GST Council announces fresh changes to simplify tax rules and ease refunds

UPDATE - follow-up to GST Council scraps arrest powers of GST officers, ups prosecution threshold to ₹5 crore: The GST Council has approved a wide range of new reforms in its 57th meeting held in New Delhi on Thursday, October 8, 2026, aimed at making tax rules simpler and cutting down tax disputes.

Key Reforms

Union Finance Minister Nirmala Sitharaman stated that 99 percent of problems linked to GST rates and processes are now resolved, while adding that the door remains open for future changes. All these new measures are slated to start from April 1, 2027. The Council did not alter any tax rates during this session, and rate reviews will now take place only once every year ahead of the new financial year. Meanwhile, the Central government plans to launch a faceless assessment system for Central GST, modeled after the income tax system, with a public framework to be released before the 2027 Budget.

Business Relief

Registration rules have been updated so that low-risk taxpayers face fewer queries, while small e-commerce sellers can now register in just a single State. Businesses with a turnover of up to ₹5 crore supplying to consumers may soon get the option to file returns once a year instead of quarterly, pending final approval at the next meeting. Tax refunds will now be acknowledged within 10 days instead of 15, with 90 percent of claims expected to be cleared within three working days. The Council also allowed input tax credits for employee health and life insurance, while input services become eligible for refunds under the inverted duty structure starting November 1, 2026. Notices for tax amounts under ₹10,000 will no longer be sent, and older notices below this limit will be dropped.

Context

These tax changes form part of a broader nationwide effort to reduce the compliance burden on smaller companies and minimize courtroom litigation. Streamlining input tax credits and easing rules around goods movement are key steps designed to foster greater trust between tax authorities and business owners.