GST Council 57th Meeting: Easier Compliances, No Arrests, Faster Refunds, Fewer Notices
On 8 October 2026, the 57th GST Council meeting in New Delhi, chaired by Union Finance Minister Smt. Nirmala Sitharaman, shifted the focus from rate cuts (the 56th meeting) to process reform: registration, returns, refunds, disputes and prosecution. For Mumbai’s traders, manufacturers, exporters, e-commerce sellers and service providers, these changes could meaningfully reduce compliance friction.
As a CA in Mumbai advising businesses on GST every day, here is our plain-language summary of what matters most.
56th meeting focus
GST rate cuts.
57th meeting focus
Process reform: registration, returns, refunds, disputes and prosecution.
- No arrestsSection 69 arrest powers to be omitted
- ₹5 croreNew prosecution threshold (up from ₹1 crore)
- ₹10,000No show cause notice where tax is below this
- 90%Provisional refund for zero-rated & inverted duty claims
1. Easier GST Registration, Amendment and Cancellation
If you are planning GST Registration in Mumbai, the process is set to become faster and more predictable:
- A comprehensive circular and FAQs on documents required, plus drop-down selection of documents in FORM GST REG-01, to cut rejections and queries.
- Automatic acceptance of amendments to registration details on the portal, except changes to the Principal Place of Business (PPoB). Taxpayers under the automatic route (Rule 14A) get automatic acceptance even for PPoB changes.
- Automatic acceptance of cancellation applications (FORM GST REG-16) once returns are filed and dues paid, rolled out in two phases.
- New Rule 14B for small e-commerce sellers: they can register in other States by declaring the platform’s warehouse as their PPoB, without setting up a physical place of business, where ITC passed on is not more than ₹2.5 lakh per month.
Why it matters: Mumbai sellers who sell through e-commerce platforms can expand to other States with far less paperwork. Planning a new entity for this? See our business registration in India services.
2. Fewer Mismatches in GST Returns
For anyone using GST Return Filing Services in Mumbai, the headline is a push to reduce mismatches and notices:
- Enhancements to GSTR-1/1A/IFF for better reconciliation with GSTR-3B.
- New portal statements: an Electronic Statement of tax paid under reverse charge and ITC claimed (Rule 86D), and an Electronic Credit Reversal and Reclaim Statement (Rule 86C).
- A mechanism to correct liability and ITC in GSTR-3B so it aligns with GSTR-1 and GSTR-2B, with Invoice Management System (IMS) rules for accepting, rejecting or keeping documents pending. Proposed to apply from the April 2027 return, after public consultation.
- Late fee waiver on delayed GSTR-3B/GSTR-1 under section 39(1) for taxpayers with turnover up to ₹5 crore, if the return is filed by the end of the month in which it was due.
- An in-principle optional Annual Return Quarterly Payment (ARQP) scheme for businesses with turnover up to ₹5 crore making only B2C supplies.
Most significant change: e-invoicing extended. E-invoicing will cover RCM purchases from unregistered persons and import of services, for taxpayers with turnover of ₹5 crore and above.
This has a big impact on businesses above ₹5 crore turnover, as it adds the compliance of generating these invoices. Clean books make this easier; our accounting services in Mumbai can help you get ready.
3. Faster & Automated Refunds
Working capital is a real concern for all businesses, but especially for exporters and manufacturers. Refunds are being automated in two phases:
Phase 1
- Excess cash ledger balance refunded automatically.
- Acknowledgement or deficiency memo time cut from 15 to 10 days, with deemed acknowledgement.
- 90% provisional refund for zero-rated supplies and inverted duty claims.
Phase 2
- Fully automated acknowledgement and sanction for zero-rated supply claims, after risk evaluation.
- Refund of accumulated ITC on capital goods (zero-rated supplies and inverted duty), spread over 60 months, for ITC availed on or after 1 April 2027; and on input services (inverted duty) for ITC availed on or after 1 November 2026.
4. Relief on Notices, Penalties and Prosecution
| Area | Earlier | Recommended |
|---|---|---|
| Arrest powers (section 69) | Available | Withdrawn (section omitted) |
| Prosecution threshold | ₹1 crore | ₹5 crore |
| General penalty (section 125) | ₹25,000 | ₹10,000 |
| Show cause notice | Issued regardless of amount | None where tax is below ₹10,000 |
| Appeal pre-deposit (penalty-only cases) | No cap | Capped at ₹40 crore (₹20 cr CGST + ₹20 cr SGST) |
- Reduced 5% penalty in non-fraud cases if tax and interest are paid within 30 days (section 73) or 60 days (section 74A) of the adjudication order.
- Opportunity of being heard before ITC blocking under Rule 86A.
- E-way bill interception only on specific intelligence, authorised by an officer not below Joint Commissioner, with no interception in transit States.
5. Better Input Tax Credit
- Section 17(5) restrictions removed on items such as outdoor catering, health and life insurance, telecom towers, pipelines outside factory premises, free samples, and goods written off on expiry of shelf life as required by law.
- Limited ITC in the same line of business for restaurant and outdoor catering, hotel accommodation up to ₹7,500 per unit per day, and gym and fitness services.
6. Boost for Service Exporters
The condition that supplier and recipient must not be establishments of a distinct person is being removed for “export of services”. This eases refunds for Indian providers serving their foreign offices or branches.
Place-of-supply rules are also being aligned, and goods delivered to an SEZ/FTWZ for overseas buyers get clearer zero-rating treatment.
A Few Rate Changes Worth Noting
- 5% GST option (restricted ITC) on passenger transport and rental of motor vehicles using electric vehicles, where battery charging cost is included.
- 5% GST without ITC on delivery services through e-commerce operators.
- Reverse charge on waste and scrap of plastics, e-waste, tyres and used cooking oil supplied by unregistered persons, with 2% TDS on B2B supplies of such scrap.
- Nil GST on psyllium seeds, and exemptions for coffee curing and seed storage services.
Important: These Are Recommendations, Not Yet Law
The Council’s recommendations take effect only through the relevant circulars, notifications and law amendments. Effective dates differ (for example, April 2027 for the return mechanism). Track your monthly and annual deadlines on our Compliance Calendar FY 2026-27.
Do not change your compliance approach until the notifications are issued.
How Anam Shaikh & Associates Can Help
At Anam Shaikh & Associates, a trusted CA firm in Mumbai, our team handles GST end to end, including:
- GST registration, return filing and refunds in Mumbai
- GST audit services and annual return reconciliation
- Replies to GST notices, show cause notices and appeals
- E-invoicing and ITC reconciliation through our accounting services
- Tax advisory services and GST health checks
- Outsourced accounting for growing businesses
Get a GST health check for your business
Contact Anam Shaikh & Associates, Chartered Accountants, Mumbai for GST registration, return filing, refunds, notice replies and advisory.