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GST 2.0: What to Expect from the October 8 GST Council Meeting

By Freedom251 Team · · 4 min read

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The 57th GST Council meeting was reported as rescheduled to October 8, 2026, at Bharat Mandapam in New Delhi. Ahead of the meeting, reports pointed to possible changes to input tax credit refunds, e-commerce seller registration, criminal provisions and return filing—but no public formal agenda had confirmed those items. Treat them as proposals to watch, not decisions or rules already in force.

What is known about the meeting—and what is not

As of October 7, the meeting was reported to be scheduled for October 8 after being moved from October 7. Reports described it as the next phase of “GST 2.0”: attention shifting from rate rationalisation toward process and compliance reforms. The formal agenda had not been made public in the October 6 coverage, so the topics below are reported possibilities rather than a confirmed Council agenda. (Business Today, October 6, 2026; India Today, October 6, 2026)

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Finance Minister Nirmala Sitharaman was reported to have flagged e-invoicing and input tax credit at a recent ITRAF event. Those reported remarks offer context, but they do not establish what the Council will discuss or recommend.

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Possible input tax credit refunds for inverted-duty businesses

Businesses can face accumulated input tax credit when the tax rate on their inputs is higher than the rate on their output supplies. Reports said the Council could consider broadening refunds of unused credit to cover input services and capital goods as well as the existing categories. The proposal could ease working-capital pressure for affected businesses, but no expanded entitlement was confirmed before the meeting.

Business Today and India Today described a possible staggered approach: refunds relating to input services during the current financial year, with capital-goods refunds from April 2027. These are reported possibilities, not operative dates or a guarantee that either category will become refundable. (Business Today; India Today)

Potential changes to registration, returns and enforcement

Small sellers using e-commerce platforms

Simplifying GST registration for small businesses selling through e-commerce platforms was among the reported areas under consideration. The coverage did not specify a confirmed process, eligibility test or implementation date. Sellers should continue to follow current registration requirements unless an official change is announced.

Optional annual return with quarterly tax payments

A reported filing proposal would let certain businesses with turnover up to Rs 5 crore that supply unregistered persons opt for an annual return while paying tax quarterly. That Rs 5 crore figure is a reported threshold for this possible arrangement—not a general GST registration threshold and not a current filing option established by the reports.

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Arrest powers and prosecution

The Council could consider changes to GST arrest powers and prosecution. Reporting described a possible distinction between routine disputes—such as disagreements over input tax credit or classification—and deliberate fraud or serious offences. Any change to criminal provisions would require legislative amendments and Parliament’s approval, according to the reporting; a Council recommendation alone would not make such a change operative. (Business Today, October 6, 2026)

Commenting on the proposal, Jitendra Motwani, Partner – Tax Practice at Trilegal, said: “The proposed decriminalisation, with judicial oversight of arrests and routine ITC and classification disputes kept outside criminal reach, would be a forward-looking step that treats honest taxpayers as partners rather than suspects.” This is Motwani’s conditional assessment, not a Council decision. (India Today, October 6, 2026)

Export services and overseas branches

A possible clarification could address the GST treatment of services supplied through overseas branches of Indian companies. Reports framed this as a response to ambiguity and litigation, not a settled interpretation or confirmed change. The meeting’s outcome would need to be followed by the relevant official clarification or legal instrument before businesses could rely on a changed position.

Should consumers expect another GST rate overhaul?

A broad rate overhaul was not expected in the October 6 reports. They suggested the meeting was more likely to focus on process and compliance after the 2025 rate-rationalisation exercise. India’s Ministry of Finance said in a September 18, 2025 FAQ that the changes to rates on goods and services, except specified tobacco products and beedi, took effect on September 22, 2025. The stated exceptions retained existing rates pending a later notification. That prior implementation does not establish the October 2026 agenda. (Ministry of Finance FAQ, September 18, 2025)

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Reports also mentioned that taxation of the merchant discount rate (MDR) on UPI transactions might be raised, and that some states could discuss revenue effects of the earlier rationalisation. The reports said MDR was not on the formal agenda at the time. Neither possibility should be read as a confirmed tax change or a signal that UPI users’ costs will rise.

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How to read any announcement after the meeting

A Council discussion, a recommendation and a legally effective change are different stages. For any proposal, check the official announcement for what was actually recommended, then look for the notification or legislative change needed to put it into effect. This matters especially for criminal provisions, registration and return rules, and any new refund eligibility.

Before the meeting, reports also expected reforms to be phased through 2027 and suggested rate reviews might favor an annual timetable. Those were expectations attributed to officials in news coverage, not a published implementation schedule. No outcome statistics on the meeting’s effects could be available before it took place.

CA Mandar Telang, Vice President of the Bombay Chartered Accountants Society, said the possible reforms “would reduce avoidable litigation, ease working-capital pressures and make GST more aligned with its foundational objective of seamless flow of credit.” This is an expert view on the potential benefits, not evidence that the proposals were adopted. (India Today, October 6, 2026)

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