GST Changes in Budget 2026: What the Finance Act 2026 Amended, and What It Did Not

13 Feb 2026

Quick answer: The Finance Act, 2026 (enacted 30 March 2026) made five GST changes: post-sale discounts through credit notes without a prior agreement, 90% provisional refunds for inverted duty structure claims, no minimum amount for refunds on goods exported on payment of tax, an interim appellate authority for advance rulings, and the removal of the special place-of-supply rule for intermediary services. Budget 2026 did not change GST return frequency, the QRMP scheme, e-invoicing thresholds, late fees or GST rates.

Updated: 23 October 2026 | Regi Tom Antony & Associates, Chartered Accountants, Kochi

Budget 2026 was not a big GST budget. Rates are set by the GST Council, and most compliance rules are changed through CGST Rules and CBIC notifications rather than the Finance Act. What the Finance Act, 2026 did change is narrower but useful, especially for businesses giving trade discounts, manufacturers with inverted rates, exporters and service intermediaries. Here is what changed, when it applies, and what did not change.

What GST changes did Budget 2026 make?

As at September 2026 the three changes marked "to be notified" had not yet been brought into force. Check the latest CBIC notifications before relying on them.

1. Post-sale discounts through credit notes (sections 15(3) and 34)

Until now, a discount given after the supply reduced the taxable value only if it was agreed before or at the time of supply and linked to specific invoices. That condition led to long disputes over year-end, volume and target discounts. Once notified, a post-sale discount will reduce the value when it is given through a section 34 credit note and the recipient reverses the corresponding input tax credit. Businesses that give trade discounts should design their credit-note process now: discount policy, credit note, and evidence of the buyer's ITC reversal.

2. Provisional refunds for inverted duty structure (section 54(6))

Provisional refund of 90% of the claim has so far been available only for zero-rated supplies. Once notified, it extends to inverted duty structure refunds, where the GST rate on inputs is higher than on outputs. Manufacturers in Kerala with inverted rates, which became more common after the September 2025 rate changes, can expect faster cash flow on RFD-01 claims.

3. Export refunds with no minimum amount (section 54(14))

Section 54(14) bars refunds below ₹1,000. Once notified, that minimum will no longer apply to refunds of tax paid on goods exported on payment of IGST, so small export consignments qualify for refund.

4. Interim appellate authority for advance rulings (section 101A(1A))

From 1 April 2026 the Government can notify an existing authority, including a Tribunal, to hear appeals that would go to the National Appellate Authority for Advance Ruling until that body is constituted. This should end the gap in which conflicting advance rulings from different states could not be appealed.

5. Intermediary services: place of supply now follows the recipient (IGST section 13(8)(b))

Section 13(8)(b) of the IGST Act treated the place of supply of intermediary services as the supplier's location, so Indian agents and facilitators serving overseas clients could not treat their services as exports. With effect from 30 March 2026 this clause is omitted, and the general rule in section 13(2) applies: the place of supply is the recipient's location. Indian intermediaries with foreign clients should now check whether their services meet all conditions for export of services, which allows zero-rating under LUT and refund of input tax credit.

What did Budget 2026 not change?

What should Kerala businesses do now?

1. Discounts: review dealer and volume discount schemes and move them to section 34 credit notes, with the buyer's ITC reversal documented.
2. Inverted duty: keep RFD-01 refund claims current so they benefit from provisional refunds once notified.
3. Intermediaries: if you act as an agent for overseas principals, review export-of-services conditions, file an LUT and claim refunds of ITC where eligible.
4. Exporters of goods: track small-value refunds that were previously below the ₹1,000 limit.
5. Monthly discipline: reconcile purchases with GSTR-2B before filing GSTR-3B; that requirement is unchanged.

Frequently asked questions

Did Budget 2026 change GST rates?

No. GST rates are set by the GST Council. The current two-slab structure of 5% and 18% applies from 22 September 2025.

When do the Budget 2026 GST changes apply?

The intermediary place-of-supply change applies from 30 March 2026 and the interim appellate authority provision from 1 April 2026. The discount, provisional refund and export refund changes apply from dates to be notified by the Government.

Is the e-invoicing threshold lower in 2026?

The Finance Act, 2026 did not change it. E-invoicing applies to businesses with aggregate turnover above ₹5 crore, as it has since 1 August 2023.

Are intermediary services now treated as exports?

They can be. From 30 March 2026 the place of supply of intermediary services is the recipient's location, so services to a foreign recipient can qualify as export of services if all the other conditions in section 2(6) of the IGST Act are met.

Regi Tom Antony & Associates handles GST return filing, reconciliation, ITC reviews, refund applications including inverted duty and export refunds, and departmental notice responses for businesses across Kerala. Contact: letstalk@rtaandassociates.com | Kakkanad, Kochi.

Sources: Finance Act, 2026; ICAI CA Journal on the GST amendments. General information, not advice on your specific facts.