dates are already fixed
| Change | From when |
|---|---|
| Refund of accumulated credit on input services in an inverted-duty refund | Credit taken on or after 1 November 2026 |
| GSTR-3B lined up with GSTR-1 and GSTR-2B (the "alternate mechanism") | The return for April 2027, after a public consultation |
| Refund of credit on capital goods, spread over 60 months, in export and inverted-duty refunds | Credit taken on or after 1 April 2027 |
| Rule 96(10) omitted | With effect from 23 October 2017, in line with the Supreme Court's decision |
| Everything else | When the circular, notification or Act amendment is issued |
Who is affected: find yourself
| If you are… | The decisions that matter to you |
|---|---|
| A small business, turnover up to ₹5 crore | No late fee within the month; simpler registration and cancellation; a proposed annual-return scheme for shops selling only to consumers |
| Any business facing a notice | No notice under ₹10,000 of tax; no ₹10,000 minimum penalty; 5% penalty if paid quickly; lower general penalty; no arrest; a hearing before credit is blocked |
| An employer | Credit on group health and life insurance and on outdoor catering |
| An exporter of goods or services | Faster refunds; the 1.5-times cap removed; branch-to-head-office services counted as exports; rule 96(10) gone |
| A manufacturer with inverted duty (inputs taxed above output) | Refund of credit on input services, and later on capital goods |
| An e-commerce seller or platform | Registration in other States using the platform's warehouse; 5% on app delivery services |
| A transporter, or anyone moving goods between States | No routine interception in transit States; no confiscation of goods in transit |
| A restaurant, hotel (rooms up to ₹7,500) or gym | Limited input tax credit from the same line of business |
| A cab or rental operator using electric vehicles | An option to charge 5% |
| A buyer or seller of scrap | Reverse charge on scrap bought from unregistered sellers; 2% TDS between registered persons |
| A shopper | Mostly nothing at the counter; delivery charges on app orders taxed at 5% |
1. Notices, penalties, prosecution and arrest
The Council called this a "trust-based" approach: fewer notices for small amounts, lower penalties for honest mistakes, and criminal provisions kept for fraud.
- Arrest: section 69 of the CGST Act, the power of arrest, is to be omitted completely.
- Prosecution: the monetary threshold rises from ₹1 crore to ₹5 crore. Section 132 is narrowed. Clause (c) will cover only fraudulent credit taken without receiving goods or services, or without an invoice. Clause (i) and some words in clauses (e) and (h) go, and the punishments are rationalised.
- Show-cause notices: none where the tax involved (CGST, SGST, IGST and cess together) is below ₹10,000. Notices and appeals already pending below that amount will be decided as if the limit had applied when they were issued.
- Penalty in non-fraud cases: the ₹10,000 minimum goes. The penalty falls to 5% where the tax and interest are paid within 30 days of the order under section 73, or 60 days under section 74A. A penalty paid voluntarily with the full tax and interest, within the time allowed, is deemed to be a "charge".
- General penalty under section 125, for breaches with no specific penalty: the maximum falls from ₹25,000 to ₹10,000.
- Appeals on penalty alone: the pre-deposit is capped at ₹40 crore (₹20 crore CGST and ₹20 crore SGST), before the Appellate Authority and before the Tribunal.
- Blocked credit: rule 86A is to give the taxpayer a right to object, and a personal hearing, before the officer decides on blocking the electronic credit ledger.
- Standards for officers: a circular on the quality and timing of notices and orders. It will also say that fraud or suppression is alleged only on the merits of each case, and that personal hearings must be given.
| Example: a non-fraud demand under section 73 | Penalty today | After the change |
|---|---|---|
| Tax of ₹8,000 on a mismatch | A notice can be issued; penalty ₹10,000 (the minimum) | No notice at all |
| Tax of ₹60,000 | ₹10,000 (10% would be ₹6,000, but the minimum is ₹10,000) | ₹6,000; ₹3,000 if tax and interest are paid within 30 days |
| Tax of ₹5,00,000 | ₹50,000 (10%) | ₹50,000; ₹25,000 if paid within 30 days |
Today's penalty is from section 73(9): "ten per cent. of tax or ten thousand rupees, whichever is higher". Interest is payable in every case.
