The Central Government has issued a series of GST notifications dated October 27, 2026, introducing amendments to various provisions governing GST rates, input tax credit (ITC), delivery services and reverse charge liability. The notifications amend existing rate notifications under the Central Goods and Services Tax (CGST), Integrated Goods and Services Tax (IGST) and Union Territory Goods and Services Tax (UTGST) frameworks.
The amendments are scheduled to come into effect from November 1, 2026, making it important for businesses, tax professionals, service providers and GST practitioners to review the revised provisions before the effective date.
The changes cover several service categories, including hotel accommodation, restaurant services, outdoor catering, electric vehicle transportation and rental, and certain delivery services. The notifications also address tax treatment under reverse charge and operation and maintenance services supplied by concessionaires under specified concession agreements.
1. GST Rate Notifications Introduce Changes to ITC Conditions
Notification No. 06/2026-Central Tax (Rate), dated October 27, 2026, amends Notification No. 11/2017-Central Tax (Rate), originally issued on June 28, 2017.
The corresponding Notification No. 06/2026-Integrated Tax (Rate) amends the existing IGST rate notification. Related amendments have also been issued under the Union Territory tax framework.
These changes revise the conditions governing input tax credit for specified services, particularly where a supplier procures services from another supplier operating in the same line of business.
Hotel accommodation services
The amended provisions address ITC eligibility for hotel accommodation services. Where a supplier charges tax at a concessional rate, the credit available on qualifying input services procured from another supplier in the same line of business is subject to the prescribed limits.
For example, the Central Tax (Rate) notification illustrates a situation in which a hotel accommodation service provider procures accommodation for ₹10,000 and pays central tax of ₹900 at 9%. If the provider subsequently charges its customer central tax at 2.5%, the ITC on the qualifying input service is restricted to ₹250, representing 2.5% of ₹10,000, rather than the entire ₹900.
The corresponding IGST provision uses a 5% limit in its illustration. Accordingly, businesses should examine the applicable tax type and rate conditions rather than assume that the same percentage applies across all transactions.
Restaurant and outdoor catering services
The amendments also revise ITC-related conditions for restaurant services and outdoor catering.
For specified restaurant services, the notification clarifies the treatment of input tax credit on services procured from another provider in the same line of business.
For outdoor catering, the amended provisions prescribe a limit on ITC for qualifying input services where the supplier charges tax at a rate higher than the applicable concessional rate.
The Central Tax (Rate) notification provides an illustration involving an outdoor catering service procured for ₹60,000. Where the subcontracted caterer charges central tax at 9% and the principal supplier charges central tax at 2.5%, the eligible ITC on that input service is limited to ₹1,500, rather than the full ₹5,400 charged by the subcontracted caterer.
These provisions make it important for catering businesses and other affected service providers to review their input tax credit calculations and pricing arrangements.
2. Electric Vehicle Transportation and Rental Services Covered
The amended rate notifications introduce specific entries for certain services involving electrically operated vehicles where the cost of battery charging is included in the consideration charged to the customer.
The specified services include:
- Transportation of passengers using electrically operated vehicles.
- Renting electrically operated vehicles designed for passenger transportation.
- Renting electrically operated vehicles for the transportation of goods.
The relevant entries prescribe a 2.5% rate under the Central Tax (Rate) notification and a 5% rate under the corresponding Integrated Tax (Rate) notification, subject to the conditions specified in the respective entries.
The amendments also address ITC on input services procured from another supplier in the same line of business.
For example, the Central Tax (Rate) notification considers a passenger transportation service priced at ₹1,000. The supplier hires an electrically operated vehicle with an operator for ₹800 and pays central tax of ₹72 at 9%. If the supplier charges the customer central tax at 2.5%, the eligible ITC on the qualifying input service is limited to ₹20, calculated at 2.5% of ₹800.
The notification defines an electrically operated vehicle as a road vehicle that runs solely on electrical energy derived from an external source or from one or more batteries fitted to the vehicle. The definition also includes electric bicycles.
Businesses providing electric mobility and vehicle rental services should review the relevant rate entries, the treatment of battery charging costs and the applicable ITC restrictions.
