57th GST Council: What May Change for Small Taxpayers

The GST Council held its 57th meeting on 8 October 2026 in New Delhi. This time the focus was not tax rates but everyday GST work: returns, refunds, registration and notices. Here is a plain summary of what was recommended and who it may help.

Important: these are recommendations, not law. A change applies only after the government issues a notification or amends the CGST Act or Rules. Until then, today's rules continue.

1. If you file late: late fee relief

Taxpayers with turnover up to ₹5 crore in the previous year may get the late fee waived on a delayed return under section 39(1), if the return is filed by the end of the month in which it was due. The release talks only about late fee. It says nothing about interest, so do not assume interest is waived.

2. If you export or face inverted duty: faster refunds

More refunds would be processed by the system. In some cases, 90% of a claim for zero-rated supplies (such as exports) or inverted duty could be sanctioned provisionally. The time to acknowledge a refund application would come down from 15 to 10 days.

3. Fewer notices and lower penalties

• No show cause notice where the tax involved is below ₹10,000.
• The maximum general penalty under section 125 would drop from ₹25,000 to ₹10,000.
• The prosecution threshold would rise from ₹1 crore to ₹5 crore.
• Arrest powers under section 69 would be omitted. This has not happened yet, because the law must be amended first.

4. New businesses and marketplace sellers: simpler registration

The Council recommended a clearer document list, drop-down options in the application form, automatic acceptance of most amendments, and easier cancellation once returns are filed and dues are paid. Small sellers on online marketplaces could register in other states through a new route under proposed rule 14B.

5. A new way to correct return mistakes

A new mechanism to correct liability and input tax credit in the return is proposed to start from the April 2027 return. The Council has asked for public consultation, so the final version may differ.

6. Input tax credit changes

Some blocked credits under section 17(5), such as certain catering and insurance expenses, may be relaxed. Refund of accumulated ITC could also extend to more cases, with different start dates (1 November 2026 and 1 April 2027).

7. E-invoicing may widen

For businesses with turnover of ₹5 crore and above, e-invoicing may extend to reverse charge purchases from unregistered persons and to imports of services.

What to do now

• Keep filing on time. Do not delay a return expecting a late fee waiver.
• Keep your ITC records tidy, especially for input services and capital goods.
• Match your sales and purchases regularly.
• Watch for official notifications before changing any process.

A detailed version with tables, examples and a glossary is available on the Paytaxs blog under the title "57th GST Council Meeting: Key Recommendations".