57th GST Council Meeting: Focus Shifts from Tax Rates to Credit Protection, Refunds and Easier Compliance
The 57th GST Council meeting took place on 8 October 2026 in New Delhi. No changes to GST rates were expected. The focus was on procedure: how tax is filed, checked and refunded.
Input tax credit (ITC) protection: A buyer who holds a valid invoice and acted honestly would not lose credit just because the supplier failed to deposit the tax. The tax would be recovered from the supplier, unless the buyer was part of the fraud. ITC may also be allowed on GST paid for employees' group life and health insurance (today 18% GST with no credit).
Faster refunds: A risk-scoring system would release low-risk refund claims automatically when they match the taxpayer's records. Claims that do not match would get closer checks.
Exports by global capability centres: Some services that Indian centres provide to their foreign group companies are taxed at 18% today. A change could treat them as exports, making them GST-free with input tax refunds.
Easier registration and fewer disputes: a guided one-time application form, applying in several states together, a quarterly payment option for some small businesses, and no notices for tax demands below ₹10,000.
Other items: arrest only with a court order, a higher prosecution threshold, vehicle checks only with a senior officer's prior approval, and a uniform 5% GST (without ITC) on delivery of goods ordered through e-commerce platforms.
The GST Council (Article 279A)
The GST Council is the joint body of the Centre and the states that decides the main features of GST: rates, exemptions, rules and changes to the GST laws. It was created by Article 279A of the Constitution, added by the 101st Constitutional Amendment Act, 2016. Since both the Centre and the states give up some of their own taxing freedom to it, the Council is the best-known example of cooperative federalism in India.
After a major rate reform in 2025, the Council is now using its power over GST rules and procedure. Most of its proposals, such as ITC protection and changes to arrest powers, need amendments to the CGST and SGST Acts after the Council recommends them.
Input Tax Credit (ITC) Mechanism Under GST
Input tax credit is the heart of GST. When a business buys goods or services, it pays GST on them. When it sells its own product, it can subtract the GST already paid on its purchases from the GST it owes on its sales. This way tax is charged only on the value added at each step, and "tax on tax" is avoided.
Protecting the ITC of buyers who acted in good faith, and allowing ITC on employee group insurance, would both change how the ITC rules work in practice. Both are aimed at reducing disputes and freeing up businesses' working capital.
Inverted Duty Structure Under GST
An inverted duty structure is when the GST on what a business buys (its inputs) is higher than the GST on what it sells (its output). For example, a fabric maker may pay 18% GST on dyes but charge only 5% on fabric. Because it collects less tax than it has already paid, unused credit piles up. The law allows such businesses to claim this blocked credit back as a refund.
The new risk-scoring proposal would auto-release low-risk refund claims, including those from inverted duty structures and exports. It builds on the 2025 provisional refund system and aims to speed up the cash flow of businesses.
- 57th GST Council meeting: 8 October 2026, Bharat Mandapam, New Delhi; no rate changes on the agenda
- Current GST structure (since 22 September 2025): 5% merit rate, 18% standard rate, 40% for select luxury and demerit goods
- Employee group life and health insurance: 18% GST, no ITC today
- Proposed: no tax notices for demands below ₹10,000
- Proposed: uniform 5% GST, without ITC, on delivery of goods ordered through e-commerce platforms
- Precious metals: proposal to withdraw the IGST exemption for specified banks and agencies importing gold, silver and platinum (which attract 3% IGST)
- ITC: Section 16 (conditions), Section 17(5) (blocked credits), CGST Act, 2017
- Refunds: Section 54(3) (unused ITC), Section 54(6) (provisional refund), Section 56 (interest up to 6%)
- VKC Footsteps case: 13 September 2021