A Business Standard report published on 5 October 2026 says the GST Council may consider changes to input tax credit (ITC) for infrastructure, construction, real estate, hospitality and related services. These are reported proposals attributed to unnamed people familiar with discussions—not confirmed Council recommendations or rules. The Council’s listed “What’s New” material includes documents from its 56th meeting but does not show an October 2026 outcome; that listing alone cannot establish whether the proposals were considered or decided.
What ITC changes are reported for pipelines and telecom towers?
The report says the Council may reconsider ITC for fixed pipelines laid outside factory premises and for telecom towers. It describes the pipelines as business infrastructure carrying materials, including in refining, petrochemicals, fertilisers, gas distribution and water infrastructure. The potential change would address credit currently treated as unavailable for these assets because they fall within the description of immovable property.
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The policy issue is whether a business can offset tax paid on infrastructure used for its operations, rather than having that tax remain a project cost. The report does not provide proposed wording, conditions or an effective date. The Council’s historical record for its 7th/8th meeting material says it decided not to extend ITC to pipelines and telecom towers. That record explains the earlier policy position; by itself, it does not establish the current statutory treatment or any later change.
Could government-owned companies use their contracted project price?
A separate reported proposal concerns projects contracted between government-owned companies. The report says the companies are treated as related parties, so a notional value may replace the price they agreed in the contract for GST purposes. The Council could reportedly allow the contracted price to stand instead.
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If adopted, that approach could make the tax value more predictable for public housing, development and infrastructure contracts. The report gives no draft rule or worked example, so it does not establish how the change would affect a particular contract or valuation dispute.
What vehicle and insurance credits might contractors and developers receive?
The report says a broader release of blocked ITC—particularly for vehicles and insurance—could benefit contractors and developers because these costs recur across projects. It does not specify eligible vehicle classes, types of insurance, business-use tests or other proposed conditions. Businesses therefore cannot infer from the report that credit would be available for any particular vehicle or policy.
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What hospitality, restaurant and wellness services could be affected?
The reported approach would allow credit for certain services bought and resold within the same line of business, potentially reducing tax cascading when an intermediary or platform resells a service to a customer. Business Standard gives hotel-room services priced up to ₹7,500 a night, catering and restaurant services as examples. It describes those services as taxed at 5% without credit in this context; the report does not independently establish that as the current treatment for every service or transaction in those categories.
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The report also identifies outdoor catering, beauty treatments, health services, and cosmetic and plastic surgery as possible areas for a similar flow of credit. A hotel or resort operating a restaurant, spa or gym could reportedly receive credit on procured services used for guests. The report does not set out the legal scope, eligibility tests or specific service categories that would qualify.
There is relevant prior Council policy, but it is not confirmation of the reported 2026 proposals. The official recommendations from the 56th Council meeting say that a stand-alone restaurant cannot declare itself a “specified premises” and consequently cannot opt to pay GST at 18% with ITC. Those recommendations state that the meeting’s service-rate changes took effect on 22 September 2025. Separately, an official 2018 agenda discussed a proposed residential-construction regime of 5% GST without ITC and related treatment of transfer of development rights; that historical proposal should not be read as the reported 2026 measure.
Is helicopter travel also part of the reported changes?
The report separately says helicopter travel may be exempt when a passenger uses a seat-sharing service to or from a helipad, on the same footing as travel to or from an airport. It does not give a proposed clause, eligibility details or an implementation date.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What would make any of these changes effective?
A reported item under consideration is not the same as an approved recommendation, an issued notification or an effective GST rule. For businesses assessing a project or service, the operative details would need to establish the eligible asset or service, whether it is used in the business or resold, the applicable valuation rule, how credit may offset tax, and the start date. The Business Standard report provides no draft clauses or effective dates for these proposals.
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