General information, not professional advice. GST rules, rates and due dates change by notification. Check the current position on the GST Portal or with your CA before you act on anything here.
Status on 13 October 2026: recommended, not in force. Everything on this page is a recommendation of the GST Council. A recommendation becomes law only when the Act or the Rules are amended, or a notification or circular is issued. Until then the existing rules apply to your bills, returns and e-way bills.
The short version
- The Council met on 8 October 2026 and recommended process reforms across registration, returns, refunds, notices, penalties, input tax credit and e-way bill checks.
- Nothing is in force yet. Each change needs an amendment to the Act or the Rules, a notification or a circular.
- The headline proposals: remove the power of arrest, prosecute only above ₹5 crore, cut the general penalty to ₹10,000 and issue no demand notice below ₹10,000 of tax.
- Three forward dates are stated: 1 November 2026 and 1 April 2027 as cut-offs for two refund changes, and the April 2027 return for a new way to correct returns.
- Some proposals add work: reverse charge and 2% TDS on more kinds of scrap, and e-invoicing for some reverse-charge purchases.
What is in force today
Nothing from this meeting, yet. The press release ends with a note that the recommendations take effect only through circulars, notifications and law amendments, and that those documents are what carry legal force. Several items, such as removing arrest, need Parliament and the state legislatures to amend the GST Acts. A few items are clarifications of how existing entries are read, and they too will be issued as circulars or notifications.
So your invoices, returns, e-way bills and input tax credit work exactly as they did last week. What changed is the direction, and for a few items, the date.
Arrest, penalties and notices
| Area | What the Council recommended |
|---|---|
| Arrest | Withdraw arrest powers under GST completely, by omitting section 69 of the CGST Act |
| Prosecution | Raise the monetary threshold from ₹1 crore to ₹5 crore and narrow the list of offences in section 132 |
| General penalty | Reduce the maximum under section 125 from ₹25,000 to ₹10,000 |
| Demand notices | No show cause notice under sections 73, 74 or 74A where the tax involved is below ₹10,000 |
| Late fee | Waive the late fee on a delayed return under section 39(1) for taxpayers with turnover up to ₹5 crore in the preceding financial year, if it is filed by the end of the month in which it was due |
| Small B2C businesses | In-principle approval of a concept note for an optional Annual Return Quarterly Payment (ARQP) scheme, for turnover up to ₹5 crore and only B2C supplies |
The details, including the reduced 5% penalty for paying quickly, are in no arrest, smaller penalties, fewer notices.
Input tax credit and refunds
- Blocked credits: amend section 17(5) to remove the restriction on credit for, among others, outdoor catering, health and life insurance, telecommunication towers, pipelines laid outside factory premises, free samples, and goods destroyed or written off on expiry of shelf life as required by law.
- Inverted duty refunds: include credit on input services, for credit availed on or after 1 November 2026.
- Capital goods: include credit on capital goods in refunds for zero-rated supplies and inverted duty, spread over 60 months, for credit availed on or after 1 April 2027.
- Faster refunds: acknowledgement in 10 days instead of 15, and, for low-risk zero-rated and inverted duty claims, 90% of the amount claimed sanctioned provisionally by the system.
More in input tax credit and refunds: what the Council proposed.
E-way bill checks
The Council recommended that a vehicle be stopped only on specific intelligence and with the authorisation of an officer of at least Joint Commissioner rank, and that states the goods merely pass through should not inspect or detain them. The e-way bill itself is not going away: goods moving without one can still be detained anywhere. See e-way bill checks are set to change.
Registration and returns
- Amendments: changes to registration details accepted automatically on the portal, except the principal place of business. Taxpayers registered under the automatic route in rule 14A get that for every field.
- Cancellation: an application in FORM GST REG-16 accepted automatically once all returns are filed and dues paid, in two phases.
- Small sellers on e-commerce platforms: a new rule 14B so a small seller of goods through e-commerce operators can register in a state where it has no physical presence by declaring the operator's warehouse as its principal place of business, where it intends to pass on not more than ₹2.5 lakh of credit a month, excluding stock transfers. Registration would be automatic, subject to conditions.
