India’s GST Council met for its 57th session on September 12, 2026, taking up proposals on input tax credit protection, corporate guarantees, blocked credit and registration refunds, as the government continues refining the GST 2.0 framework introduced a year earlier. The meeting builds on Finance Act 2026 amendments that reworked provisions governing post-supply discounts, credit notes, provisional refunds and appellate arrangements.
Among the most consequential changes, the Finance Act 2026 amended Section 54 of the CGST Act to widen risk-based provisional refunds, with the government aiming to sanction a larger share of low-risk claims, including inverted duty structure refunds, excess cash-ledger balances and excess tax payments, on an automated, system-trust basis. The Act also omitted Section 13(8)(b) of the IGST Act, which had governed the place of supply for intermediary services, a change with direct implications for India’s IT and business process outsourcing exporters.
What Changed in GST Refund Processing?
The amended Section 54 framework shifts a larger share of refund processing toward automated, system-trust sanctioning for claims classified as low-risk, cutting down on manual scrutiny and the delays that have historically frustrated exporters and manufacturers awaiting inverted duty structure refunds. Businesses with clean compliance records and consistent filing histories are expected to see refunds credited faster, while claims flagged as higher-risk will continue to undergo fuller verification.
How Does This Affect IT and Services Exporters?
The omission of Section 13(8)(b) of the IGST Act removes a provision that had treated certain intermediary services as supplied within India for tax purposes, even when the end client was overseas. Industry bodies representing IT-enabled services and business process outsourcing firms had long argued this classification denied them export status and associated GST benefits on genuinely cross-border services. Its removal is expected to simplify compliance and improve the competitiveness of Indian services exporters in global markets.
Market and Trade Reaction
Tax practitioners and industry chambers have broadly welcomed the refund process changes as a long-requested reform, though some have cautioned that the actual speed-up will depend on how strictly GST Network systems classify claims as low-risk versus high-risk. Exporter associations have specifically flagged the Section 13(8)(b) omission as a significant win for the services sector, which has pushed for this change since GST 2.0 rules first came into effect in September 2025.
What Happens Next?
The GST Council is expected to issue detailed notifications and circulars operationalising the 57th meeting’s decisions in the coming weeks, with the GST Network required to update its refund-processing algorithms to reflect the new risk-based framework. Businesses and tax consultants will be watching implementation timelines closely, particularly around how quickly provisional refunds begin flowing under the revised Section 54 provisions.
Frequently Asked Questions
What did the 57th GST Council meeting discuss?
The September 12, 2026 meeting covered input tax credit protection, corporate guarantees, blocked credit and registration refund proposals, building on Finance Act 2026 amendments to GST law.
How does the Finance Act 2026 change GST refunds?
It amends Section 54 of the CGST Act to widen risk-based provisional refunds, aiming to sanction more low-risk claims through an automated, system-trust process rather than manual scrutiny.
Why does the Section 13(8)(b) change matter for exporters?
Removing Section 13(8)(b) of the IGST Act ends a rule that denied export status to certain intermediary services, benefiting India’s IT and business process outsourcing exporters.
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