RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

With ongoing war between US-Israel and Iran and disturbed West Asia, the geo-political situation in many parts of the world is a concern having fiscal and economic consequences. In Indian context, supplies of oil, gas, pharma etc. shall be impacted besides logistics and civil aviation hitting exports also. India is the third largest importer of crude oil. Even the tax revenue collection will be affected while grants and subsidies may have to go up. Government will also have to re-prioritize its needs.

MOF has spent Rs. 88.74 crores on advertisements for GST bachatutsav, following the GST rate rationalization in September, 2025.

India has launched new GDP series with FY 2022-23 as base year from earlier FY 2011-2012. With this, FY 2025-26 growth is now projected at 7.6%, up from earlier 7.4%. The new series will improve coverage of informal sector and also align India's methodology more closely with global standards. The new series incorporates new segments and administrative data sets such as GST transaction data and double deflation in manufacturing.

The new GDP series shall address the issues in old GDP methodology as it adopts structural improvement in estimation, adoption of double deflation in agriculture and manufacturing. The new series is said to be in sync with international statistical standards. It uses 600 item level data indictors which is more than three times of the current 180 level data used and is thus more comprehensive. In the new series, various agencies (ICRA, BoFA, Care Edge, Elara Global etc.) have projected that GDP is likely to grow between 6.8% to 7.4% for FY 2027 under the new series. The improvements suggests that the measured growth trajectory is likely to be structurally higher under the new series.

Share of agriculture in GDP is 17.4%, industry 25.04% and services about 48%. The overall economic performance in FY 2026 is due to robust economic growth in Q2 (8.4%) in Q3 (7.8%).

According to Prime Minister's EAC Chief, strong fundamentals and economic resilience are shielding India from present oil volatility amid Iran & US- Israel war. The broader growth story remains intact, though there may be disruptions owing to crude prices and LPG supply. The war has already gone into fourth week now and further continuity will impact most of the nations, particularly in Asia. Presently all macro-economic fundamentals seem to be good. Debt to GDP ratio is also under control.

However, India's energy vulnerability is high as we import almost entire oil and over half of gas. Government has taken steps to ensure minimal of disruption in supplies and to trade and industry. Finance Minister has stated that rupees one lakh more fund will give fiscal support to the global head winds in order to cushion the economy from war shock.

CBIC has allocated charge of duties amongst its members vide Office Order dated 27.02.2026, consequent upon appointment of new members. While Mr. Vivek Chaturvedi shall be the Chairman and overall head, Mr. Sanjay Mangal has been tasked with GST, Central Excise, Service Tax and Tax policy, besides other Zones / DGs.

CBIC has issued a circular on simplified procedure for handling export cargo returning to Indian ports due to closure of Strait of Hormaz resulting in return of vessels without reaching destination. Also, deferred duty payment scheme has been extended to eligible importers.

GSTAT registry has issued instructions on filing of appeals before GSTAT as to manner of filing and documents to be annexed thereto. CBIC has issued Standard Operating Procedure (SOP) for tax officers towards registration in respect of health security se national security cess. GSTN has also issued advisories on tax liability breakup as applicable in GSTR-3B and payment of pre-deposit while filing appeal before First Appellate Authority under section 107 of CGST Act, 2017.

Finance Bill, 2026 has been passed in Parliament (Lok Sabha).

GST collection during February, 2026 has shown a rising trend. Both, gross collection as well as net collection have recorded reasonable growth on YoY basis. Gross collection grew by 8.10% whereas net collection grew by 7.90% which indicate a sustained consumption led growth. It may be noted that collection which touched Rs. 2 lakh crore a month earlier is now lower than that magic number but in the range of Rs. 1,60,000 - Rs. 1,90,000 crore. Also February, 2026 collection is for just 28 days as compared to 31 days in last month. Total gross GST revenue is at Rs. 1,83,609 crore for February, 2026 as compared to Rs. 1,69,729 core in February, 2025. The net collection was recorded at 1,61,014 crore in February, 2026 as against Rs. 1,49,278 in February, 2025. Total refunds were higher at 22,595 crore showing a growth of 10.2 %. Net compensation cess is Rs. 5063 crore which continues only as a transitory arrangement.

SOP for Registration under Health Security se National Security Cess (HSNS)

CBIC, Office of Additional Director General of Systems, has issued a set of Standard Operating Procedure (SOP) for tax officers on processing of applications filed for registration, cancellation, revocation and payment under the Health Security se Security Cess Act, 2025 (HSNS) read with HSNS Rules, 2026 for levy of cess on the machines installed or other process undertaken for the manufacture or production of specified goods as per Schedule-I of HSNS Cess Act, 2025.

• The SOP Phase-I involves the following:

1. HSNS Cess taxpayer's Login
2. Enrollment
3. Filing of Registration Form - Form HSNS REG-01
4. Payment of HSNS Cess - Form HSNS PMT-01

• SOP for tax officers is on processing applications filed in respect of registration, cancellation, revocation, payment and helpdesk.
• The proposed automation process will not have any interactive workflow between the taxpayer and tax officers for the time being(except for approving/rejecting REG-01).
• SOP contains details about:

• Tax officers dash board
• Processing registration application in Form HSNS REG-01.

• Every 'Taxable Person' liable to be registered under 'Section 8 of HSNS ACT' shall apply for registration by submitting the FORM HSNS REG-01 on the Portal along with the documents specified in the said form.

