The 57th meeting of the Goods and Services Tax Council, initially scheduled for September 12, 2026, has reportedly been postponed to October 7, 2026, owing to logistical and security challenges arising from the 18th BRICS Summit in New Delhi.

Sources in the Finance Ministry indicated that conducting the GST Council meeting on September 12—the opening day of the BRICS Summit—could pose considerable logistical difficulties. India is scheduled to host the international summit at Bharat Mandapam in New Delhi on September 12 and 13. 

The proposed rescheduling means that taxpayers and businesses may have to wait nearly another month for the Council to take up several pending GST reforms, including measures relating to input tax credit, refunds, registration and litigation management.

Buy Now: E-Handbook: Draft Replies to GST Notices On 40+ Issues

GST Council to Meet After Gap of More Than a Year

The GST Council has not met for more than a year. Its previous meeting—the 56th GST Council meeting—was held on September 3, 2025.

That meeting approved a substantial rationalisation of the GST rate structure, moving away from the earlier four principal slabs of 5%, 12%, 18% and 28%. The revised structure broadly comprises the two main rates of 5% and 18%, with a special 40% rate applicable to specified ultra-luxury and sin goods.

With the earlier rate rationalisation exercise already implemented, the forthcoming meeting is expected to concentrate largely on procedural reforms, input tax credit disputes, registration difficulties and the mounting volume of GST litigation.

Changes Expected in State Representation

The composition of the Council is also expected to undergo notable changes following political transitions in West Bengal, Tamil Nadu and Kerala.

West Bengal Finance Minister Swapan Dasgupta is expected to participate in the meeting, while Kerala Chief Minister V.D. Satheesan and Tamil Nadu Finance Minister Dr N. Marie Wilson are likely to represent their respective states.

The participation of new state representatives could influence deliberations on revenue concerns, compliance reforms and the division of administrative responsibilities between the Centre and states.

Protection of Buyers’ ITC May Be a Major Issue

One of the most consequential questions expected to come before the Council concerns the denial of input tax credit to a purchasing dealer when the supplier has collected GST but failed to deposit it with the government.

Under the existing framework, genuine recipients frequently face demands for reversal of ITC, along with interest and penalties, even where they possess valid tax invoices, have received the goods or services and have paid the supplier through recognised banking channels.

Tax experts have argued that a compliant buyer should not automatically be penalised for a default committed by the supplier, particularly where the buyer has no control over the supplier’s subsequent conduct. Several court rulings have also examined whether tax authorities must first proceed against the defaulting supplier before recovering credit from a bona fide purchasing dealer.

The Council may therefore consider a combination of legal safeguards and technology-based verification measures to protect genuine taxpayers. Such measures could include recognising proof of payment, receipt of supply and other transaction records before denying credit solely because the supplier failed to discharge the tax.

Relief Sought From Blocked Credit Restrictions

Industry representatives have also called for a review of the restrictions on ITC under Section 17(5) of the Central Goods and Services Tax Act.

Businesses have repeatedly sought relaxation of the provisions blocking credit on works contracts, construction-related expenditure and motor vehicles used for legitimate commercial or employee-related purposes. According to experts, the existing restrictions increase the effective cost of business and interrupt the credit chain that GST was intended to establish.

The Council may also be urged to allow taxpayers to use accumulated ITC for discharging tax payable under the reverse charge mechanism. At present, reverse-charge liabilities generally have to be paid in cash, even where a taxpayer has a substantial unutilised balance in the electronic credit ledger.

Permitting the utilisation of credit for such liabilities could ease working-capital pressure, particularly for businesses operating with persistent ITC accumulation.

Inclusion of Input Services in Inverted-Duty Refund Formula

Another long-standing demand relates to refunds arising from an inverted duty structure, where the tax rate on inputs is higher than the rate applicable to the finished product.

The present refund formula primarily considers credit accumulated on account of input goods and excludes input services. Businesses operating in affected sectors contend that this exclusion leaves a substantial portion of legitimate credit stranded.

Experts have recommended amending the refund mechanism to include ITC attributable to input services. Such a change would more accurately reflect the total credit accumulated by businesses and reduce the financial burden created by inverted tax structures.

Rising GST Litigation a Serious Concern

The sharp increase in GST litigation is likely to be another major subject of discussion. Taxpayers continue to face disputes over classification, valuation, place of supply, ITC eligibility, procedural lapses and retrospective application of departmental interpretations.

Experts have called upon the Council to issue clearer and more uniform guidance on disputed provisions to reduce conflicting interpretations by central and state tax authorities. They have also suggested mechanisms for regularising past tax positions where businesses acted on a reasonable interpretation of the law.

Legacy disputes in sectors such as online gaming may require particular attention. Businesses have sought clarity and an appropriate dispute-resolution framework for periods preceding major legislative and rate changes.

A settlement, amnesty or regularisation mechanism could help close older disputes, reduce the burden on appellate authorities and allow tax administrations to concentrate on cases involving deliberate tax evasion.

Streamlining Compliance for PAN-India Businesses

Large companies operating across India continue to face difficulties arising from multiple state registrations, inconsistent practices among tax authorities and repeated documentation requirements.

The Council is expected to examine ways to simplify registration and administration for businesses operating in several states. Greater uniformity in scrutiny, registration approval, audits and refund processing has been sought to ensure that similarly situated taxpayers are not subjected to different requirements in different jurisdictions.

The postponement to October 7 gives the Centre, states and officers’ committees additional time to refine the proposals. However, businesses will be looking for concrete decisions on ITC protection, blocked credits, refunds and dispute reduction when the Council eventually meets.

Read More: Negative Blocking of Electronic Credit Ledger Permissible for GST Recovery U/s 79: Madras High Court