57th GST Council Meeting: What Has Changed and What Industry Wants Next

Summary: The 57th GST Council meeting is scheduled for 7 October 2026 in New Delhi, according to the revised schedule circulated by the Council Secretariat. The final agenda had not been specified in that communication. After the rate changes associated with GST 2.0, attention has turned to the operation of registration, returns, input tax credit (ITC), refunds and dispute procedures. Some process changes are already in force: an eligible low risk applicant can use the simplified three working day registration route introduced from 1 November 2025; GSTR-1A allows certain corrections to current-period outward-supply details before GSTR-3B is filed; and risk based provisional refunds have been introduced for eligible zero-rated claims, with an administrative instruction addressing inverted duty claims. These measures leave questions about identity safeguards, easier correction of mismatches, the treatment of genuine buyers when suppliers default, and accumulated ITC on input services. Ranjeet Mahtani, Partner at Dhruva Advisors, expects the Council to address these concerns and to consider proportionate penalties and more consistent show cause notices. His views are industry proposals, not decisions of the forthcoming meeting. Businesses should distinguish a Council recommendation from an operative amendment or notification.

Why Process Reforms Are Back in Focus

The 56th GST Council met on 3 September 2025 and recommended rate rationalisation alongside measures to facilitate trade. The next meeting is scheduled for 7 October 2026, following a revision of the earlier September schedule. The revised meeting communication said that agenda items would be conveyed separately. There is therefore no basis to present a suggested reform as an approved item or an outcome of the 57th Council. For businesses, the practical test of simplification is the time and cost of obtaining registration, reconciling invoices, using legitimate ITC and obtaining refunds. A faster registration certificate has limited value if routine mismatches lead to repeated notices. Similarly, a provisional refund helps liquidity only if the claim can be processed promptly and its underlying credit falls within the refund formula. These operational issues form the backdrop to the proposals discussed below.

Registration: Three Working Days and the Biometric Question

The 56th Council’s recommendations provided for an optional automated registration route within three working days for eligible low risk applicants and those whose self-assessed output tax on supplies to registered persons would not exceed ₹2.5 lakh a month. A subsequent government statement says the scheme was introduced from 1 November 2025. It is thus an existing measure, rather than a fresh proposal for October 2026. The remaining question is how to combine speed with reliable identity checks. In Neha v. Union of India, heard with Vikram Kaushal v. Director General of Income Tax (Investigation), the Delhi High Court recorded allegations of registrations obtained using other people’s PAN and Aadhaar details. Its interim order dated 8 September 2026 directed authorities across India, for the time being, not to allow GST registration without biometric based Aadhaar authentication. The Court permitted the authorities to place practical implementation difficulties before it. The direction is an interim judicial order; it should not be described as a recommendation already made by the 57th Council. Practical issue: A uniform verification process would need sufficient appointment capacity, clear timelines and a way to address genuine applicants whose authentication fails. Otherwise, a fraud control could frustrate the three working day registration objective. This is an operational question for policymakers, not an announced solution.

Returns: Build on GSTR-1A and Invoice Matching

The system already permits a limited same-period correction through Form GSTR-1A. The GST portal’s guidance says it can be used to add an omitted record or amend a record in that period’s filed GSTR-1 before filing GSTR-3B. It is optional, available only within its specified filing window, and cannot amend an earlier period’s GSTR-1 through the current period’s GSTR-1A. Accordingly, a call for “mid-month amendments” needs to identify the gap it would fill. Possibilities include earlier warnings about invoice mismatches, improved flows from e-invoicing to outward-supply returns, and clearer reconciliation between suppliers’ corrections and recipients’ credit data. Businesses would benefit from knowing which record controls the final return and when a correction becomes visible to the other party. None of these further features should be assumed to have been approved.