3. Amendments to Delivery Service Provisions
The notifications also revise provisions relating to specified delivery services supplied through electronic commerce operators.
The amended entries address delivery services other than those already covered under specified categories, including certain services supplied through an electronic commerce operator where the supplier is not liable for registration under Section 22(1) of the CGST Act, 2017.
The revised provisions prescribe a 2.5% rate under the Central Tax (Rate) notification and a 5% rate under the corresponding Integrated Tax (Rate) notification for the specified category, subject to the applicable conditions.
The amended entries also provide that input tax credit on goods and services used in supplying the covered delivery services shall not be taken.
The notifications further revise the wording of specified provisions relating to delivery services under the relevant reverse charge framework, including the treatment of services supplied through electronic commerce operators and the applicable registration conditions.
Businesses operating in the delivery and e-commerce ecosystem should therefore assess the nature of their services, their registration status and the specific provisions applicable to their transactions.
4. Changes to Reverse Charge Provisions
The Gazette also contains amendments to the existing reverse charge notifications under the CGST, IGST and UTGST frameworks.
Notification No. 08/2026-Central Tax (Rate), dated October 27, 2026, substitutes the figure “6” with “9” against serial number 15 in the relevant table of Notification No. 13/2017-Central Tax (Rate).
The corresponding Notification No. 08/2026-Union Territory Tax (Rate) makes the same numerical substitution in the relevant UTGST notification.
Notification No. 08/2026-Integrated Tax (Rate) substitutes “12” with “18” against serial number 17 in Notification No. 10/2017-Integrated Tax (Rate).
These amendments take effect from November 1, 2026. Businesses affected by the relevant reverse charge entries should verify the applicable service category and revise their tax calculations and accounting processes accordingly.
5. Operation and Maintenance Services Under Concession Agreements
Notification No. 10/2026-Union Territory Tax (Rate) introduces a specific provision for concessionaires supplying operation and maintenance services to a concessioning authority during the concession period.
The notification covers concessionaires operating under a concession agreement based on the Toll-Operate-Transfer model, where the concessionaire receives exclusive rights to demand, collect and appropriate tolls for a road or highway and is required to operate and maintain the infrastructure during the concession period.
Under the notification, the specified registered persons are required to pay Union Territory tax on the amount charged or debited from the escrow account maintained under the concession agreement towards operation and maintenance expenses during the tax period in which the expenditure is charged or debited.
The notification also defines the terms “Concession Agreement” and “Concessioning Authority” for this purpose.
Concessionaires and relevant authorities should review their escrow account arrangements and the timing of tax liability to ensure compliance with the new provision.
6. What Businesses and Tax Professionals Should Review Before November 1
With the amendments scheduled to take effect from November 1, 2026, affected taxpayers should consider the following steps:
- Review applicable GST rates: Identify the revised entries relevant to the services supplied or procured by the business.
- Reassess ITC eligibility: Check whether input tax credit is restricted under the amended conditions, particularly for services procured from another supplier in the same line of business.
- Update billing and accounting systems: Incorporate the applicable changes into tax calculations, invoices and accounting workflows.
- Examine e-commerce transactions: Review the treatment of specified delivery services and the registration conditions applicable to suppliers operating through electronic commerce operators.
- Check reverse charge liability: Verify whether the revised entries affect the business and update tax payment procedures accordingly.
- Review concession agreements: Businesses covered by the new UTGST provision should examine the timing and amount of tax liability arising from operation and maintenance expenditure debited to escrow accounts.
Taxpayers should refer to the relevant notification and its specific conditions before determining the GST rate or claiming input tax credit for a transaction.
Conclusion
The GST notifications dated October 27, 2026, introduce a range of amendments affecting ITC conditions, electric vehicle-related services, delivery services, reverse charge provisions and operation and maintenance services under specified concession agreements.
As the relevant amendments take effect from November 1, 2026, businesses and tax professionals should review the revised entries and assess their impact on tax calculations, ITC claims, invoicing and compliance processes.
A careful review of the applicable notification is essential to ensure that transactions are taxed correctly and that input tax credit is claimed only to the extent permitted under the amended provisions.
Official copy of the notification has been attached
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