GST Council to hold 57th meet on Sept 12
The GST Council will hold its 57th meeting on September 12, 2026 in New Delhi, preceded by an Officers' Meeting on September 11
The agenda includes proposals for easier access to input tax credit (ITC) for buyers and a simplified valuation treatment for corporate guarantees between related parties
A proposal under discussion would let small businesses register more easily across multiple states, addressing a long-standing compliance pain point
The meeting comes nearly a year after the Council's previous (56th) meeting, and is expected to take up unresolved issues affecting business working capital and compliance costs
The GST Council (Article 279A)
The GST Council is a constitutional body inserted via Article 279A by the 101st Constitutional Amendment Act, 2016 — the same amendment that introduced the Goods and Services Tax regime. It is the key institutional expression of "cooperative federalism" in Indian fiscal policy, since indirect taxation now requires joint Centre-State decision-making instead of being a purely Union or State subject.
Key Details
- Constituted in September 2016; GST itself came into force July 1, 2017
- Chaired by the Union Finance Minister; members include the Union Minister of State for Finance and the Finance/Taxation Minister of every state and UT (with legislature)
- Voting weights: Centre has 1/3 of votes, States collectively have 2/3; a decision requires a three-fourths majority of weighted votes cast
- Functions: recommends tax rates, exemptions, model GST laws, and dispute resolution mechanisms
The 57th meeting itself is an exercise of the Council's Article 279A recommendatory power — any decision on ITC rules, corporate guarantee valuation, or registration procedure must go through this same Centre-State weighted-voting mechanism before becoming law.
Input Tax Credit (ITC) Mechanism — Section 16, CGST Act
ITC is the backbone of GST's "value-added" design: a registered person can set off the GST paid on inputs (purchases) against the GST liability on outputs (sales), so tax is levied only on the value added at each stage. Restricting or easing ITC access directly affects a business's working capital, since blocked or delayed credit locks up cash that would otherwise be available for operations.
Key Details
- Section 16 of the CGST Act lays down the conditions for claiming ITC: possession of a valid tax invoice, receipt of goods/services, actual tax payment to the government by the supplier, and filing of returns
- Section 17(5) lists "blocked credits" — categories where ITC cannot be claimed even if conditions are met (e.g., motor vehicles for personal use, club memberships)
- Mismatches between a supplier's outward-supply filing (GSTR-1) and a buyer's claimed credit (GSTR-3B/2B) are a major source of ITC disputes and litigation
Proposals to make ITC access "easier for buyers" likely target procedural friction — invoice-matching mismatches and credit blockage — that currently forces businesses to pay tax twice in effect (once as ITC held up, once in fresh output liability), squeezing working capital.
Corporate Guarantee Valuation — Rule 28(2), CGST Rules
When a company provides a corporate guarantee to a bank or financial institution on behalf of a related party (e.g., a subsidiary), GST law treats this as a "supply of service" that must be valued and taxed, even where no explicit fee is charged, because related-party transactions are specifically brought within the GST net to prevent value understatement.
Key Details
- Rule 28(2) of the CGST Rules, effective from October 26, 2023, deems the value of such a corporate guarantee to be 1% of the guaranteed amount per annum, or the actual consideration charged, whichever is higher
- CBIC Circular No. 204/16/2023-GST (October 27, 2023) clarified that a personal guarantee given by a director (as opposed to a corporate guarantee) has "Nil" value if no consideration is charged, and hence attracts no GST
- The rule caused disputes because group companies with multiple guarantees (e.g., one guarantee amended or renewed each year) faced repeated valuation and litigation
The proposal for "simplified corporate guarantee treatment" is aimed at resolving the compliance and litigation burden this 2023 valuation rule created for corporate groups, particularly around bank guarantees issued for subsidiaries.
GST Registration — Section 22 and the Multi-State Compliance Burden
GST registration in India is state-wise, not PAN-wise: a business with establishments in different states must obtain a separate GSTIN (registration) in each state, even though the entity and PAN are the same. This is one of the most-cited compliance burdens for small and medium businesses expanding beyond their home state.
Key Details
- Section 22 of the CGST Act sets turnover thresholds for mandatory registration — ₹40 lakh for goods suppliers in most states, ₹20 lakh for services, and ₹10-20 lakh (with local variation) for special category North-Eastern and hill states
- The Composition Scheme (Section 10) allows small taxpayers to pay tax at a lower flat rate with simplified compliance — thresholds are ₹1.5 crore for goods and ₹50 lakh for services
- Aggregate turnover for threshold purposes is computed PAN-wide across all states, even though registration itself is separate for each state
The proposal to let small businesses "register in multiple states more easily" targets this state-wise registration architecture, which raises compliance costs disproportionately for smaller firms expanding operations across state lines.
- 57th GST Council meeting: September 12, 2026, New Delhi; Officers' Meeting a day earlier on September 11
- GST Council established under Article 279A, inserted by the 101st Constitutional Amendment Act, 2016; GST rolled out July 1, 2017
- Council voting: Centre 1/3 weight, States 2/3 weight; decisions need three-fourths weighted majority
- Corporate guarantee deemed valuation: 1% of guaranteed amount per annum (Rule 28(2) CGST Rules, effective October 26, 2023)
- GST registration turnover thresholds: ₹40 lakh (goods, most states), ₹20 lakh (services), lower thresholds for special category states
- Composition scheme thresholds: ₹1.5 crore (goods), ₹50 lakh (services)
- This meeting follows roughly a one-year gap since the 56th GST Council meeting (September 2025), which had approved the GST 2.0 rate rationalization into a simplified two-slab (5%/18%) structure with a 40% demerit rate for sin/luxury goods