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India’s GST Council may consider a new package of business-compliance changes, including broader input tax credit (ITC), faster refunds, simpler registration and returns, and changes to enforcement. But the October 2026 report describes proposals—not approved rules. The official material available as of October 5, 2026 does not confirm a reported October 7 Council meeting or its agenda, and it does not confirm that GST arrest powers are being removed.
What is confirmed—and what is still only reported
India Today, citing reporting by the Economic Times and people familiar with the matter, says the GST Council may consider a further package of changes after the 2025 rate reforms. The proposals would affect different parts of GST compliance, from which expenses can generate ITC to how businesses register, file returns and respond to enforcement.
That account is not an official Council decision. The GST Council makes recommendations to the Union and State governments on matters including rates, exemptions, thresholds and administrative procedures. A recommendation is also distinct from the subsequent legal or administrative steps needed to put a change into effect. As of October 5, official Council materials located for this topic do not confirm the reported October 7 meeting, its agenda or any approval of the measures below.
The distinction matters most for the claim that GST arrest powers could be removed. The report lists this as a possibility; it does not establish that the power has been repealed or that anyone’s legal position has changed.
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What the reported proposals could change
More expenses may qualify for ITC
The report describes possible eligibility for credits on a wider set of business expenses, including employee health and life insurance, outdoor catering, telecom towers, pipelines outside factories, certain free samples and expired goods that must be destroyed. It also mentions vehicles with seating for up to 13 people, along with their insurance and maintenance, and leased or hired vehicles.
These are examples of expenses that could be covered if a proposal were adopted and implemented. They are not a new list of expenses businesses can claim today on the strength of this report. Eligibility would depend on the final rules and the taxpayer’s circumstances.
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Refunds for accumulated credit and inverted duty structures
An inverted duty structure can leave a business with accumulated ITC when tax on its inputs is higher than tax on its final product. The report identifies food, pharmaceuticals, textiles and electric vehicles in the 5% GST bracket as examples where this issue may arise. It says the Council could consider revising the inverted-duty refund formula to account for input services as well.
Separately, the report says refunds of tax paid on certain plant and machinery and input services might be allowed in monthly instalments over five years. It does not establish the eligible transactions, calculation method, start date or conditions for such instalments. No business should treat that schedule as an available refund entitlement unless official rules provide for it.
Credit when a supplier has not paid tax
Another reported possibility would let a genuine buyer retain credit while authorities pursue a supplier that failed to pay tax. This is a proposed change, not a general statement of the rule that currently governs every buyer-supplier dispute. The report does not specify how a buyer would demonstrate good faith or which transactions would qualify.
Exports and cross-border transactions
For IT and IT-enabled services companies, the report says supplies to overseas branch offices could be treated as exports and become eligible for ITC. It also describes a possible export treatment for goods sold to foreign buyers but delivered to a special economic zone in India, provided payment is received in foreign currency. Aligning GST rules more closely with Reserve Bank of India rules for export payments is another reported possibility.
These points remain under consideration according to the report. It does not provide draft provisions or detailed tests for qualifying supplies, payment evidence or credit claims.
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Possible administrative changes include simpler, faster GST registration and wider biometric Aadhaar authentication. The report refers to an earlier proposal for an automated three-day process for low-risk applicants; it does not establish that this process has newly been approved or is now available to applicants.
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For GST returns, the report describes possible mid-month amendments and corrections auto-populated from e-invoice data. Those changes could help businesses correct mismatches or filing errors, but the official materials located for this article do not document a newly approved process or explain how corrections would work.
Enforcement, penalties and e-way bills
The reported enforcement proposals include rationalising penalties in non-fraud cases, standardising show-cause notices, raising prosecution thresholds and removing arrest powers under GST law. The report frames them as part of a wider decriminalisation effort, but it does not establish that any of these changes has taken effect. A change to arrest powers in particular would require confirmation through an official decision and the relevant legal implementation.
The report also mentions rationalising e-way bill rules without setting out proposed text. It does not identify which goods, thresholds, routes or documents might change, so no specific e-way bill requirement can be inferred from this reference.
How this differs from the 2025 GST reforms
The separate, established reform phase was approved at the GST Council’s 56th meeting. A Press Information Bureau backgrounder dated June 30, 2026 says the Next-Generation GST reforms took effect on September 22, 2025. It describes a structure based primarily on 5% and 18% slabs, with a 40% rate for specified luxury and sin goods, and says the reforms included easier registration and return filing, faster refunds and lower costs.
Those 2025 measures are not proof that the additional proposals reported in October 2026 have been approved. The later report concerns a possible new compliance package; its items need their own official confirmation and implementation.
Quick Recap
What businesses should do now
- Keep applying the rules currently in force. Do not claim newly described ITC, assume a refund timetable or change filing practices solely because a proposal has been reported.
- Track official implementation, not just a meeting report. Look for a Council recommendation and the relevant notification, amendment or administrative instruction before relying on a change.
- Assess proposals against your own transactions. Potential effects vary by sector, expense, supply, refund calculation and taxpayer eligibility; the reported package would not automatically benefit every business.
- Do not assume enforcement exposure has changed. In particular, the report is not a basis for treating arrest powers or prosecution thresholds as altered.
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