RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

Macroeconomic fundamentals of the Indian economy remain strong, supported by robust domestic demand, healthy corporate balance sheets and sustained fiscal discipline amid global challenges.

According to MoF, global uncertainties have resurfaced in the wake of latest escalation of West Asia conflict, clouding the world economic outlook, despite resilient domestic growth momentum is India. The recent rebound in global crude oil prices, if sustained, could re-emerge as a risk for financing the fiscal deficit and the current account balance. The continued interplay of domestic reforms, prudent macroeconomic management and swift policy responses, backed by consistent on-ground implementation, will be key to shaping India's economic trajectory.

According to NSO data, India's industrial output has risen to 7.3% in June, 2026 due to higher 7.8% growth in manufacturing sector and 10.6% in electricity sector. The headline Index of Industrial Production (IIP) stood at 123.1 in June, up from 114.7 a year earlier. All four broad sectors - mining and quarrying, manufacturing, electricity and gas supply, and water supply, sewerage and waste management, recorded positive growth during the month. This suggests investment activity remained robust during the month, benefiting from the easing of tensions in West Asia as well as the large rainfall deficit in June, which provided a longer window for activity.

On the other hand, services sector also moderated in May, 2026. Only 8 sub-sectors out of 19 sub-sectors of 'services' could register a double digit growth in May, 2026 whereas in April, 2026, 14 sectors recorded a double digit growth. This is as per trial Index of Services Production (ISP) released. 'Accommodation and food' was the top performer with 27.4% growth followed by real estate, retail, banking and telecom. Sectors such as postal & courier, air transport and information & broadcasting recorded a negative growth.

According to CAG State Finances 2024-25 Report, tax buoyancy for states has fallen in FY 2025. Top five states include Punjab, Chhattisgarh, Maharashtra, West Bengal and Bihar. The bottom states include Telangana, Jharkhand, Kerala, Andhra Pradesh and Orissa. Tax buoyancy has also fallen for the centre. This implies that own tax revenue (OTR) is declining in terms of GSDP.

According to Ind-RA ratings, GST implementation has increased GST revenue of the States. State tax revenue has grown by 9% to Rs. 12.9 trillion during 2018-2026 as against gross state domestic product (GSDP) growing slow at 10.4% during same period.

According to media, CBIC is working on preparation of a new framework for streamlining the process of revenue appeals in cases involving two or more states. This would bring in more clarity and transparency amongst department for filing appeals. Presently, there are doubts as to which Commissionerate should file appeal and at which GSTAT bench.

GSTAT President has issued an order for reconstitution of benches w.e.f. 1st August, 2026 for Delhi, Chennai, Coimbatore, Madurai, Pondicherry and Lucknow benches consequent upon new joining of technical members. The said order also modifies the assignment and categorization of appeals / cases in GSTAT as per Rule 123GSTAT Procedure Rules, 2025. Revised categorization has been done for all benches across the country except Bangalore (Karnataka) Bench for which special classification has been made. Further, it has been clarified that all part heard cases shall be released and will be reassigned as per new categorization.

GSTN has issued an advisory putting e-way bills enhancement on hold for the time being which were to be implemented from 1st August 2026. This required businesses to provide GST number of final recipient where invoices differed from location of delivery. There were certain concerns over business processes and technology. These proposed changes will therefore, be withdrawn from the portal.

According to GST data released recently, gross Goods and Services Tax (GST) collection rose 15.4% on year-on-year basis to Rs 2.11 lakh crore in July 2026, driven by robust domestic revenues and a sharp increase in tax collections from imports. Gross domestic GST revenue increased 10.1% to Rs 1.45 lakh crore from Rs 1.31 lakh crore in July, 2025. GST revenue from imports rose 28.8% to Rs 66,511 crore, taking the total gross GST collections for the month to Rs 2.11 lakh crore. The data suggest that domestic consumption and business activity remained steady despite geopolitical tensions in West Asia, with higher domestic and import-related tax collections supporting overall revenue growth.

Departmental Appeals in DGGI Common Adjudicating Authority (CAA) Cases

• CBIC has clarified the procedure for filing departmental appeals before the GST Appellate Tribunal (GSTAT) where the Order-in-Original (OIO) has been passed by a Common Adjudicating Authority (CAA) in DGGI cases.
• The Order-in-Appeal must be uploaded on the GST portal and simultaneously sent (email + physical copy) to the Commissioner having jurisdiction over the Common Adjudicating Authority.
• The CAA Commissioner will examine the order, obtain comments from DGGI (if required), and forward recommendations to the jurisdictional Commissioners of all concerned taxpayers. The jurisdictional Commissioner of each taxpayer will act as the Reviewing Authority under Section 112(3) of the CGST Act.
• Even if one common order covers multiple taxpayers, separate departmental appeals must be filed for each taxpayer by their respective jurisdictional Commissionerate.
• Appeals must be filed before the GSTAT Bench having territorial jurisdiction over the taxpayer, not the Commissionerate of the Common Adjudicating Authority.

