IndiaPosted at: Oct 28 2026 9:52AM


Centre speeds up GST refunds, cuts tax on retreaded tractor tyres; major rule changes from Nov 1

New Delhi, Oct 28 (UNI) The central government has notified major changes to the Goods and Services Tax (GST) framework, introducing faster refund processing, simplified registration for eligible online sellers, lower taxation on retreaded tractor tyres and tighter compliance requirements for scrap transactions, with several key provisions taking effect from November 1.
The amendments, notified by the Ministry of Finance following recommendations of the GST Council, also revise rules governing electronic invoicing, input tax credit, registration and cancellation procedures.
One of the most significant changes reduces the time allowed for acknowledging GST refund applications from 15 days to 10 days. Tax authorities must also communicate any deficiencies within the prescribed 10-day period.
Under the revised rules, applications will be deemed acknowledged if officials fail to issue an acknowledgement or communicate deficiencies within that period.
The notification states that "such application shall be deemed to have been acknowledged" if the prescribed conditions are met.
The government has also introduced a risk-based system for generating provisional refund sanction orders through the GST portal within three working days of acknowledgement. However, this does not guarantee that refunds will be credited to taxpayers' bank accounts within three days.
Another major change expands the scope of refunds arising from an inverted duty structure, where taxes paid on inputs exceed the tax payable on finished supplies.
The revised formula includes eligible input services on which input tax credit is availed on or after November 1. Provisions allowing eligible input tax credit on capital goods to be included in refund calculations will apply from April 1, 2027, subject to specified conditions.
The government has also introduced Rule 14B, providing a special registration mechanism for suppliers selling goods through e-commerce operators required to collect tax at source.
Eligible sellers will be permitted to obtain GST registration in states where they have no physical business presence by declaring an e-commerce operator's warehouse as their principal place of business.
The facility will be subject to conditions, including consent from the e-commerce operator and a monthly output tax liability not exceeding Rs 2.5 lakh on specified supplies to registered persons, excluding those registered under the same Permanent Account Number.
E-commerce operators will have seven working days to communicate consent, while applications will be subject to prescribed Aadhaar authentication, document verification and physical verification requirements.
In separate tax-rate amendments, the government has moved retreaded tractor tyres from the 18 per cent GST category to the 5 per cent category, effective November 1.
Pre-packaged and labelled animal, vegetable and organic fertilisers remain covered by the 5 per cent category, with registered seaweed-extract-based biostimulants explicitly included in the relevant entry.
Psyllium seeds, commonly known as isabgol, have also been added to the GST exemption schedule.
The government has further expanded reverse-charge taxation to cover supplies of used cooking oil, plastic waste and scrap, tyre waste and scrap, and electrical and electronic waste and scrap from unregistered suppliers to registered recipients.
Under this mechanism, the registered recipient, rather than the unregistered supplier, is responsible for paying the applicable GST.
Related amendments also revise registration exemptions and tax-deduction-at-source provisions for specified transactions involving these goods and metal scrap.
The changes will be implemented in phases. While several major provisions take effect on November 1, certain changes to registration amendments and refund documentation will apply from December 1.
Changes extending notified electronic invoicing categories to specified reverse-charge transactions involving unregistered suppliers and imports of services will take effect on January 1, 2027.
Further amendments concerning input tax credit on eligible capital goods and specified registration cancellation and revocation procedures are scheduled for April 1, 2027.
The measures represent a substantial revision of GST compliance procedures, combining faster refund processing and revised tax treatment with additional safeguards governing registration and transactions in selected sectors.
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