The Central Board of Indirect Taxes and Customs (CBIC) has notified November 1, 2026, as the effective date for GST amendments simplifying post-sale discounts, extending provisional refunds to eligible inverted duty structure claims, and removing the ₹1,000 minimum refund restriction for goods exported with payment of tax.
The government has brought Sections 153 to 155 of the Finance Act, 2026 into force from that date. These provisions amend Sections 15, 34 and 54 of the Central Goods and Services Tax Act, 2017.
The notification, issued through the Central Board of Indirect Taxes and Customs (CBIC), exercises the powers conferred by Section 1(2)(b) of the Finance Act, 2026.
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A key change concerns the conditions for excluding discounts granted after supply from the taxable value of a transaction.
Section 153 of the Finance Act, 2026 substitutes Section 15(3)(b) of the CGST Act. Under the revised provision, a post-supply discount can be excluded from taxable value where the supplier issues a credit note for the discount and the recipient reverses the input tax credit attributable to it, in accordance with Section 34.
The amendment removes the earlier express requirements that the discount must be established through an agreement entered into at or before the time of supply and specifically linked to the relevant invoices. The credit-note requirement and reversal of attributable ITC remain central to obtaining the GST adjustment.
For businesses offering subsequent price reductions, turnover incentives or other post-sale discounts, the change relaxes the statutory conditions governing reduction of taxable value. However, the issue of a commercial discount alone does not establish entitlement to the tax adjustment; the amended conditions must be satisfied.
Credit notes expressly permitted for qualifying discounts
Section 154 makes a corresponding amendment to Section 34(1) of the CGST Act.
It expressly includes a discount covered by Section 15(3)(b) among the circumstances in which a supplier may issue a credit note. This aligns the credit-note provision with the revised treatment of post-supply discounts under the valuation rules.
Read together, the two amendments connect the supplier’s reduction in taxable value with the issuance of a credit note and the recipient’s reversal of the corresponding ITC.
90% provisional refund facility extended to inverted duty structure
Section 155 amends Section 54(6) to extend the provisional refund framework to eligible refunds of unutilised ITC arising from an inverted duty structure.
The amendment covers the category specified in clause (ii) of the first proviso to Section 54(3), broadly involving accumulation of credit because the tax rate on inputs is higher than the rate on output supplies, subject to statutory exclusions.
Eligible claims can consequently fall within the framework for provisional sanction of 90% of the refundable amount, subject to the applicable conditions and procedure. This may help affected businesses access accumulated funds sooner, while final scrutiny of the refund claim continues.
₹1,000 refund restriction removed for goods exported with tax payment
Section 155 also amends Section 54(14), which contains the restriction on payment of refunds below ₹1,000.
The amendment creates an exception for refunds of tax claimed on goods exported out of India with payment of tax. Accordingly, the minimum amount restriction will no longer bar this specified category of export refund.
The exception is confined to the category identified in the amendment; it does not abolish the minimum refund restriction across all GST refund claims.
November 1 is the commencement date
The notification fixes a common commencement date for all three provisions. Although Parliament enacted the amendments through the Finance Act, 2026, their operation depended on a date appointed by the Central Government.
The uploaded notification does not prescribe separate transitional arrangements, new forms or detailed implementation procedures. Businesses will therefore need to read the amendments alongside the applicable statutory conditions and refund procedures when assessing individual transactions and claims.
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