GST Changes from 1 November 2026: 3 Important Updates for Businesses

From 1 November 2026, important amendments to India's GST law will come into effect. These changes relate to post-sale discounts, provisional refunds of eligible input tax credit, and small-value export refunds.

Here is what businesses should know.

1. Post-Sale Discounts: More Flexibility

Businesses often offer discounts to dealers or customers after a sale, such as annual turnover incentives, volume rebates or target-based discounts.

From 1 November 2026, the statutory requirement for a prior agreement and specific invoice-linking under Section 15(3)(b) is being removed.

However, this does not mean every discount automatically reduces GST. Applicable conditions must still be satisfied, including relevant GST credit note requirements and reversal of attributable input tax credit by the recipient.

What businesses should do: Review discount policies, customer agreements and credit note procedures before implementing the change.

2. Provisional Refunds: Relief for Eligible Businesses

An inverted duty structure arises when the GST rate on inputs is higher than the rate on outward supplies, potentially resulting in accumulated input tax credit (ITC).

The amendment extends the statutory provisional refund mechanism to eligible inverted duty structure refund claims.

Under the applicable framework, 90% of an eligible refund claim may be sanctioned provisionally, subject to prescribed conditions, exclusions and verification. This is not an automatic entitlement for every taxpayer or every refund claim.

What businesses should do: Review accumulated ITC, refund calculations and supporting documents before filing a claim.

3. Small-Value Export Refunds: ₹1,000 Threshold Removed in Specified Cases

The minimum ₹1,000 refund threshold is being removed for eligible refund claims relating to goods exported out of India with payment of tax.

This may benefit exporters with small-value claims. However, the relaxation is limited to the specified category and does not remove the minimum threshold for every type of GST refund.

What exporters should do: Review small-value export refund claims and confirm eligibility under the applicable provisions.

What Should Businesses Do Now?

Before changing their GST processes, businesses should:

1. Review post-sale discount arrangements and GST credit note procedures.
2. Ensure that applicable ITC reversals are properly documented.
3. Reconcile accumulated ITC and check refund eligibility.
4. Review export refund claims involving small amounts.
5. Update accounting and GST compliance procedures wherever necessary.

The Bottom Line

The GST amendments effective from 1 November 2026 aim to simplify the treatment of post-sale discounts, improve access to eligible provisional refunds and remove a minimum refund threshold in a specified export category.

The key is to understand the conditions before changing invoices, credit notes or refund procedures.

A change in the law is useful only when it is implemented correctly.

Disclaimer: This article provides general information. Actual eligibility and compliance should be determined with reference to the applicable statutory provisions, rules and notifications.