The GST Council approved a risk-based route for provisional refunds of up to 90% of eligible zero-rated and inverted-duty-structure claims. But its reform announcement does not say tax officers’ arrest powers were scrapped. The refund measure and the arrest-power claim have different legal status and should not be conflated.
What the GST Council approved for refunds
At its 56th meeting, the GST Council recommended risk-based provisional sanction of 90% of qualifying refund claims in two categories: zero-rated supplies and inverted duty structure (IDS). Provisional payment is an advance against a claim, not a final approval of the entire refund. The Council’s announcement set 1 November 2025 as the operationalisation date for these changes. GST Council, 56th-meeting press release.
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Zero-rated refund claims
For qualifying zero-rated claims, the Council recommended sanctioning 90% provisionally after system-based risk identification and evaluation. In exceptional cases, an officer may instead undertake detailed scrutiny, recording the reasons in writing. The Council said this change would be operationalised from 1 November 2025.
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For IDS claims, the Council recommended amending section 54(6) of the CGST Act to allow 90% provisional sanction on a risk-evaluated basis, similar to zero-rated refunds. Because the statutory amendment was pending when the Council issued its release, it said CBIC would direct central tax field formations to grant a provisional refund equivalent to 90% of the amount claimed in the interim. The stated operationalisation date was 1 November 2025.
Low-value export consignments
The Council also recommended removing the minimum threshold for refunds on low-value export consignments where tax had been paid, particularly to assist small exporters using courier and postal channels. This was a recommendation to amend section 54(14); the announcement alone does not establish that this or every other part of the wider package had taken effect.
What is the latest legal status?
A Council recommendation, an administrative instruction, an enacted amendment and the commencement of that amendment are separate steps. The September 2025 release described recommendations and administrative arrangements; it specifically noted that a statutory amendment was still needed for the IDS change.
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The GST Council Secretariat’s March 2026 newsletter reports that the Finance Act, 2026 received presidential assent on 30 March 2026. It also says that some amendments—including provisional refunds of unutilized input tax credit in IDS cases—were still to take effect on dates to be notified. The newsletter separately reports that the omission of IGST Act section 13(8)(b), concerning the place of supply for intermediary services, took effect with the Finance Act’s assent. These are distinct changes; the effective date for one should not be assumed to apply to another. GST Council Secretariat, March 2026 newsletter.
Were GST officers’ arrest powers scrapped?
The cited 56th-meeting release does not announce a repeal or other change to tax officers’ arrest powers. A historical GST Council record from the law-drafting period documents debate about arrest powers and proposals to limit or regulate them, but that record is not evidence of a later enacted repeal. GST Council, 7th-meeting record.
Accordingly, the claim that arrest powers were scrapped is not substantiated by these official materials. Confirming a repeal would require a specific enacted amendment, commencement notification or official government statement. This is a limit on what these sources establish, not proof that no later legal instrument exists.
Quick Recap
What businesses should take from the announcement
- Check whether a claim falls into the zero-rated or IDS category; the 90% provisional route described by the Council is not a blanket refund for every GST claim.
- Treat provisional sanction as an interim payment subject to the applicable claim process, not as final acceptance of the whole claim.
- For IDS refunds, distinguish the Council’s recommendation and interim CBIC administrative route from the statutory amendment and its notified commencement date.
- Do not rely on the arrest-power headline as a statement of current law without checking the relevant amendment or official notification.
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