CBIC GST circulars & notifications — 26 October 2026
On 26 October 2026 CBIC issued eight GST circulars (No. 257 to 264) and three Central Tax notifications (No. 03, 04 and 05 of 2026). Together they change how GST registration, refunds, appeals, ISD credit, bank ITC, export payments and e-invoicing work. Each one is explained in simple English, with a practical example and the official PDF.
Seedhi baat: registration aur refund ab tez, aur kai purane jhagde khatam.
Notification No. 03/2026–Central TaxSections 153 to 155 of the Finance Act, 2026 come into force
This notification switches on the GST changes made by the Finance Act, 2026 (sections 153 to 155). From 1 November 2026 those amendments to the CGST Act become law.
Effective
1 November 2026
Who it affects
All GST taxpayers
Key points in simple English
The Central Government has fixed 1 November 2026 as the start date for sections 153 to 155 of the Finance Act, 2026.
These sections amend the CGST Act. The new rules in Notification 05/2026 (below) are linked to them.
From 1 November 2026, follow the amended provisions for supplies and refunds. Read the official PDF and the Finance Act, 2026 for the exact wording.
Example
Think of it as the “start button”. Parliament passed the GST changes in the Finance Act, 2026; this notification fixes the date — 1 November 2026 — from which they actually apply.
What you should do
From 1 November 2026, apply the amended law to all new invoices, credit notes and refund claims.
Ask your accountant to review post-sale discount and credit-note practices against the amended provisions.
Notification No. 04/2026–Central TaxE-invoicing extended to reverse-charge purchases from unregistered persons and import of services
Notification 13/2020 lists the supplies for which e-invoicing applies. Until now it was only B2B supplies and exports. From 1 January 2027 two more are added: purchases from unregistered persons where you pay tax under reverse charge, and import of services.
Effective
1 January 2027
Who it affects
Businesses already covered by e-invoicing
Key points in simple English
E-invoicing now applies to four categories: (i) supplies to registered persons, (ii) exports, (iii) supplies received from an unregistered person where the recipient pays tax under reverse charge, and (iv) import of services.
This is relevant only if your turnover already makes e-invoicing compulsory for you.
Effective from 1 January 2027. Update your billing or ERP software before then so RCM self-invoices and import-of-service documents can generate an IRN.
Example
A Vapi manufacturer with ₹8 crore turnover (already on e-invoicing) uses an unregistered goods transport agency (GTA) and pays GST under reverse charge. From 1 January 2027, the self-invoice for this RCM purchase must also be reported on the e-invoice portal (IRP). The same applies when it pays for software or consultancy from abroad (import of services).
What you should do
Check whether your billing software can generate an IRN for RCM self-invoices and import-of-service invoices.
Train your accounts team before 1 January 2027.
If you are not covered by e-invoicing today, nothing changes for you.
A large amendment (98 pages) to the CGST Rules. The main changes are a new registration option for e-commerce sellers, rewritten rules for cancellation and suspension of registration, faster refunds and new due dates for two returns.
Effective
1 November 2026 (some parts from 1 Dec 2026, 1 Jan 2027 and 1 Apr 2027)
Who it affects
All GST taxpayers — especially e-commerce sellers, exporters, composition dealers and non-residents
Key points in simple English
New rule 14B — e-commerce sellers: a seller registered in one state can take GST registration in another state without an office there, by declaring an e-commerce operator’s warehouse as the principal place of business. Conditions: sales through an operator who collects TCS, output tax on B2B supplies (other than to the same PAN) up to ₹2.5 lakh a month, and the operator’s consent within 7 working days.
Registration cancellation (rule 20, from 1 Nov 2026): apply in REG-16 within 30 days of the event that requires cancellation (not required on the death of a sole proprietor). All returns due till that date must be filed first.
Grounds for cancellation (rule 21): composition return not filed for more than 3 months after its due date; monthly returns not filed for 6 continuous months; quarterly returns not filed for 2 continuous tax periods; or bank details not furnished under rule 10A.
System suspension and revocation (from 1 Apr 2027): the portal can suspend registration automatically in set cases. Where registration is cancelled by the system, you can apply for revocation in REG-21 within 180 days after filing the pending returns and paying the dues.
Faster refunds: the refund application must be acknowledged, or deficiencies pointed out, within 10 days instead of 15. If nothing happens in 10 days, it is treated as acknowledged. The portal will issue the provisional refund order (RFD-04) within 3 working days, based on risk checks. A new RFD-01 form applies from 1 December 2026.
