57th GST Council Meeting: Process Reforms for Registration, Refunds, Arrests and Service Exports
The GST Council met for the 57th time on 8 October 2026 in New Delhi. Tax rates were not discussed. The meeting focused on process reforms (changes in how the tax is run, not how much tax is charged).
Registration: about 61% of applicants already get automatic registration within three working days. The new system will avoid needless queries and rejections for low-risk applicants. Small sellers on e-commerce platforms will need to register only in their home State, not in every State they sell to.
Refunds and credit: refund acknowledgement time will fall from 15 days to 10 days, and 90% of refund claims will be released within three working days after a risk check using Customs and banking data. Business expenses such as employee health and life insurance will become eligible for input tax credit (the credit a business gets for GST it paid on its purchases).
Enforcement eased: the Council recommended removing the arrest powers of GST officers, raising the prosecution threshold from ₹1 crore to ₹5 crore, and cutting the general penalty from ₹25,000 to ₹10,000. No notice will be sent for tax below ₹10,000, and pending notices below this amount will be withdrawn. Only officers of the origin or destination State can stop inter-State goods, and only with Joint Commissioner approval and specific intelligence.
Service exports: services sold to foreign clients through overseas branches, and testing, repair, certification and research done in India for foreign clients (even if the goods never leave India), will count as exports. The date of receipt of export payment will follow RBI rules.
An optional annual return for B2C (business-to-consumer) firms with turnover up to ₹5 crore got in-principle approval and will be taken up again. All approved changes are to apply from 1 April 2027. Rates will now be reviewed once a year, with changes applying from 1 April of the next financial year.
The GST Council (Article 279A)
The GST Council is the joint body of the Union and all the States that runs India's Goods and Services Tax (GST). It was created by Article 279A, which was added by the 101st Constitutional Amendment Act, 2016. It recommends tax rates, exemptions, thresholds and the rules of procedure for GST. Think of it as a "joint family meeting" where the Centre and every State decide together how a shared tax will work.
The 57th meeting shows the Council moving from rate-setting to fixing how GST is administered. The arrest, penalty, registration and refund changes are recommendations; the Centre and the States now have to change their laws and rules so they can apply from 1 April 2027.
Input Tax Credit (ITC) Mechanism Under GST
Input tax credit is the system that stops "tax on tax" in GST. When a business buys inputs, it pays GST on them. When it sells its own goods or services, it can subtract the GST already paid on inputs from the GST it owes. So tax falls only on the value added at each step. Without ITC, prices would keep rising as the same tax piled up at every stage.
The Council has decided to make normal business expenses, including employee health and life insurance, eligible for ITC, which means narrowing the blocked-credit list. It has also asked its officers' committee to solve the problem of credit being denied because of a supplier's default, with a decision aimed at 1 April 2027.
GST Act Provisions on Offences and Arrests
The GST law punishes wrongdoing in two ways. The first is money punishment: tax demand, interest and penalty, decided by tax officers. The second is criminal punishment: jail after a trial in a criminal court, called prosecution. Jail is meant only for serious fraud, such as fake invoices or large tax evasion.
By taking away arrest powers and lifting the prosecution bar, the Council wants routine disputes (on classification, valuation or credit) to stay as civil tax matters, not criminal cases. The change needs amendments to the CGST Act and the State GST Acts.
Zero-Rated Supplies Under GST: Exports and SEZ Supplies
A zero-rated supply is a sale on which the final GST burden is zero, while the seller can still recover the GST paid on inputs. Under Section 16 of the Integrated GST (IGST) Act, 2017, only two kinds of supply are zero-rated: exports of goods or services, and supplies to Special Economic Zones (SEZs). The idea is simple: India should export goods and services, not taxes.
The Council has decided that services sold through overseas branches, and testing, repair, certification and research done in India for foreign clients, will count as exports. This brings them under zero-rating, so exporters can recover their tax, and faster.
- 57th GST Council meeting: 8 October 2026, Bharat Mandapam, New Delhi; no rate changes discussed
- Previous big rate rationalisation: September 2025 (fewer GST slabs)
- All approved process reforms to apply from 1 April 2027; rates to be reviewed once a year, effective 1 April
- Automatic registration within 3 working days for about 61% of taxpayers
- Refund acknowledgement: 15 days → 10 days; 90% of refunds within 3 working days of acknowledgement
- Optional annual return for B2C firms up to ₹5 crore turnover: in-principle approval
- Prosecution threshold: ₹1 crore → ₹5 crore; general penalty ₹25,000 → ₹10,000; arrest powers to be removed
- No notices for tax below ₹10,000; pending notices below this to be withdrawn
- Faceless assessment to be rolled out for Central GST taxpayers, on the income tax model
- GST Council: Article 279A, 101st Amendment Act, 2016; decisions by three-fourths weighted vote (Centre 1/3, States 2/3)