57th GST Council Meeting (Oct 2026): Key Recommendations

The GST Council held its 57th meeting in New Delhi on October 8, 2026, chaired by the Union Finance Minister. This was a procedure and enforcement meeting more than a rate meeting: most of the recommendations deal with arrest, prosecution, penalties, refunds and return corrections. This post sets out what was recommended, what has a date attached, and what a business should and should not do in response.

Status: Recommendations, Not Yet Law

A Council recommendation is not enforceable by itself. Changes to the CGST Act, such as omitting a section, need an amendment passed by Parliament and the State legislatures. Changes to rules, rates and forms need notifications, and clarifications come through circulars. Until those are issued, the existing law applies in full. Where the Council attached a date, we have stated it below; where it did not, treat the timing as open.

Enforcement: Arrest, Prosecution and Goods in Transit

• Arrest: the Council recommended omitting Section 69 of the CGST Act, which is the provision that gives GST officers the power to arrest.
• Prosecution: the monetary threshold for prosecution under Section 132 would rise from Rs 1 crore to Rs 5 crore, with the list of offences and the punishments rationalised.
• Vehicle interception: goods in transit could be intercepted only on specific intelligence and with authorisation from an officer of at least Joint Commissioner rank.
• Transit States: a State through which goods merely pass would generally not inspect, detain or seize them, except where no e-way bill was generated or the documents are missing.
• Confiscation: goods and conveyances merely in transit would be kept out of confiscation under Section 130 in the specified circumstances.

For the current e-way bill requirements, which continue to apply, see our guide to e-way bill rules, validity and penalties.

Penalties, Notices and Appeals

The Rs 10,000 floor for show cause notices is not a waiver of tax below that amount; it limits when a notice is issued. How interest and late fees are computed today is covered in our post on GST late fees and interest.

Input Tax Credit and Refunds

• Input services, inverted duty structure: refund of accumulated ITC on input services would be allowed in specified cases, for credit availed on or after November 1, 2026.
• Capital goods: refund of accumulated ITC on capital goods in specified zero-rated and inverted duty cases, spread over 60 months, for credit availed on or after April 1, 2027.
• Faster processing: the time to issue an acknowledgement or deficiency memo would fall from 15 days to 10 days, with a deemed acknowledgement if neither is issued.
• Provisional refunds: 90% of eligible zero-rated and inverted duty claims would be sanctioned provisionally through a risk-based automated process.

These refund changes do not alter the basic conditions for claiming credit, which are set out in our input tax credit guide. Exporters should also read GST on exports: zero-rated vs exempt.

Returns, Registration and E-Invoicing

• Return corrections: a mechanism to correct mismatches between GSTR-1, GSTR-3B and ITC, with a revised Form GST DRC-03, from the April 2027 return period.
• Late fee: a waiver of late fee on returns under Section 39(1) for taxpayers with prior-year turnover up to Rs 5 crore, if the return is filed by the end of the month in which it was due.
• Annual Return Quarterly Payment scheme: approved in principle as an option for taxpayers up to Rs 5 crore turnover with only B2C supplies. The framework is still to be written.
• Registration: most amendments to be accepted automatically, simpler cancellation and revocation, and a new Rule 14B letting small e-commerce sellers register in a State using the operator warehouse as their place of business.
• E-invoicing: to be extended to specified reverse charge supplies from unregistered persons and to import of services, for taxpayers with turnover of Rs 5 crore or more.

Related reading: GSTR-1 vs GSTR-3B filing guide, GST registration cancellation and revocation, and e-invoicing applicability.

Rate and Classification Changes

There was no broad rate revision. The specific items reported are:

• Psyllium (Isabgol) seeds: nil rate, whether fresh, chilled, frozen or dried.
• Waste and scrap (plastic, electrical and electronic, tyre waste, used cooking oil): reverse charge where an unregistered person supplies to a registered person, and 2% GST TDS on specified supplies between registered persons.
• Second-hand vehicle dealers under the margin scheme: ITC allowed on inputs and input services other than the vehicles themselves, such as spares, repairs and rent.
• Seaweed extract bio-stimulants registered under the Fertiliser Control Order: classifiable as fertilisers under heading 3101.
• Toys: the rate entries are clarified to cover all toys under heading 9503.

What Businesses Should Do Now

1. Change nothing in your compliance yet. File, pay and reconcile under the existing law until each change is notified.
2. If you have an inverted duty structure, start tracking input services credit availed from November 1, 2026 separately, so a refund claim is ready when the notification arrives.
3. Keep reconciling GSTR-1, GSTR-3B and GSTR-2B every month. The correction mechanism is not due until the April 2027 return period.
4. If you deal in the listed scrap categories, review your purchase and sale flows for the reverse charge and TDS proposals.
5. If you have a pending notice or penalty, ask your adviser whether the lower penalty and the notice floor are likely to reach it once the amendments are worded. That depends on the final text.