GST Process Reforms: Easier Registration for Small Online Sellers and Faster Refunds from 1 November
Several GST process reforms recommended by the 57th GST Council meeting (held on 8 October 2026 in New Delhi) are set to take effect from 1 November 2026.
The legal department has cleared the notifications (legal orders) and circulars (official explanations) needed to bring these changes into force.
Small sellers on e-commerce platforms will get a simple, automatic GST registration in states where they have no shop or office of their own. They can show the platform's warehouse in that state as their main place of business. This is done through a new rule 14B in the CGST Rules, 2017.
This easy route is for small sellers who pass on input tax credit (ITC) of not more than ₹2.5 lakh a month to their buyers.
Refunds will be faster and more automatic. For example, refunds of extra cash lying in a business's GST cash account will be cleared fully by the system, and 90% of refunds for exports and for the inverted duty structure will be paid on a provisional basis by the system after a risk check.
The aim is to make doing business easier and to stop the money of small businesses and exporters getting stuck with the government.
Tax Collected at Source (TCS) by E-Commerce Operators under GST (Section 52)
Tax Collected at Source, or TCS, under GST is a small amount that an online shopping platform must hold back from the money it pays to the sellers on its platform, and deposit with the government. The rule is in Section 52 of the Central Goods and Services Tax (CGST) Act, 2017. The platform is called an e-commerce operator (ECO): for example, a marketplace like Amazon, Flipkart or Meesho. TCS is not an extra tax. It is an advance part of the seller's own GST, which the seller later uses to pay its tax bill.
Because of Section 52 and Section 24(ix), selling goods online across states has always meant registering in each state, often with a physical office there. The new rule 14B lets small online sellers register automatically in another state by using the platform's warehouse as their address. This removes one of the biggest barriers that Section 52-linked registration rules created for small sellers.
GST Registration Under the CGST Act
GST registration is the process by which a business gets recorded with the tax department and receives a 15-character number called the GSTIN (Goods and Services Tax Identification Number). Only a registered business can legally collect GST from customers, pass on input tax credit to its buyers and claim refunds. Registration is state-wise: a business needs a separate registration in each state from which it supplies, usually tied to a "principal place of business" there.
The easier registration for small e-commerce sellers coming into effect from 1 November is the rule 14B change. It lets a small seller in one state reach buyers in other states through a platform's warehouses, without opening an office in each state.
GST Refund Mechanism (Section 54, CGST Act)
A GST refund is money the government pays back to a business when it has paid more tax than it owed, or has built up tax credit it cannot use. The rules are in Section 54 of the CGST Act, 2017. Common cases are exports (which are "zero-rated", so the exporter gets back the GST paid on inputs), the inverted duty structure (where the GST on inputs is higher than the GST on the final product), and extra cash lying in the GST cash ledger. Fast refunds matter because money stuck with the government is money the business cannot use to buy raw material or pay workers.
The faster refunds taking effect from 1 November come from these Council recommendations. By shifting refunds from officers to the system, the reforms aim to release exporters' and manufacturers' money faster and to reduce delays and disputes.
- 57th GST Council meeting: 8 October 2026, New Delhi, chaired by the Union Finance Minister
- Reforms expected to take effect from: 1 November 2026
- New rule 14B, CGST Rules, 2017: simplified, automatic registration for small sellers of goods on e-commerce platforms, using the platform's warehouse as the principal place of business
- ITC limit for the easy route: not more than ₹2.5 lakh a month (rule 14A and rule 14B)
- Rule 14A automatic registration in place since 1 November 2025
- Refund acknowledgement time: cut from 15 days to 10 days
- Provisional refund for zero-rated supplies and inverted duty structure: 90% sanctioned by the system
- Minimum refund threshold: ₹1,000, applied to CGST + SGST/UTGST + IGST together
- TCS by e-commerce operators (Section 52): 0.5% since 10 July 2024 (earlier 1%); in force since 1 October 2018
- Compulsory registration for online sellers: Section 24(ix), CGST Act; relaxed for intra-state goods sellers from 1 October 2023