Rates: no changes
No rate changes this time; the Council plans to review rates once a year at a dedicated meeting. The GST 2.0 structure (5%, 18% and 40%) that took effect on 22 September 2025 stays. E-commerce delivery services move to 5% without input tax credit.
Enforcement: softer
- Arrest power under section 69 of the CGST Act to be removed.
- Prosecution threshold raised from ₹1 crore to ₹5 crore.
- General penalty reduced from ₹25,000 to ₹10,000.
- No show-cause notice for demands below ₹10,000; pre-deposit for penalty-only appeals capped.
Input tax credit: fewer blocks
Credit blocks are to be removed for outdoor catering, life and health insurance, telecom towers, pipelines outside the factory, free samples and statutory write-offs.
Refunds and compliance
- Inverted-duty refunds to cover input services, and later capital goods; most eligible refunds to be sanctioned provisionally.
- Most routine registration amendments to be approved automatically; simpler registration for small e-commerce sellers.
- Late-fee waiver for smaller taxpayers filing within the due month; a GSTR-1 / GSTR-3B mismatch mechanism from the April 2027 return period.
- E-invoicing extended to imports of services and certain reverse-charge supplies.
When it takes effect
These are recommendations. Removing arrest powers and changing prosecution thresholds and ITC blocks needs amendments to the CGST Act — expected in Parliament’s Winter Session — and other changes need notifications. Reports differ on start dates (some refund changes are reported from 1 November 2026, others from 1 April 2027), so wait for the notifications before changing invoices or claims.
Exporting services or running an inverted duty structure? See GST advisory.
Frequently asked questions
Did the 57th GST Council change GST rates?
Has the GST arrest power been removed?
Can businesses claim ITC on health insurance now?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.