Summary: The Ministry of Finance (Department of Revenue), through the Central Board of Indirect Taxes and Customs (CBIC), has issued Notification No. 03/2026–Central Tax dated 26 October 2026, appointing 1 November 2026 as the commencement date for Sections 153 to 155 of the Finance Act, 2026. The notification exercises the powers conferred under Section 1(2)(b) of the Finance Act, 2026. These provisions amend Sections 15, 34 and 54 of the Central Goods and Services Tax Act, 2017, concerning post-supply discounts, issuance of credit notes and GST refunds. Section 153 substitutes Section 15(3)(b), providing that a discount granted after supply may be excluded from taxable value where the supplier issues a credit note and the recipient reverses the input tax credit attributable to the discount in accordance with Section 34. Section 154 correspondingly amends Section 34(1) to expressly recognise credit notes issued for such discounts. Section 155 amends Section 54(6) to extend its provisional refund provisions to eligible unutilised input tax credit under the inverted duty structure category specified in Section 54(3). It also amends Section 54(14) to exclude refund claims relating to exports of goods with payment of tax from the restriction specified in that subsection. The notification specifies a common commencement date for these three legislative amendments and does not itself prescribe separate transitional arrangements or procedural forms. The amendments become operative from 1 November 2026.
Important implications
1. Post-supply discounts: Suppliers may be able to reduce taxable value for qualifying post-supply discounts without satisfying the earlier pre-agreement and invoice-linkage conditions, provided the statutory credit-note and ITC-reversal requirements are met.
2. Inverted duty refunds: Eligible taxpayers claiming refunds of accumulated ITC under Section 54(3) may benefit from the expanded provisional refund mechanism, subject to applicable rules and procedures.
3. Export refunds: The amendment to Section 54(14) changes the treatment of the minimum refund threshold for exports of goods with payment of tax. The precise impact should be read with the amended statutory wording and applicable refund rules.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS)
Notification No. 03/2026–Central Tax Dated: 26th October, 2026
S.O. 5791(E).— In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2026 (4 of 2026), the Central Government hereby appoints the 1st day of November, 2026 as the date on which the provisions of sections 153 to 155 of the said Act shall come into force.
[F. No. CBIC-20001/1/2026-GST]
KRITI PANDEY, Under Secy.
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Extract of sections 153 to 155 of Finance Act, 2026
Central Goods and Services Tax
153. Amendment of section 15.
In the Central Goods and Services Tax Act, 2017, (hereinafter referred to as the Central Goods and Services Tax Act), in section 15, in sub-section (3), for clause (b), the following clause shall be substituted, namely:––
“(b) after the supply has been effected, if for such discount, a credit note has been issued by the supplier and input tax credit as is attributable to such discount has been reversed by the recipient of the supply, in accordance with the provisions of section 34.”.
154. Amendment of section 34.
In section 34 of the Central Goods and Services Tax Act, in sub-section (1), after the words “both supplied are found to be deficient”, the words, brackets, letter and figures “or where a discount referred to in clause (b) of sub-section (3) of section 15 is given” shall be inserted.
155. Amendment of section 54.
In section 54 of the Central Goods and Services Tax Act,––
(a) in sub-section (6), after the words “supply of goods or services or both”, the words, brackets and figures “or of unutilised input tax credit allowed under clause (ii) of the first proviso to sub-section (3)” shall be inserted;
(b) in sub-section (14), after the words, brackets and figures “sub-section (5) or sub-section (6)”, the words “, other than cases where refund of tax is claimed on account of goods exported out of India with payment of tax,” shall be inserted.
