RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

RBI has recently raised the FY- 2026 growth projection to 6.8% from 6.5% with inflation getting low.

Owing to GST rates rationalization, there is an overall growth in second quarter of FY 2026 in India’s manufacturing sector across industries. About 80% of manufacturing units have expected higher orders, mainly in household and consumer durables, automobiles, capital goods, electronics, textiles and so on. Both, domestic demand as well as exports have noticed upward trend. E-coms have also expanded the business in smaller cities in retail space. Government is also keeping an eye on GST benefits being passed on to the consumers.

GSTAT portal will be enabling e-filing of appeals for cases filed manually from March, 2026. In the initial days and even after, assessees had to file manual appeals before first appellate authority due to technical glitches. GSTN has clarified that e-filing functionality for such cases is currently not functional but will be enabled from March 1, 2026. It may be noted that GSTAT has already issued an advisory for new staggered e-filing for second appeals under section 112 of the CGST Act, 2017. Accordingly, missed timelines can be regularized upto 30th June, 2026.

CBIC has issued instructions for provisional sanction of refund claims on the basis of identification and evaluation of risk based on system. CBIC has also withdrawn its earlier Circular No. 212 dated 26.06.2024 in relation to mechanism for providing evidence of compliances of conditions under section 15(3) by the suppliers in relation to discounts. GSTN has issued an advisory on changes in auto-population of input tax credit from GSTR-2B to GSTR-3B.

The generation of e-way bills have hit a record high of 132 million in September, 2025 which is indicative of surge in business and economic activities.

The GST Council is likely to focus on further changes so as to ease processes of compliances and policies, after the rate rationalization exercise. This may require changes in rules also.

Withdrawal of Circular No. 212/6/2024-GST dated 26.06.2025

CBIC has withdrawn its earlier Circular No. 212/6/2024-GST dated 26.06.2024 which provided for mechanism for evidence of compliance of conditions of section 15(3)(b)(ii) of CGST Act, 2017, by the suppliers.

• In terms of powers under section 168(1) of CGST Act, 2017, said Circular has been withdrawn. Therefore, the procedure prescribed vide the aforesaid circular for providing evidence of compliance of conditions of Section 15(3)(b)(ii) shall not be required.
• Suppliers will therefore, no longer be required to furnish such evidences (as per Circular No. 212) for post supply discounts w.e.f. 01.10.2025.
• The said procedure for compliance has become redundant in view of amendment made in section 34(2) by the Finance Act, 2025 mandating reversal of input tax credit.

(Source: Circular No. 253/10/2025-GST dated 01.10.2025)

Provisional sanction of Refund claims

• Based on recommendations of 56th GST Council meeting held on 03.09.2025, CBIC has issued instructions for provisional sanction of refund claims on the basis of identification and evaluation of risk by the system.
• Board has issued the following instructions with respect to processing of refund claims, filed with the proper officer, on account of zero rated supply of goods or services or both:

• The refund application, consequent to its filing, shall continue to be processed as per present guidelines till the issuance of FORM GST RFD-02 or FORM GST RFD-03, as the case may be.
• Categorization of refund applications as “low-risk” on the basis of risk score provided by the system shall be taken into account and 90% of the refund amount claimed shall be sanctioned on provisional basis in such cases.
• Once an acknowledgment has been issued in FORM GST RFD-02, scrutiny is not required to be done for low risk refund applications for sanctioning of refund on provisional basis unless the said refund application is covered under the first proviso to rule 91(2) of the CGST Rules, 2017, whereby the officer, for reasons to be recorded in writing, may proceed with the examination of the application as per Rule 92, instead of grant of refund on provisional basis.
• For refund applications, which are not categorised as “low-risk” by the system, refund shall not be sanctioned on provisional basis and in such cases, the proper officer shall proceed with detailed scrutiny of refund application and further action as per the extant guidelines.
• The statutory conditions prescribed for grant of provisional refund, including non-eligibility of the notified category of registered persons under section 54(6) vide Notification No. 14/2025-Central Tax dated 17.09.2025, the requirement under Rule 91(1) regarding non-prosecution, shall continue to be applicable in such cases.
• Provisional refund may not be sanctioned where, in respect of any previous refund application filed by the claimant, the issue involved is pending in an appellate forum, or where a show cause notice is issued or where an order has been passed but matter has not attained finality.
• If, on detailed examination, it appears to the proper officer that the refund amount sanctioned provisionally is more than the refund amount finally found admissible, in such case, the proper officer shall issue a show cause notice to the applicant, in FORM GST RFD-08, under section 54 of the CGST Act, read with section 73 or 74 or 74A of the CGST Act, 2017.
• The provisions related to risk-based sanction of provisional refund shall be applicable for all refund applications filed on or after 01.10.2025.
• The amendment in the Act is effected, in case of refund applications filed on account of IDS, on or after 01.10.2025, 90% of the refund amount so claimed may be sanctioned on provisional basis in similar manner as is being sanctioned provisionally for refund claims filed on account of zero-rated supplies.
• The statutory conditions prescribed for grant of provisional refund in case of zero rated supplies shall equally apply in these cases.

[Source: Instruction No.  06/2025-GST dated 03.10.2025

issued by  CBIC (GST Policy Wing)]

GSTN Advisory on IMS

GSTN has clarified as follows in relation to changes in GST returns filing w.e.f. 1st October, 2025

1. No Change in Auto-Population of ITC

• Input Tax Credit (ITC) will continue to auto-populate from GSTR-2B to GSTR-3B without any manual intervention.
• The mechanism of auto-population remains unchanged due to the implementation of the Invoice Management System (IMS).

1. GSTR-2B Generation

• GSTR-2B will continue to be generated automatically on the 14th of every month, without any manual intervention by taxpayers or based on the actions taken by the taxpayers.
• Taxpayers can take actions in IMS even after generation of GSTR-2B till filing of GSTR-3B and can regenerate GSTR-2B accordingly, if required.

1. Credit Note Handling (Effective October 2025 period onward)

• Recipient taxpayers will have the option to keep a Credit Note or related document pending for a specified period.
• On acceptance of Credit Note or related document, the recipient will also have the flexibility to reduce ITC only to the extent of its availment by adjusting the reversal amount manually.

(Source: GSTN Advisory dated 09.10.2025)