(Source: Circular No. 256/02/2026-GST dated 25.07.2026)

GSTAT Jaipur bench to be functional from 27st July, 2026

• The Jaipur Bench of the GST Appellate Tribunal (GSTAT) shall commence hearing of appeals in hybrid mode (physical + virtual) from 27 July, 2026.
• Hearings will be conducted from its temporary office situated at 3rd Floor, Plot No. 20, Sudarshanpura Industrial Area, Bais Godam, Jaipur-302006.
• Further, the daily cause list of the cases listed before the Bench will be published on the GSTAT e-filing portal (www.efiling.gstat.gov.in) under the "Cause List" tab, and all taxpayers, departmental authorities and authorized representatives are advised to regularly check the portal for updates regarding listing of cases.
• Taxpayers in jurisdictional locations in Rajasthan can now pursue GST appeals before the Jaipur Bench, bringing greater accessibility and faster dispute resolution in GST.

[Source: Public Notice No. 02/2026 dated 22.07.2026

issued by Dy. Registrar GSTAT Jaipur]

GSTAT reconstitutes benches & revises case classification w.e.f. 1st August, 2026

• The Goods and Services Tax Appellate Tribunal (GSTAT) has issued Office Order No. 4/GSTAT/PB/2026 dated 29.07.2026, reconstituting various Benches and revising the classification of cases to streamline adjudication. The revised roster and case categorisation will come into effect from 1 August 2026.
• Delhi, Chennai, Coimbatore, Madurai, Puducherry and Lucknow Benches have been reconstituted with revised allocation of Judicial and Technical Members.
• Across all GSTAT Benches (except Bengaluru), cases will now be classified into:
  • Category-I: Classification, valuation, time of supply, ITC, tax liability, refunds, assessments, recovery, seizure/confiscation, rectification, etc.
  • Category-II: Registration matters, Sections 73 & 74 disputes, amendment/cancellation of registration, composition scheme, penalties, provisional attachment and other residual matters.
• Bengaluru Bench will follow a separate three-category system (Category I, II & III) with dedicated Benches for each category.
• All part-heard matters will stand released and will be reassigned as per the revised classification.
• The Registry has been directed to classify appeals based on the pleadings and legal issues involved, and not merely on the declaration made by the appellant.

(Source: Office Order No. 4/GSTAT/PB/2026 dated 29.07.2026)

GSTAT Mumbai Commencement of functioning

• Commencement of hearing of cases before Goods and Services Tax Appellate Tribunal (GSTAT), Mumbai Bench shall start with effect from 27.07.2026.
• The daily cause list of matters / cases listed before the Bench i.e., Mumbai Bench shall be published on the GSTAT e-filing portal (efililng.gstat.gov.in) under the 'Cause List' tab.
• Stakeholders are requested to refer to the portal regularly for updates regarding listing of their respective matters.

[Source: Public Notice 04/2026 dated 24.07.2026

issued by Deputy Registrar GSTAT, Mumbai Bench]

GSTN keeps proposed e-Way bill enhancements on hold

• The enhancements covered under the earlier GSTN advisories dated 9 June, 2026 and 17 June, 2026, along with the FAQs issued on 2 July, 2026, will not be implemented for w.e.f. 1st August, 2026 now.
• GSTN has announced that the proposed e-Way Bill enhancements, which were earlier scheduled to be implemented from 1st August, 2026, have been kept on hold until further notice.
• These relate to :

• Mandatory capture of 'Ship to GSTIN' in Bill-To/Ship-to transactions ...
• Voluntary Closure of E-Way Bill functionality..

• Proposed e-Way Bill enhancements have been deferred until further notice.
• Accordingly, no changes will be required in the production environment from 1 August, 2026.
• Earlier advisories on this and related FAQs will also be withdrawn from the GST Portal.
• Therefore, existing e-Way Bill functionality will continue without any change until GSTN issues a fresh advisory.

(Source: GSTN Advisory dated 29.07.2026)

GST Collection in July, 2026

• Total gross GST revenue for July, 2026 has crossed 2 lakh mark and is Rs. 2,11,205 crore, up by 15% over July, 2025 (Rs. 1,83,065 crore).
• Of this, domestic revenue is Rs. 1,44,695 crore (10.1% higher). While import revenue is Rs. 66,511 crore (28.8% higher).
• Similarly, total net GST collection (net of refunds) is at 1,81,237 crore, up by 15.8% on YoY basis over July, 2025 of Rs. 1,56,570 crore.
• Total refunds amounted to Rs. 29,968 crore, showing an upward trend of 13.1%.
• GST growth was witnessed in double digits in States / UTs like Chandigarh, Haryana, Uttar Pradesh, Nagaland, Jharkhand, Gujarat, Kerala, Maharashtra etc. There was negative growth seen in Himachal Pradesh, Uttarakhand, Sikkim, Mizoram, Madhya Pradesh and Pondicherry.

***************