• Request for cancellation by taxpayer / cancellation by tax officer.
• Revocation of cancellation
• Payment of HSNS Cess

• Help desk currently used for ACES-GST portal will cater to the needs of taxpayers and tax officers in respect of HSNS Cess.

• Mail Id: [email protected]
• Toll Free Number: 18004250232

(Source: File No. DGSYS/APP/CZU/RGMO/1/2025-ACES/GST O/o-ADG-DGS-ZU-CHENNAI-Part (1) dated 29.01.2026 issued by CBIC, Office of Additional Director General of Systems]

GSTAT Instructions on Filing of Appeals

Goods & Services Tax Appellate Tribunal (GSTAT) has issued the following instructions to facilitate smooth filing of appeals:

• APL-05 must contain soft copies of Show Cause Notice (SCN), Order-in-Original (OIO), Order-in-Appeal (OIA), Statement of Facts and grounds of appeal. Section 112 deals with filing of appeals before Appellate Tribunal.
• Pre-deposit and Court fees are compulsory. However, if there are any orders of the Higher Courts for exemption of Court Fee / Pre Deposit then flag (defect) should not be raised.
• No Court fees / pre-deposit is required in appeal filed by the Revenue (Department).
• In case the Appellant prefers appeal under Section 112(1) by attaching a scanned copy certified OIO, OIA and if the Scrutiny officer of GSTAT is satisfied from the endorsement made therein by the issuing Authorities, that it is a certified copy of OIO or OIA, a flag(defect) should not be raised.
• The Appellant taxpayer is also required to upload a copy of the Authorization issued in favour of the tax professional or Vakalatnama executed in the name of an Advocate.
• As far as the application filled by the Revenue under Section 112(3) are concerned, the following document are necessary:

• Show Cause Notice.
• Order in Original
• Order in Appeal.
• Opinion of the Commissioner directing his officer to make the application.
• Statement of facts.
• Grounds of appeal.

• One Verification and Digital Signature of appellant is required.

[Source: GSTAT Instruction dated 10.03.2026 (File No. GSTAT/Pr. Bench/Portal

/125/2025-26/3368) issued by Registrar, GSTAT]

Advisory on the Payment of pre-deposit while filing of appeal before First Appellate Authority

• Any payment made through Form GST DRC-03 is not automatically linked to the Demand ID in the Electronic Liability Register, as the system only recognizes payments made through the Payment towards Demand option.
• Therefore, when a taxpayers makes voluntary payments during the investigation stage through Form GST DRC-03 and subsequently, a demand order such as Form GST DRC-07 is issued, the GST portal may still ask for the mandatory pre-deposit while filing an appeal.
• To avoid this issue, taxpayers should file Form GST DRC-03A to link the DRC-03 payment with the relevant Demand ID before filing the appeal. This ensures that the earlier payment is recognized by the system and prevents duplicate pre-deposit payment.

(Source: GSTN Advisory dated 14.03.2026)

Confirmation of 'Tax Liability Breakup, As Applicable' in GSTR-3B

• According to Section 50 of the Central Goods and Services Tax (CGST) Act, 2017, interest is payable where the tax liability pertaining to a previous tax period is discharged in a subsequent tax period. Accordingly, the tab 'Tax Liability Breakup, As Applicable' in Form GSTR-3B is meant to capture the tax liability relating to supplies of previous tax periods which are being reported and discharged in the current tax period.
• From the February 2026 tax period onwards, the GST Portal auto-populates the 'Tax Liability Breakup, As Applicable' in GSTR-3B on the basis of the document dates of supplies reported in GSTR-1 / GSTR-1A / IFF, where such supplies pertain to any previous tax period but the corresponding tax liability is being discharged in the current period's GSTR-3B.
• Accordingly, from the February 2026 tax period, after offsetting the liability in GSTR-3B, taxpayers are required to click on the 'Tax Liability Breakup, As Applicable' tab available on the payment page and confirm the breakup of tax liability by clicking the 'SAVE' button or edit the same, if required.
• Once the breakup of tax liability is confirmed and saved, the taxpayer will be able to proceed with filing Form GSTR-3B using EVC or DSC.
• Meanwhile, taxpayers are requested to kindly open the 'Tax Liability Breakup, As Applicable' tab on the payment page and click 'SAVE' within the tab for filing during the current reform cycle. Thereafter, filing of Form GSTR-3B can be completed normally.
• Taxpayers are requested to kindly follow the above interim procedure till the issue is resolved on the portal.

(Source: GSTN Advisory dated 16.03.2026)

GST Collections in February, 2026

• Total gross GST collection was recorded at Rs. 1,83,609 crore with rise of 8.10% on YoY basis
• Total net GST collection registered a growth 7.9% at Rs. 1,61,014 crore as against Rs. 1,49,278 crore in February, 2025.
• Out of this, gross domestic GST revenue was Rs. 1,35,772 crore (only 5.3% rise) imports were Rs. 47,837 crore (17.2% rise)
• Total refunds stood at Rs. 22,595 crore (up by 10.2%) of which export refunds were Rs. 12,656 crore (26.5% up).
• Total net GST revenue showed a growth of 7.9% on YoY basis, i.e. Rs. 1,61,014 crore as against Rs. 1,49,278 crore in February, 2025.
• Net compensation cess revenue was Rs. 5063 crore as against Rs. 13,481 crore in February, 2025.
• Sates like Maharashtra and Uttar Pradesh showed growth of 5-6% but states such as Tamil Nadu, Madhya Pradesh and Rajasthan recorded a negative growth.

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