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India’s GST Council has recommended faster refunds: 90% of certain refund claims could be paid provisionally on a risk-evaluated basis. Its reform release from the 56th meeting, issued in September 2025, supports that change. It does not say that tax officers’ arrest powers were scrapped, and the later official material reviewed does not report any such repeal. The refund change is real but still partly pending in law. The arrest-power part of the headline is not confirmed by the sources reviewed.
What the 56th GST Council approved on refunds
The Council’s September 2025 release made recommendations on three refund streams: zero-rated supplies, refunds arising from inverted duty structure (IDS), and low-value export consignments. A recommendation is not law until it is enacted or notified, and the release itself says some of the changes needed statutory amendment. The sections below keep those stages apart.
Zero-rated refunds: 90% provisional sanction
The Council recommended that 90% of qualifying zero-rated refund claims be sanctioned provisionally, based on system risk identification and evaluation. In exceptional cases, an officer could instead proceed to detailed scrutiny, with reasons recorded in writing. The release set 1 November 2025 as the date this change would be operationalised.
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Inverted duty structure refunds
IDS refunds arise when tax on inputs is higher than tax on outputs, so input tax credit accumulates. The Council treated this route differently from zero-rated refunds, because it needs a change to the law.
The proposed CGST Act amendment
The Council recommended amending section 54(6) of the CGST Act to permit provisional sanction of 90% of the claimed refund on a risk-evaluated basis, similar to the zero-rated rule.
The administrative route while the amendment is pending
Until the statutory amendment takes effect, the release said the Central Board of Indirect Taxes and Customs (CBIC) would direct central tax field formations to grant a provisional refund equal to 90% of the amount claimed. The operationalisation date given was 1 November 2025.
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Low-value export consignments
The Council also recommended removing the minimum threshold for refunds on low-value export consignments where tax was paid. The stated aim is to help small exporters who ship through courier and postal channels. This is a recommendation to amend section 54(14) of the CGST Act. It does not show that the change has taken effect.
Recommendation, administration, amendment or commencement?
Readers often see one of these stages reported as if it were the others. The table separates them, using the sources reviewed. “Not stated” means the sources reviewed do not address that stage.
| Item | Council recommendation | Administrative step | Statutory amendment | Commencement |
|---|---|---|---|---|
| Zero-rated refunds (90% provisional) | Recommended; risk-based provisional sanction, with detailed scrutiny in exceptional cases (56th meeting release, September 2025) | Operationalised from 1 November 2025 (same release) | Not stated | 1 November 2025 as the operationalisation date; no later notification found in the sources reviewed |
| IDS refunds (90% provisional) | Recommended; amend CGST Act section 54(6) | CBIC to direct field formations to grant 90% pending the amendment; operationalisation date 1 November 2025 | Reported in the GST Council Secretariat’s March 2026 update as an amendment whose effective date was still to be notified | Effective date to be notified (March 2026 update) |
| Low-value export consignments (section 54(14)) | Recommended; remove the minimum threshold for refunds where tax was paid | Not stated | Recommended amendment; enactment not confirmed in the sources reviewed | Not stated |
| Tax officers’ arrest powers | No reform in the 56th meeting release | Not stated | No enacted amendment identified in the sources reviewed | Not stated |
The March 2026 update also shows that commencement can differ from enactment. It reports that the Finance Act, 2026 received presidential assent on 30 March 2026. The omission of IGST Act section 13(8)(b), on the place of supply for intermediary services, took effect with that assent. Effective dates for other changes, including the inverted-duty refund amendment and post-supply discounts, were still to be notified.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The arrest-power claim
The 56th-meeting release contains no arrest-power reform. A GST Council record from the 7th meeting, made while the law was being drafted, documents debate over arrest powers and proposals to limit or regulate them. That is a record of drafting debate. It does not show that a later law removed the power.
The March 2026 Secretariat update discusses later law changes and refund implementation. It does not report an arrest-power repeal. The negative finding is limited to the materials reviewed. It does not rule out a later legal instrument that the reviewed sources did not cover.
A report that officers’ arrest powers were scrapped should point to one of the following:
- The enacted Act and the section that was amended or omitted.
- The commencement notification, with its number and date.
- An official government statement that names the change.
Without one of these, the accurate framing is that the Council approved risk-based provisional refunds, and that the arrest-power claim is unverified.
Checking the current status of these refund changes
The most recent official update reviewed is the Secretariat’s March 2026 newsletter, and the sources reviewed do not show whether the deferred effective dates have since been notified. To check the position:
- Search the CBIC website for CGST Act amendment notifications issued after 30 March 2026, and note the notification number and effective date for section 54(6) and section 54(14).
- Confirm whether the refund change applies to your claim type. Zero-rated and IDS refunds follow different routes.
- If you have a pending refund, ask the jurisdictional tax office which provisional sanction rule it applied and whether the claim was sent for detailed scrutiny, and request the reasons in writing.
Keep the notification numbers and refund acknowledgements with your records, because the provisional amount may be adjusted after verification.
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