Due dates: GSTR-4 (composition annual return) moves from 30 April to 30 June. GSTR-5 (non-resident taxable person) moves from the 20th to the 13th of the next month.
Blocking of ITC (rule 86A, from 1 Apr 2027): blocking will be done by the proper officer through an order in the new FORM DRC-26, valid for at most one year.
Other changes: ISD rules aligned with Circular 260, GST practitioners can update their enrolment in REG-14, e-way bill rules cover metro railway, and several forms (CMP-02/04/08, GSTR-4, GSTR-6, GSTR-9/9C instructions, REG and DRC forms) are revised.
Example
A Surat saree seller registered in Gujarat sells on an online marketplace that stores goods in a Maharashtra warehouse. Under the new rule 14B, the seller can take GST registration in Maharashtra using that marketplace warehouse as the principal place of business, without renting an office there, if the conditions are met.
What you should do
Composition dealers: note the new GSTR-4 due date of 30 June.
Closing a business? Apply for cancellation in REG-16 within 30 days of closure.
Do not let returns stay pending: 6 months (monthly) or 2 quarters (quarterly) of non-filing can lead to cancellation.
Exporters and refund claimants: watch for faster acknowledgement (10 days) and system-generated provisional refunds.
Circular No. 257/03/2026-GSTGuidelines for handling applications for GST registration
A detailed guide (38 pages, with FAQs) for applicants on filling FORM GST REG-01 correctly so that registration is granted quickly. It also confirms the time limits the officer must follow.
Effective
26 October 2026
Who it affects
Anyone applying for a new GST registration
Key points in simple English
If you complete Aadhaar authentication, the officer must process the application within 7 working days. If physical verification is required, the limit is 30 days.
The officer can raise a query (REG-03) within 7 working days only for specified reasons, such as an illegible document or an address mismatch. You reply in REG-04 within 7 working days, and the officer must decide within 7 working days of your reply.
If the officer takes no action within the time limit, registration is deemed approved and the certificate (REG-06) is issued automatically on the portal.
Principal place of business proof: for your own premises, upload a clear ownership document. For rented premises, upload a registered rent or lease agreement. Otherwise choose “Consent”, “Rented/Leased” or “Shared” correctly. Upload recent photographs of the proprietor, partners or directors.
Bank details (rule 10A): submit within 30 days of registration, or before filing GSTR-1/IFF, whichever is earlier. Up to 10 accounts can be added.
If an application is rejected, you can file a fresh one after correcting the deficiencies mentioned in the order.
Example
Ramesh applies for GST registration for his new shop in Vapi, completes Aadhaar authentication and uploads a clear registered rent agreement. The officer must decide within 7 working days. If the officer does nothing in that time, Ramesh’s registration is treated as approved automatically.
What you should do
Always opt for Aadhaar authentication — it gives the fastest processing.
Upload clear, readable documents; the address in the application must match the proof exactly.
Reply to any REG-03 query within 7 working days.
Add your bank account within 30 days of getting GSTIN.
Circular No. 258/04/2026-GSTClarification on demand, adjudication and appeal proceedings
Instructions to GST officers to issue clear notices and fair, reasoned orders. This is useful for taxpayers because orders that do not follow these rules can be challenged.
Effective
26 October 2026
Who it affects
Taxpayers facing GST notices, orders or appeals
Key points in simple English
A pre-show cause notice intimation (DRC-01A, Part A) should be issued wherever feasible, so the issue can be settled before a formal notice.
A show cause notice must state the allegations clearly and specifically, with the DRC-01 summary. It should be issued well before the time limit under sections 73, 74 or 74A, not at the last minute.
Natural justice: a proper hearing must be given, and the order must deal with every submission and record reasons. Vague, non-speaking orders lead to remand or reversal.
Officers may use AI or other tech tools only with human oversight. Anything an AI tool produces must be independently verified, and the officer remains responsible for the order.
Rectification (section 161): apply within 3 months of the order. The rectification order is to be passed within 6 months.
First appeal: the APL-04 summary must be uploaded with the appellate order. An appeal should not be rejected at the admission stage on issues that relate to the merits.
Example
A trader receives a show cause notice that only says “ITC wrongly availed” without giving invoice details. Under this circular, notices must state allegations clearly and specifically, and the final order must answer every point the trader raised in reply. A vague, non-speaking order can be challenged in appeal.
What you should do
Reply to a pre-SCN intimation (DRC-01A) promptly — the matter may end there.
Keep a copy of every reply and ask for a personal hearing in writing.
If the order ignores your submissions, raise this in appeal or apply for rectification within 3 months.