One change goes the other way. Several courts have struck down notices issued for more than one financial year at once. The Council recommended a validation clause in the Act to make such notices valid. A business that won on that ground alone should expect the notice to be revived.
2. Small businesses: late fees, registration and a new scheme
Late fee. For a taxpayer with turnover up to ₹5 crore in the previous year, there will be no late fee on a return under section 39(1) filed late but by the end of the month in which it was due. Today GSTR-3B carries a late fee of ₹50 a day (₹25 central plus ₹25 State), or ₹20 a day on a nil return. It is capped at ₹2,000 for turnover up to ₹1.5 crore and ₹5,000 for ₹1.5 crore to ₹5 crore.
| A trader with ₹2 crore turnover; September GSTR-3B due on 20 October | Late fee today | After the change |
|---|---|---|
| Filed on 28 October (8 days late) | ₹400 | Nil: filed within October |
| Filed on 3 November (14 days late) | ₹700 | ₹700: filed after the month |
The waiver covers the late fee only. Interest on tax paid late is still charged. The site's compliance calendar has the GST return dates, with feeds for monthly and quarterly filers.
Registration.
- A circular and FAQs listing the documents needed, with drop-down lists for documents in the application (FORM GST REG-01) and guidance on the portal. Today automatic registration under rule 14A is for applicants passing on credit of up to ₹2.5 lakh a month.
- Amendments to registration accepted automatically, except a change of the principal place of business. Automatic-route registrants get even that accepted automatically.
- Cancellation on application accepted by the system once returns are filed and dues paid. Phase 1 covers taxpayers who never passed on more than ₹2.5 lakh of credit in a month, or who filed the final return (GSTR-10) in time. Phase 2 covers everyone.
- System-based cancellation, and revocation, for not filing returns or not giving bank details. Some grounds on which officers cancel today are to go.
Annual Return, Quarterly Payment (ARQP). The Council approved in principle a concept note for an optional scheme for businesses with turnover up to ₹5 crore that sell only to unregistered buyers, such as a shop or a salon. The name says what it would do: one return a year, tax paid every quarter. It is not yet a scheme. The rules have still to be written.
3. Input tax credit: what becomes claimable
Section 17(5) of the CGST Act lists purchases on which credit is blocked even when they are used in business. The Council recommended removing the block on these items, among others: outdoor catering, health and life insurance, telecommunication towers, pipelines laid outside the factory, free samples, and goods destroyed or written off on the expiry of their shelf life where the law requires it.
| Example | Today | After the change |
|---|---|---|
| An employer buys group health cover for staff: premium ₹5,00,000 plus 18% GST of ₹90,000 | ₹90,000 is a cost (blocked unless the law makes the cover compulsory) | ₹90,000 can be claimed as credit |
| A drug maker destroys expired stock as the law requires; credit on its inputs was ₹1,80,000 | Credit reversed | Credit kept |
| A company hands out free samples on which it took ₹50,000 of credit | Credit reversed | Credit kept |
Group policies still carry GST. The 56th Council exempted individual life and health insurance only: PIB's FAQs say the exemption applies "where the insured is not a group".
Restaurants, hotels and gyms. These are taxed at 5% without credit. Hotel rooms are covered where the tariff is up to ₹7,500 a unit a day. The Council recommended allowing them credit on purchases from the same line of business, as transport, tour and car-rental operators already have. A hotel that pays for rooms at another hotel to house its overflow guests could take credit on that bill.
Clarifications coming by circular on Input Service Distributors, on credit for banks and NBFCs that use the 50% option in section 17(4), on demonstration vehicles, and on pre-deposits. For dealers in second-hand vehicles under the margin scheme, it is clarified that only the tax on the vehicles bought is barred. Credit on spares, repairs, rent, technology and advertising is allowed.
4. Refunds and working capital
- Excess cash in the electronic cash ledger: refunded in full by the system, with no officer involved.
- Faster acknowledgement: the officer has 10 days, down from 15, to acknowledge a refund application or issue a deficiency memo. After that it is deemed acknowledged.
- Provisional refund: 90% of an export (zero-rated) or inverted-duty claim is to be sanctioned by the system, on its own risk assessment. In a second phase, export refunds are to be sanctioned in full by the system, after adjusting any dues.
