GST Amendments under Finance Bill 2026: What Businesses Need to Know
The Finance Bill, 2026 introduces a series of important amendments to the Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017, aimed at easing compliance, improving liquidity, and addressing long-standing industry concerns.
Unless otherwise specified, these amendments will come into effect from the date to be notified, preferably concurrently with similar amendments passed by States and Union Territories.
I. Amendments in the CGST Act, 2017
1. Relief on Post-Sale Discounts (Section 15)
Sub-section (3) of Section 15 has been amended to remove the requirement that post-sale discounts must be linked to a pre-existing agreement. The amendment now refers to the issuance of a credit note under Section 34, provided the recipient reverses the corresponding input tax credit (ITC).
Impact: This change offers greater commercial flexibility and reduces disputes on valuation.
2. Alignment of Section 34 with Section 15
Section 34 has been amended to explicitly reference Section 15 , ensuring consistency between valuation provisions and the credit note mechanism.
Impact: Improves legal clarity and reduces interpretational conflicts.
3. Provisional Refunds for Inverted Duty Structure
Sub-section (6) of Section 54 has been amended to extend provisional refund benefits to refunds arising from an inverted duty structure.
Impact: Enhances cash flow for businesses facing an accumulation of ITC due to higher input tax rates.
4. Removal of Refund Threshold for Exporters
Sub-section (14) of Section 54 removes the threshold limit for sanctioning refund claims in cases where goods are exported out of India on payment of tax.
Impact: Faster and smoother refund processing for exporters, regardless of refund amount.
5. Interim Appellate Mechanism Pending National Tribunal
A new sub-section (1A) has been inserted in Section 101A, empowering the Central Government to authorise an existing authority or tribunal to hear appeals under Section 101B until the National Appellate Authority is constituted.
An explanation clarifies that "existing authority" includes a tribunal.
Effective Date: 1 April 2026
Impact: Prevents appellate vacuum and ensures continuity in dispute resolution.
II. Amendments in the IGST Act, 2017
Place of Supply for Intermediary Services Revised
Clause (b) of sub-section (8) of Section 13 of the IGST Act is proposed to be omitted. As a result, the place of supply for intermediary services will now be determined under the default rule in Section 13(2) , i.e., the location of the recipient of services.
Impact: A significant shift benefiting cross-border service providers by potentially treating such supplies as exports, thereby reducing tax burden and litigation.
Conclusion
The GST amendments proposed in the Finance Bill, 2026 signal a move towards simplification, taxpayer relief, and improved dispute resolution. From easing post-sale discount compliance to addressing refund bottlenecks and redefining intermediary services taxation, these changes are expected to have a substantial impact on businesses, exporters, and service providers.
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