Circular No. 259/05/2026-GSTClarification on pre-deposit for filing appeals (sections 107(6) and 112(8))
Settles common disputes about how much pre-deposit is required to file an appeal and how to get it refunded when you win.
Effective
26 October 2026
Who it affects
Taxpayers filing GST appeals
Key points in simple English
Admitted amount: the part of the demand you accept. Pay it in full. Tax in dispute: the part you challenge. The pre-deposit is 10% of the disputed tax. You make this choice yourself, in Table 14 of APL-01 or Table 20 of APL-05.
For an appeal to the Tribunal, the 10% is calculated on the liability confirmed by the Appellate Authority that you still dispute. It is in addition to the amount already paid at the first appeal.
If you win, the order does not need to say “refund the pre-deposit”. File the refund in RFD-01 under the category “on account of order”.
The refund cannot be denied just because the department plans to appeal, or has appealed. Only a stay order from the Tribunal or a court can stop it.
Interest under section 115 is calculated separately for each level, from the actual date each pre-deposit was paid.
If the matter is remanded, the pre-deposit is refundable. In a partial remand, the confirmed demand and interest are adjusted first and the balance is refunded.
Example
A demand of tax ₹10 lakh is raised. You accept ₹2 lakh and dispute ₹8 lakh. You pay ₹2 lakh in full plus 10% of ₹8 lakh, i.e. ₹80,000, as pre-deposit to file the appeal. If you win, you claim the ₹80,000 back in RFD-01 (“on account of order”) with interest — even if the department says it will appeal.
What you should do
Decide carefully what you admit and what you dispute while filing APL-01.
After a favourable order, file the refund in RFD-01 without waiting for the department’s appeal decision.
Keep payment challans for each appeal level, because interest is counted from each payment date.
Circular No. 260/06/2026-GSTClarification on issues pertaining to Input Service Distributor (ISD)
Explains who takes ISD registration, when credit must be distributed, and who must meet ITC conditions and make reversals.
Effective
26 October 2026
Who it affects
Companies with branches in several states that use ISD
Key points in simple English
Each registration (separate business vertical or place of business in the same state) that receives input service invoices for distinct persons must take an ISD registration. More than one ISD in a state is allowed.
The recipients of the credit, not the ISD, must satisfy the ITC conditions of sections 16 and 17. If credit is distributed wrongly, the ISD faces a penalty and the excess is recovered from the recipients.
Credit is “available for distribution” in the month the ISD checks it is prima facie eligible after it appears in GSTR-6A. Distribute it in that same month, showing eligible and ineligible credit separately.
The ISD distributes the full credit. The recipients make reversals under section 17(1), 17(2) or 17(4) and rules 38, 42 and 43.
Invoices issued under rule 54(1A) to transfer reverse-charge credit to the ISD are only a credit-transfer mechanism. They are not “turnover in state”, not “Net ITC” for refunds under rules 89(4) and 89(5), and need no reversal by the issuer.
Example
A company’s head office in Mumbai receives one invoice for an all-India advertising campaign. As an ISD, the head office distributes the credit to its Gujarat and Tamil Nadu GSTINs. Each branch, not the head office, must check that it meets the ITC conditions and must do its own reversals (for example, for exempt supplies).
What you should do
Take ISD registration for each registration that receives common service invoices.
Distribute credit in the month you confirm it is eligible, showing eligible and ineligible credit separately.
Do not include rule 54(1A) transfer invoices in turnover or “Net ITC” for refunds.
Circular No. 261/07/2026-GSTClarification on section 17(4) — 50% ITC option for banks, financial institutions and NBFCs
Explains which registrations of a bank or NBFC can choose the 50% ITC option and how to report it in GSTR-3B.
Effective
26 October 2026
Who it affects
Banks, financial institutions and NBFCs
Key points in simple English
A registration that does not accept deposits or give loans (for example, one doing only bullion trading) cannot opt for section 17(4).
If one registration that accepts deposits or gives loans opts for 50% ITC, every such registration of that entity must also follow it.
The relaxation in the second proviso (supplies between units with the same PAN) applies only if the supplying unit has also opted for section 17(4).
GSTR-3B: reverse ineligible credit (section 17(5) and non-business use) and the remaining 50% permanently in Table 4(B)(1). Reverse credit that is temporarily ineligible in Table 4(B)(2) and reclaim it later in Table 4(A)(5) and 4(D)(1). Under IMS, keep such invoices “pending”.
For past periods, officers should not take an adverse view of a different reporting method, as long as the ITC actually availed matches these principles.