- No scanned documents: FORM GST RFD-01 is to capture details in a system-readable form for these claims.
- The 1.5-times cap goes: rule 89(4)(C) counts zero-rated goods at no more than 1.5 times the value of like goods sold in India. That cap is to be removed.
- The ₹1,000 minimum under section 54(14) will apply to the total refund across CGST, SGST and IGST together.
- Interest on refunded pre-deposits: section 115 is to become a standalone rule on the rate, with a circular to explain it.
- Input services and capital goods in refunds: credit on input services counts in an inverted-duty refund for credit taken from 1 November 2026. Credit on capital goods counts in export and inverted-duty refunds for credit taken from 1 April 2027, spread over 60 months.
| Example | Today | After the change |
|---|---|---|
| An exporter sells a product abroad at ₹150 a unit; the same product sells in India at ₹80 | Export turnover counted at ₹120 a unit (1.5 × ₹80) in the refund formula | Counted at the full ₹150 |
| A refund of ₹450 CGST, ₹450 SGST and ₹200 IGST | Each head is under ₹1,000 | ₹1,100 in total: above the minimum |
| A textile unit (inputs at 18%, output at 5%) pays ₹40,000 a month of GST on freight, job work and rent | Not counted in the refund: only inputs are | Counted, for credit taken from 1 November 2026 |
| An exporter buys a ₹1 crore machine with ₹18 lakh of GST, on or after 1 April 2027 | Not refundable; it waits in the ledger | Refundable over 60 months, about ₹30,000 a month if spread evenly (the rules will set the method) |
5. Exports of services and goods
- Branches and head offices. Today, services between establishments of the same person (an Indian branch and its foreign head office) cannot be an "export of services". That condition is to go. An Indian branch providing back-office or IT services to its foreign head office could then treat them as exports, zero-rated with a refund of the GST on its costs.
- Work on goods sent from abroad. Section 13(3)(a) of the IGST Act makes the place of supply the place of performance where the recipient makes the goods available to the supplier, as with repairs, testing or treatment. It is to be omitted, so the default rule, the recipient's location, applies. An Indian lab testing samples sent by a foreign company, for a fee of ₹20 lakh, would then make an export, if the other export conditions are met, instead of charging ₹3.6 lakh of GST at 18%.
- Delivery in an SEZ or FTWZ. Goods sold to an overseas buyer but delivered to that buyer in an SEZ or free trade warehousing zone are to be deemed a supply to the SEZ, and so zero-rated. Payment must be in convertible foreign exchange, or in rupees where the RBI permits.
- Rule 96(10), which restricted refunds of IGST paid on exports by exporters who had used certain concessions on their inputs, is to be omitted from 23 October 2017. This follows the Supreme Court's decision. Exporters whose refunds were denied under it should review those cases.
- Payment in rupees: a circular is to clarify when export proceeds in Indian rupees qualify.
6. Returns: GSTR-3B to match GSTR-1 and GSTR-2B
Many GST notices and system intimations come from mismatches: the tax declared in GSTR-3B differs from the sales in GSTR-1, or the credit claimed differs from GSTR-2B. The Council expects these changes to reduce them. The Council recommended a set of changes to stop those mismatches arising, from the April 2027 return, after a public consultation:
- A way to correct the liability in GSTR-3B so that it matches GSTR-1, 1A or IFF, and the credit so that it matches GSTR-2B.
- Two new electronic statements: one for tax paid on reverse charge and the credit claimed on it, and one for credit reversed and reclaimed.
- Rules for the Invoice Management System, under which a buyer accepts, rejects or keeps pending each supplier document, with a time limit for keeping credit notes pending.
- DRC-03 payments to name the invoice they relate to.
Separately, the deadlines for filing GSTR-1 and GSTR-3B are to be aligned with the time limit for claiming credit in section 16(4). E-invoicing is to extend, for businesses with turnover of ₹5 crore or more, to purchases from unregistered persons under reverse charge and to imports of services. That is new paperwork for those businesses.
7. Moving goods: e-way bill checks
- A vehicle may be stopped only on specific intelligence and with the authorisation of an officer not below Joint Commissioner.
