57th GST Council Meeting: Key Changes Beyond Refunds

Meeting date: 8 October 2026 | Theme: Ease of Doing Business

The 57th GST Council meeting did not stop at refund reforms. It also made a wide set of recommendations on e-way bill checks, registration, return corrections, notices and penalties, prosecution, exports, and the GST treatment of specific goods and services. This blog summarises these changes in simple language.

Please note: These are currently recommendations of the GST Council. They become law only after the relevant notification, circular or legal amendment is issued. Dates mentioned are target dates, and the final effective date will be set in the notification.

1. Relief in Goods Transport and E-Way Bill Checks

When a vehicle can be stopped: A vehicle carrying goods can be stopped only on specific intelligence, and only with the approval of an officer of Joint Commissioner rank or above.

Where inspection can happen: Inspection, detention or seizure can be done only in the state where the supplier or the recipient is registered or located. If goods are only passing through a state (transit), the vehicle will not normally be stopped there for inspection.

No confiscation during transit: An amendment is recommended so that confiscation under Section 130 does not apply to goods or vehicles during transit.

Exception: These protections will not apply if the e-way bill has not been generated, or if the required documents showing origin and destination are not in the vehicle. In that case, officers can inspect, detain or seize in any state.

2. Simpler Registration for E-Commerce Sellers

What changes: Small traders who do not have a physical shop or office in another state can easily get GST registration there to sell through an E-commerce Operator (ECO).

What it means: They can declare the ECO's warehouse as their Principal Place of Business (PPoB) in that state. The limit on ITC transferred per month is Rs. 2.5 lakh (stock transfers between separately registered business units are excluded). If the conditions are met, the system will grant registration automatically.

Simple example: A small trader from Gujarat wants to sell in Maharashtra through Amazon or Flipkart. Without opening a shop in Maharashtra, the trader can declare the ECO's warehouse as PPoB and get registered easily.

3. Easier GST Registration Process

Detailed circulars and FAQs on the documents needed for registration will be issued separately.

Amendments in registration, except a change of the Principal Place of Business, are recommended to be approved automatically.

4. Changes in GST Registration Cancellation

Voluntary cancellation will be automatic: After all returns are filed and dues are paid, the system will process cancellation automatically. Filing the final return in GSTR-10 within the time limit remains compulsory.

Suo-moto cancellation by the officer: Some existing grounds in Rule 21 will be removed. Under Rules 21A and 22, the process for cancellation due to non-filing of returns or not providing bank account details will become system-based. A new Rule 23A is proposed: if the taxpayer corrects the default within the time limit, the decision not to cancel, or to restore the registration, will be taken by the system. The officer interface is removed from this process.

5. New System for Correcting Liability and ITC in Returns

GSTR-1 / GSTR-1A / IFF corrections: Reconciling sales details with the tax liability shown in GSTR-3B will become easier, so mismatches should reduce.

New Rule 86D, RCM Statement: The portal will provide an electronic statement of tax paid under reverse charge and ITC claimed on it, to help report RCM correctly.

Rule 61(1A), correcting tax liability: A facility to report and correct differences in tax liability between GSTR-1 / 1A / IFF and GSTR-3B.

DRC-03: When paying tax through DRC-03, details of the related original invoices will have to be provided.

Rule 60(6A), Invoice Management System (IMS): The recipient can Accept, Reject or keep Pending the invoices and documents received on the portal, and this will help prepare the ITC details in GSTR-2B. Conditions will apply on how long a Credit Note can be kept pending.

New Rule 86C, ITC Reversal and Reclaim Statement: The portal will provide an electronic statement of ITC reversed and reclaimed, so GSTR-3B reporting is accurate.

Rule 61(1B), correcting ITC: A facility for proper reporting and correction when ITC claimed in GSTR-3B does not match ITC available in GSTR-2B.

Impact: Fewer mismatches between GSTR-1 and GSTR-3B, simpler RCM and ITC reversal reporting, more organised verification of purchase invoices, and fewer notices caused by wrong reporting.

When it applies: The Council recommends that this whole system apply from returns of April 2027, after public consultation and the approval of the Finance Minister. This date is also only a recommendation at present.

6. Relief in Show Cause Notice and Penalty

No Show Cause Notice for small amounts: A proposal not to issue a Show Cause Notice where the total tax (CGST + SGST + IGST + CESS) is below Rs. 10,000.

Lower penalty on quick payment: In non-fraud cases, if tax and interest are paid within 30 days of the order under Section 73, or within 60 days under Section 74A, the penalty will be 5% (currently 10%).

Minimum penalty removed: The Rs. 10,000 minimum penalty condition is proposed to be removed in non-fraud cases.

7. Export and Zero-Rated Supply Clarifications

Services to a foreign branch: An amendment to Section 2(6) of the IGST Act is recommended to remove one condition. Currently, the supplier and the recipient must not be the same person with different establishments. After the change, services provided by an Indian company to its foreign branch or office can also qualify as export of services, if the remaining conditions are met.

Payment in foreign exchange or Indian rupees: A separate circular is recommended on the conditions where payment for export of goods or services is received in Indian rupees, as permitted by RBI.

Services on goods supplied by a foreign customer: Section 13(3)(a) of the IGST Act is recommended to be removed. Where the customer supplies the goods needed for the service, the general rule of Section 13(2)