Example
An NBFC has one GSTIN for lending and another only for gold bullion trading. If the lending GSTIN opts for 50% ITC under section 17(4), all its lending GSTINs must follow it, but the bullion-only GSTIN cannot opt and claims ITC under the normal rules.
What you should do
Banks and NBFCs: review which GSTINs have opted for section 17(4).
Report the 50% reversal in Table 4(B)(1) of GSTR-3B every month.
Keep temporarily ineligible invoices “pending” in IMS.
Circular No. 262/08/2026-GSTITC on demo vehicles for dealers in the dealer-agency model
Good news for car dealers. ITC on demo (test-drive) vehicles is now allowed even when the dealer works as an agent of the manufacturer.
Effective
26 October 2026
Who it affects
Authorised motor-vehicle dealers
Key points in simple English
Para 4.6 of Circular 231/25/2024-GST, which denied ITC on demo vehicles in the dealer-agency model, is withdrawn.
In both the traditional dealership model and the agency model, demo vehicles serve the same purpose of promoting sales of similar vehicles.
The words “further supply of such motor vehicles” in section 17(5)(a)(A) cover vehicles used to promote similar vehicles, so ITC is not blocked.
Example
A car dealer working under the agency model buys two demo cars from the manufacturer for test drives. Earlier, ITC on these cars was denied. Now the dealer can claim ITC on them, just like a traditional dealer.
What you should do
Dealers under the agency model can claim eligible ITC on demo vehicles.
If ITC was reversed or denied earlier on this ground, discuss the past period with your consultant.
Circular No. 263/09/2026-GSTClarification on receipt of payment for export of goods or services
Confirms that more ways of receiving export payments count as valid for treating a supply as an export of services and for keeping export refunds.
Effective
26 October 2026
Who it affects
Exporters of services and goods, stock brokers, reinsurance brokers
Key points in simple English
Payment received in convertible foreign exchange, or in repatriable INR accounts such as SNRR or INR Nostro (Rupee Vostro) accounts, satisfies the export-of-services condition under section 2(6)(iv) of the IGST Act.
Stock brokers paid by FPIs, NRIs or OCIs through repatriable INR accounts (SNRR, NRE) qualify. Payments from NRO accounts must be routed through SNRR or NRE accounts.
Setting off export receivables against import payables, as permitted by RBI, is a valid way of receipt.
Commission retained by Indian reinsurance brokers under the net-retention mechanism is treated as received.
Rule 96B: the time limit to realise export proceeds for goods follows RBI’s Master Direction, including any extension. If the AD bank writes off the realisation, the refund will not be recovered.
Example
A software exporter in Vapi is paid by a foreign client in rupees through an SNRR account. This now clearly satisfies the export-of-services payment condition, so the supply qualifies as an export (zero-rated).
What you should do
Keep bank certificates (FIRC/BRC or bank statement) showing receipt in SNRR, Nostro or NRE accounts.
For set-off of export receivables against import payables, keep the RBI/AD bank approval on record.
Track RBI timelines for realisation of export proceeds to avoid refund recovery.
Circular No. 264/10/2026-GSTOmission of rule 96(10) to apply retrospectively from 23.10.2017
Big relief for exporters. Following the Supreme Court judgment in Goodluck India Ltd. (6 August 2026), the omission of rule 96(10) applies from 23 October 2017, the date the rule began.
Effective
26 October 2026
Who it affects
Exporters with pending IGST refund disputes
Key points in simple English
Rule 96(10) stopped exporters who bought inputs under certain exemption notifications from claiming IGST refunds on exports. It was omitted from 8 October 2024.
The Supreme Court held that because there was no saving clause, the omission applies to all proceedings pending on that date.
CBIC has therefore clarified that the omission applies retrospectively from 23 October 2017. Pending cases must be decided in line with the judgment.
The same treatment applies to the omission of rules 89(4A) and 89(4B).
Example
An exporter imported raw material duty-free under Advance Authorisation in 2021 and also claimed IGST refund on exports. The department had asked for this refund back under rule 96(10). Because the rule’s omission now applies from 2017, such pending demands should be dropped in line with the Supreme Court judgment.
What you should do
Exporters with pending rule 96(10), 89(4A) or 89(4B) cases should cite this circular and the Goodluck India judgment.
Ask your consultant to review pending show cause notices and appeals.
Source: All PDFs are the official documents issued by CBIC (Central Board of Indirect Taxes & Customs), Ministry of Finance, as published on the CBIC tax information portal. The summaries are our simple-English explanation for general information. If there is any difference, the official text prevails. Published on this page: 28 October 2026.