- Inspection, detention or seizure only in a State where the supplier or the buyer is located or registered. No interception in transit States.
- Where there is no e-way bill, or no document showing where the goods come from or are going, the goods can be checked anywhere.
- Confiscation under section 130 will not apply to goods or vehicles in transit.
A truck from Ludhiana to Kolkata with a valid e-way bill would cross Haryana, Uttar Pradesh and Bihar without being stopped for a routine check by those States' officers. It would still be checked anywhere if it had no e-way bill.
8. E-commerce sellers, platforms and delivery
- Selling in other States: a new rule 14B is to let a small seller register in a State where it has no premises, using the platform's warehouse as its principal place of business. This is for sellers passing on credit of no more than ₹2.5 lakh a month, excluding stock transfers. Registration is automatic, subject to conditions.
- Delivery services: delivery (other than courier and postal) supplied through a platform by a person not required to register comes under section 9(5), so the platform pays the tax. Delivery of goods ordered through a platform is to be taxed at 5% without credit. Local delivery is taxed at 18% today.
- Transport by goods transport agencies: the exemption for carrying goods to unregistered persons will not apply where the goods were ordered through a platform.
- Platform liability: section 9(5) is to make clear that the platform pays tax on notified services, whatever its business model.
On a ₹40 delivery fee, the GST falls from ₹7.20 at 18% to ₹2.00 at 5%. The GST calculator works out any fee: enter it, choose 5% or 18%, and choose whether the fee includes tax.
9. Rates and exemptions settled
| Item | What the Council recommended |
|---|---|
| Cab and car-rental rides in electric vehicles | An option of 5% with restricted credit where the charging cost is in the fare, matching the 5% option for vehicles where fuel is included. On a ₹1,000 ride that is ₹50 of GST, against ₹180 at 18% |
| Waste and scrap of plastics, electrical and electronic goods and tyres, and used cooking oil | Reverse charge when an unregistered person sells to a registered one, even below the registration threshold; 2% TDS when one registered person sells to another |
| Toys | The toy entries cover dolls, puzzles and every other toy in heading 9503, not only tricycles, scooters and pedal cars |
| Psyllium (isabgol) seeds | Nil, whether fresh, chilled, frozen or dried |
| Re-treaded tractor tyres | The same rate as new tractor tyres |
| Seaweed-extract bio-stimulants | Fertilisers under heading 3101; past cases settled as they stand |
| Sublimation paper | Heading 4809; past cases settled as they stand |
| Transfer of intellectual property rights | Always a supply of services, whether temporary or permanent |
| Helicopter seat-sharing to and from the North-East, Sikkim and Bagdogra | Exempt |
| Storage of seeds for sowing; curing of coffee for growers | Exempt |
| Seamen's Provident Fund Organisation | Its services to members exempt |
| Research and development | Self-certification by the head of the institution that the work is research, not consultancy, for the exemption |
| Foreign shipping lines | Services received free from a related establishment abroad exempt; the past settled as it stands |
| Highway toll concessions under Toll Operate Transfer (TOT) | The grant of the right to collect tolls exempt; a special procedure for operation and maintenance services |
| Vehicle leasing | Clarity on registration charges, road tax, insurance and FASTag recovered from the lessee |
| Banks' internal fund transfer pricing | The notional "interest" between branches is interest for the exemption |
| Canteen Stores Department | Compensation cess not collected on vehicles (July 2017 to September 2022) and aerated drinks (July 2017 to March 2022) exempted |
The GST Appellate Tribunal's rules are also to be aligned with the Tribunals Reforms Act, 2026.
What to do now
- Nothing changes in your returns yet. Keep filing on the current rules and due dates until each change is notified.
- Small businesses: the late-fee waiver will reward filing within the month, but interest on late tax stays. Plan payments, not just filing.
- Employers and drug, FMCG or telecom businesses: list the credit you now reverse or cannot take on insurance, catering, samples, expired stock, towers and pipelines. Do not claim it before the law changes.
- Exporters: check refunds denied under rule 96(10) or capped at 1.5 times, and services to a foreign head office that were not treated as exports.
- Inverted-duty manufacturers: track credit on input services from 1 November 2026 separately; it is the credit that will count.