ITC: The Supplier Default Problem

One recurring dispute arises when the purchasing taxpayer says it received a genuine supply and paid the invoiced tax to its supplier, but the supplier did not comply with its own GST obligations. Section 16(2)(c) of the CGST Act links eligibility to tax charged on the supply being actually paid to the Government, subject to the statutory framework. In Bhandari Scrap Traders v. Union of India, the Supreme Court declined to invalidate that statutory condition. A proposal to protect compliant buyers must therefore specify the evidence of the transaction, the buyer’s due diligence, the treatment of fraud and the point at which credit can be retained or restored. A legislated safe harbour could make the outcome more predictable, but it has not been announced for the 57th meeting. In the meantime, purchasers should retain tax invoices, proof of receipt of goods or services, payment records, vendor correspondence and periodic reconciliations. A mismatch alert is a reason to investigate; it is not, by itself, proof that every underlying supply was fictitious.

Refunds: Faster Processing Versus the Amount Refundable

These are two different issues. Following the 56th Council’s recommendations, the Government reported that risk based 90% provisional refunds for eligible zero-rated claims were introduced from 1 October 2025. It also reported that CBIC issued Instruction No. 06/2025-GST dated 1 October 2025 to field formations concerning provisional refunds in inverted duty cases. These measures address timing and working capital; they do not automatically expand what forms part of an admissible refund claim. The separate policy demand concerns input services used by businesses whose input tax rate exceeds the rate on their outward supply. Section 54(3) of the CGST Act and Rule 89(5) of the CGST Rules govern the inverted duty refund, with the prescribed calculation focusing on credit on inputs. Including input-service credit would require an appropriate legal change; faster provisional sanction cannot achieve that result on its own. The Supreme Court considered the statutory distinction in Union of India v. VKC Footsteps India Pvt. Ltd. Businesses should assess their accumulated credit by source before estimating the cash benefit of any future reform.

Notices, Penalties and the Cost of Disputes

Businesses also seek notices that identify the relevant tax period, the transaction or mismatch, the legal provision invoked and the calculation of the proposed demand. A standard protocol could make replies more focused and reduce avoidable disputes. Penalty rationalisation for genuine, non fraudulent errors would require care to preserve the distinction between a mistake and deliberate evasion. At present, these are suggestions for the Council’s consideration; no new across-the-board penalty relaxation follows merely from the prospect of the meeting.

Ranjeet Mahtani on the Next Stage of GST Reform

Ranjeet Mahtani, Partner, Dhruva Advisors, said that after an interval of more than a year and the GST 2.0 changes, India Inc expects a more tax friendly ecosystem, particularly in registration, return filing and matching portal data with returns. In his assessment, the Council’s recommendations have helped stabilise monthly revenue at around ₹2 trillion while addressing legal ambiguities and rates. He believes deeper process reforms should now be the priority. Mahtani expects closer attention to a uniform biometric registration process in light of the Delhi High Court’s interim order. He also suggested more flexible corrections using e-invoicing data; a legislative safe harbour or relaxation of reversal requirements for honest buyers affected by supplier defaults; prompt, automated refund verification; and inclusion of input services in the inverted duty refund formula. He further urged more proportionate penalties for non fraud cases and consistent show cause notice protocols. In his view, these changes could reduce friction for MSMEs and prevent some disputes from arising.

What Taxpayers Should Watch After the Meeting

• Official outcome: Identify what the Council actually recommends on 7 October, and distinguish it from proposals circulated beforehand.
• Legal effect: Check the subsequent Act amendment, Rule change, notification, circular or portal advisory and its commencement date. A recommendation alone does not change a taxpayer’s obligations.
• Operational effect: Test any new registration or return functionality against actual filing timelines, invoice reconciliations and refund documentation.
• Cash flow: Separate an acceleration of an existing refund from a change in the amount legally refundable, especially for accumulated input-service credit.

Conclusion: The 57th meeting offers an opportunity to assess whether the process changes introduced after the 56th Council have worked in practice and whether further legal or technical changes are needed. Its agenda and decisions should be reported from the Council’s official release when available. Until then, registration, ITC, refund and penalty suggestions remain expectations, including those advanced by Mahtani.