- Correcting returns: a new mechanism so that liability in GSTR-3B lines up with GSTR-1, and credit lines up with GSTR-2B. The Council recommended it from the return of April 2027, after a public consultation.
New duties to watch
Not every recommendation is a relief. Three add compliance for the businesses they touch:
- Scrap: waste and scrap of plastics, tyres, electrical and electronic goods, and used cooking oil would come under reverse charge when a registered person buys them from an unregistered person, and under TDS at 2% when a registered person sells to a registered person. This follows the model already used for metal scrap.
- E-invoicing: extend e-invoicing to supplies received from an unregistered person where tax is payable under reverse charge, and to import of services, for taxpayers with turnover of ₹5 crore and above.
- Delivery and e-commerce: a 5% rate without input tax credit on delivery services for goods ordered through an e-commerce operator. Where a delivery service, other than courier or postal, is itself supplied through an operator and the provider is not liable to register, the operator would pay the tax under section 9(5). The exemption for goods transport agency services to unregistered persons would no longer cover goods ordered through an operator.
Rates and clarifications
This was a process meeting, not a rate meeting. The rate section of the release does not touch the 5%, 18% and 40% slabs. It lists specific clarifications and entries, including:
- the toys entries cover all toys under heading 9503, such as dolls and puzzles, not only tricycles, scooters and pedal cars;
- a nil rate for psyllium (isabgol) seeds, whether fresh, chilled, frozen or dried;
- sublimation paper classified under heading 4809;
- dealers in second-hand vehicles under the margin scheme can take credit on other inputs and services such as spares, repairs, rent and advertising, but not on the vehicles themselves;
- an option to pay 5% with restricted credit on passenger transport and rental of motor vehicles with operators, where an electric vehicle is used and battery charging is included in the price;
- limited credit within the same line of business for restaurant and outdoor catering, hotel rooms up to ₹7,500 per unit per day, and gym and fitness services.
For the slabs themselves, see GST rates in India after the September 2025 change.
What to do now
- Change nothing in your billing today. Keep generating e-way bills, and keep treating blocked credits as blocked, until the amendment is notified.
- If you sell at a lower rate than you buy, keep the input service invoices behind any credit you avail on or after 1 November 2026 properly recorded with the supplier's GSTIN. That is the credit the refund change is tied to.
- If you buy scrap of the kinds listed, ask your CA how reverse charge and TDS will apply to your suppliers once notified.
- Watch for the notification, not the headline. The date in the notification is the date that binds you.
Sources
- Ministry of Finance press release, Recommendations of the 57th Meeting of the GST Council, 8 October 2026 (PIB release ID 2320934)
- The same release on the GST Council website (PDF)
- The FAQs issued with the recommendations in October 2026
We will update this page when the notifications, circulars and amendments are issued. To hear when they are, follow the AawazAI WhatsApp channel.
Bills and CA documents that follow the rules in force
AawazAI makes the GST bill, the e-invoice and the e-way bill, and prepares the GSTR-1 and GSTR-3B documents your CA files from. Your CA files, the app never does.
Frequently asked questions
Is arrest under GST abolished?
Not yet. The GST Council has recommended omitting section 69 of the CGST Act, which holds the power of arrest. That needs an amendment to the Act. Until the amendment is passed and brought into force, the existing provision stands.
Did GST rates change in the 57th Council meeting?
The slabs did not. The meeting was about process reforms. Its rate section lists clarifications and a few specific entries, such as a nil rate for psyllium seeds and an optional 5% rate for passenger transport by electric vehicle.
From when do the 57th GST Council changes apply?
Each change applies from the date in its own notification or amendment. The release states three forward dates: input service credit availed on or after 1 November 2026 and capital goods credit availed on or after 1 April 2027 for certain refunds, and the April 2027 return for the new return-correction mechanism.
What is the ARQP scheme?
Annual Return Quarterly Payment. The Council approved a concept note, in principle, for an optional scheme for taxpayers with turnover up to ₹5 crore in the preceding year who supply only to unregistered persons. The form, procedure and start date have not been given.
Do I still need an e-way bill?
Yes. The proposals change who can stop a vehicle and where, not the requirement to generate an e-way bill. Goods moving without one can still be inspected, detained or seized in any state.