- Anyone with a notice under ₹10,000, or one that covers several years at once: note how the two changes treat it.
For a small service business working out whether it needs to register at all, this guide covers the thresholds and the first year.
Frequently Asked Questions
When was the 57th GST Council meeting held? On 8 October 2026, in New Delhi, chaired by the Union Finance Minister. It followed the 56th meeting of September 2025, which cut and merged GST rates.
Did the 57th GST Council change GST rates? Not on ordinary goods. It settled classification and rate questions on particular items: toys, isabgol, re-treaded tractor tyres, bio-stimulants, scrap and others. It set 5% without credit on app delivery services, an EV option of 5% for cabs and rentals, and some exemptions. Its main work was on process.
Has arrest under GST been removed? The Council recommended omitting section 69 of the CGST Act, which holds the power of arrest. It needs an amendment to the Act, passed by Parliament, before it takes effect.
What is the new prosecution limit under GST? The Council recommended raising the monetary threshold for prosecution from ₹1 crore to ₹5 crore, and narrowing the offences in section 132 to genuine fraud such as credit taken without goods, services or an invoice.
Is the GST late fee waived for small taxpayers? The Council recommended no late fee for taxpayers with turnover up to ₹5 crore in the previous year, where a late return is filed by the end of the month in which it was due. It applies once notified, and interest on late tax is still charged.
Will a show-cause notice be issued for a small GST amount? Not below ₹10,000 of tax, counting CGST, SGST, IGST and cess together, once the change is made. Pending notices and appeals below ₹10,000 are to be decided as if the limit had applied from the start.
Can a company claim GST credit on group health insurance? Not yet. The Council recommended removing the block in section 17(5) on health and life insurance, and on outdoor catering and some other items. Once the Act is amended, the GST on a group policy used for the business could be claimed.
How will GST refunds become faster? Excess cash in the cash ledger is to be refunded by the system. Applications are acknowledged within 10 days or deemed acknowledged. 90% of export and inverted-duty refunds are to be sanctioned provisionally by the system, and later full export refunds automatically.
Can an Indian branch export services to its foreign head office? The Council recommended removing the condition in the IGST Act that stops services between establishments of the same person from being exports. Once that is done, such services can qualify as exports, with the other conditions met.
What is the GST rate on delivery charges for app orders? The Council recommended 5% without input tax credit on delivery services for goods ordered through an e-commerce platform. Local delivery is taxed at 18% today.
What is the ARQP scheme in GST? An optional Annual Return Quarterly Payment scheme for businesses with turnover up to ₹5 crore that sell only to unregistered buyers. The Council approved a concept note in principle; the scheme itself is still to be designed.
These are the Council's recommendations as published on 8 October 2026. Each takes effect only when the government issues the notification or circular, or Parliament and the States amend the GST Acts. Check CBIC's notifications before acting on any of them. This is an explanation, not tax advice on any case.
Sources
The rules and figures in this article can be checked against these official sources.
- Recommendations of the 57th meeting of the GST Council, 8 October 2026 GST Council
- Recommendations of the 57th Meeting of the GST Council (release of 8 October 2026) Press Information Bureau
- Next-Gen GST Process Reforms: backgrounder with GST in numbers (9 October 2026) Press Information Bureau
- Recommendations of the 56th meeting of the GST Council, September 2025 GST Council
- FAQs-2 on the decisions of the 56th GST Council: individual insurance exempt only where the insured is not a group Press Information Bureau
- Notification 76/2018-Central Tax: GSTR-3B late fee of ₹25 a day of central tax (₹10 on a nil return) GST Council
- Notification 19/2021-Central Tax: caps on the GSTR-3B late fee by turnover CBIC
- CGST Act, 2017, section 73: demands in cases not involving fraud, and the penalty on them CBIC
- CGST Act, 2017, section 16: eligibility for input tax credit CBIC
- CGST Act, 2017, section 17: blocked credits CBIC
- IGST Act, 2017, section 13: place of supply where one party is outside India CBIC
- IGST Act, 2017, section 16: zero-rated supply CBIC
- GST portal: registration, returns and payments Goods and Services Tax Network
- Tax information portal: GST Acts, rules, notifications and circulars CBIC