On 8 October 2026, the GST Council met in New Delhi under Finance Minister Nirmala Sitharaman and recommended a long list of process changes, from removing arrest powers to accepting most registration amendments automatically. The Ministry of Finance release is clear that none of this has legal force until the matching circulars, notifications or law amendments are issued.
What changes
The items most relevant to small and growing businesses:
- No show cause notice where the tax involved is under ₹10,000, and the general penalty falls from ₹25,000 to ₹10,000.
- Arrest powers under section 69 of the CGST Act are to go, and the prosecution threshold rises from ₹1 crore to ₹5 crore.
- Changes to registration details, other than the principal place of business, are to be accepted automatically. A new rule 14B would let small e-commerce sellers with no physical presence in a state register using an e-commerce operator’s warehouse as their principal place of business, if they pass on no more than ₹2.5 lakh of input tax credit a month.
- Excess cash ledger balances are to be refunded automatically, and the refund acknowledgement window drops from 15 to 10 days.
- Services supplied to a foreign office of the same entity can qualify as exports.
The Council also recommended extending e-invoicing, for taxpayers with turnover of ₹5 crore or more, to reverse charge supplies from unregistered persons and to imports of services. A PIB backgrounder has the full package.
What it means for founders
For Indian businesses the gains sit in registration, refunds and exports. D2C brands using marketplace warehouses in several states have had to register in each one; rule 14B, once notified, could cut that cost. Service companies billing a group entity abroad get a clearer path to export treatment. The e-invoicing change adds work for firms above ₹5 crore that buy from unregistered suppliers or import software and services.
What to do now
- Keep filing under the current rules, and watch CBIC and the GST portal for the notifications and their start dates.
- If you export services to an overseas group entity, ask your tax adviser to review your treatment against the proposed change to section 2(6)(v) of the IGST Act.
- Marketplace sellers should list the states where they hold or need registration, ready for rule 14B.
- Ask your billing vendor how it will handle e-invoices for reverse charge and imported services, or plan the change with your automation partner if invoicing is custom built.
Sources: PIB, Recommendations of the 57th Meeting of the GST Council; PIB, Next-Gen GST Process Reforms
This is general information, not legal or tax advice.