GST changes from November 1: How they will affect businesses
What's the story
The Goods and Services Tax (GST) system is all set to witness compliance-related changes from November 1, 2026. The reforms were announced at the 57th GST Council meeting on October 8. The main aim of these changes is to ease the compliance burden on businesses, reduce return mismatches, improve input tax credit (ITC) reconciliation, and facilitate refunds.
Form revisions
New GSTR forms to be released for public consultation
The Finance Ministry will soon release draft GSTR-1, GSTR-1A, and Invoice Furnishing Facility (IFF) forms on the myGov portal for public consultation.
The revised forms are scheduled to come into effect from April 1, 2027.
The GST Council has also given in-principle approval for an alternative return filing mechanism for businesses making only business-to-consumer (B2C) supplies, and having annual turnover below ₹5 crore.
Such businesses can file returns annually and pay taxes quarterly.
Refund reforms
Waiving late fees for small traders
The GST Council has also decided to waive late fees for small traders with a turnover of up to ₹5 crore, if they file returns within the same calendar month.
Automated sanctioning of refunds is likely to start after November 1 in applicable cases.
However, it will only cover future refund claims, not those pending from before.
E-commerce provisions
E-commerce sellers can use warehouses as principal place of business
The GST Council has proposed a provision allowing eligible sellers supplying goods through e-commerce platforms to declare the platform's warehouse as their principal place of business.
This is applicable in states where they have no physical presence.
However, state-wise registrations, returns, and tax payments would continue as required.
The provision is yet to be notified but is expected to come into effect from November 1.
Legislative amendments
Legislative amendments to be implemented on April 1, 2027
Changes requiring legislative amendments are targeted for April 1, 2027.
These include changes to arrest provisions, rationalization of prosecution thresholds, and modifications to e-way bill provisions.
The GST Council has also approved changes to strengthen checks on tax liabilities and ITC claims.
These are aimed at improving reconciliation and preventing fraudulent invoices and ITC claims at the source.