A fresh set of GST changes has come into force from today, November 1, 2026, and they touch something almost every business deals with: discounts and refunds. The Finance Ministry has notified the date for sections 153 to 155 of the Finance Act, 2026, which rewrite how post-sale discounts are handled and make refunds faster for businesses stuck with excess input tax credit and for small exporters.
The changes were first announced in the Union Budget 2026-27 and were cleared for rollout after the 57th GST Council meeting chaired by Finance Minister Nirmala Sitharaman in New Delhi on October 8. The notification was issued on October 26.
Change 1: Post-Sale Discounts Through Credit Notes
Until now, a discount given after a sale could be left out of the taxable value only if it had been agreed before or at the time of supply and could be linked to specific invoices. That condition caused endless disputes, especially for companies that give dealers year-end or volume-based incentives that are only worked out later.
From November 1, the amended Section 15(3)(b) of the CGST Act drops that requirement. Instead, the discount can be excluded from the value of supply if:
- the supplier issues a GST credit note for the discount, and
- the buyer reverses the input tax credit (ITC) that relates to that discount.
Section 34(1) has also been amended so that credit notes can expressly be issued for such discounts. Tax experts expect the change to help sectors where dealer schemes are routine, such as FMCG, pharmaceuticals, retail and consumer durables. Rahul Shekhar, partner at Nangia Global, told Business Today that the change "will enable businesses to offer discounts to dealers to drive sales."
Change 2: 90% Provisional Refunds for Inverted Duty Structure
Businesses with an inverted duty structure pay more GST on inputs than they collect on their output, so they build up unused credit. Under the amended Section 54(6), they can now get 90% of the eligible refund on a provisional basis, subject to risk checks, rather than waiting for full processing. Reports say such provisional refunds are expected within about seven days, which should free up working capital, particularly for manufacturers in textiles, footwear and fertilisers where inversion is common.
Change 3: No Rs 1,000 Floor for Export Refunds
Section 54(14) earlier blocked refund claims below Rs 1,000. For exports of goods made on payment of tax, that minimum has now been removed. This mainly helps small exporters who ship through courier and postal channels, often in small values, and who previously could not claim tiny refunds at all. The threshold still applies to other refund categories.
Quick Summary Table
| Effective date | November 1, 2026 |
| Legal basis | Sections 153–155, Finance Act 2026 |
| Notification date | October 26, 2026 |
| Post-sale discounts | Allowed via credit note; buyer must reverse ITC |
| Inverted duty refunds | 90% paid provisionally, subject to risk checks |
| Export refund minimum | Rs 1,000 floor removed for tax-paid exports of goods |
| Decided at | 57th GST Council meeting, October 8, 2026 |
What Is Coming Later
Not every decision from the GST Council takes effect today. According to officials, changes that need amendments to both Central and state GST laws are targeted for April 1, 2027. These include changes to arrest provisions, rationalised prosecution thresholds, tweaks to e-way bill rules and a minimum threshold of Rs 10,000 for issuing show-cause notices. A senior official said the rollout has been staggered because some changes need system upgrades on the GST portal. Automated sanctioning of refunds, where applicable, will apply to fresh claims filed after November 1 and not to pending ones.
What Businesses Should Do Now
- Suppliers: Review dealer incentive and discount schemes and make sure credit notes are issued correctly in GST returns.
- Buyers and dealers: Track credit notes received and reverse the related ITC on time; the supplier's benefit depends on it.
- Manufacturers with inverted duty: File refund claims promptly to make use of the 90% provisional payout.
- Small exporters: Small-value refund claims on tax-paid exports of goods are now possible, so it is worth reviewing past shipments within the time limit.
For most businesses, the takeaway is simple: discounts become easier to account for, and cash stuck in refunds should come back faster.
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