The amendments introduce significant GST reforms aimed at easing compliance, improving liquidity, and aligning tax treatment with commercial realities. Post-sale discounts are now deductible from the value of supply even if determined after the supply, removing the earlier requirement of a prior agreement and invoice-level linkage. Correspondingly, suppliers are expressly permitted to issue credit notes for such post-supply discounts, enabling lawful reduction of GST liability with proportionate reversal of input tax credit by recipients. Refund mechanisms are strengthened by allowing up to 90% provisional refunds for inverted duty structure claims on a risk-based basis, reducing working capital blockage. The removal of the ₹1,000 threshold for export refunds supports small exporters using courier or postal channels. Omission of the special place-of-supply rule for intermediary services shifts taxation to the recipient’s location, allowing qualifying cross-border intermediary services to be treated as exports. Additionally, a temporary appellate mechanism is introduced to avoid delays until a national appellate authority is constituted.
1. GST treatment in case of post-sale discount [Section 15(3) of GST Act, 2017]
Earlier post-sale discounts were deductible from the value of supply only if the discount was established through an agreement entered before or at the time of supply and the discount was specifically linked to relevant tax invoices.
The requirement of a pre agreement for post-sale discounts and invoice level linkage has been removed.
Post-sale discounts determined after the supply are now permissible deductions from the value of supply. This includes performance-based discount, turnover-based discount or market driven discount.
2. Credit Notes for post-sale discounts [Section 34 of GST Act, 2017]
Previously, Section 34 allowed suppliers to issue credit notes only when goods or services were found to be deficient.
With the amendment, section now explicitly allows suppliers to issue credit notes for post-supply discounts referred to in Section 15(3) of GST Act, 2017.
This change aligns the credit note provisions with the updated rules for post-sale discounts, ensuring that suppliers can reduce their GST liability appropriately and recipients can reverse the corresponding input tax credit.
3. Provisional Refunds for Inverted Duty Structure on Risk Basis [Section 54(6) of GST Act,2017]
The GST framework now provides that up to 90% of the refund amount claimed on account of inverted duty structure may be sanctioned on a provisional basis, subject to prescribed conditions and safeguards.
This is similar refund process for inverted duty structure like already established refund mechanism for exports and supplies to SEZs.
The primary objective of introducing provisional refunds is to: 1) Reduce working capital blockage for taxpayers 2)Ensure timely liquidity 3Minimise delays caused by lengthy verification and scrutiny of refund claims
4. Refunds for Low-Value Export Consignments [Section 54(14) of GST Act,2017]
The threshold limit of Rs. 1,000 for claiming GST refunds on exports made with payment of tax has been removed to support small exporters.
This change is beneficial for exporters using courier and postal modes, where consignments are often of low value. The reform ensures that merely due to transaction size, small businesses and MSMEs are not denied legitimate refunds.
5. Place of Supply for Intermediary Services [Section 13(8)(b) of GST Act, 2017- Omitted]
Under the earlier provisions of GST, the place of supply for intermediary services was governed by Section 13(8)(b) of the IGST Act, 2017, which provided that the place of supply shall be the location of the supplier of services.
As a result, intermediary services supplied by persons located in India were treated as taxable in India even when the recipient of services was located outside India and consideration was received in foreign exchange. Consequently, such services failed to qualify as export of services, leading to denial of zero-rated benefits and refund of taxes.
Due to omitted section, the place of supply for intermediary services is now governed by the default rule under Section 13(2) of the IGST Act, which states that the place of supply of services is the location of the recipient of services.
Now, intermediary services provided by Indian service providers to recipients located outside India, where consideration is received in foreign exchange and other export conditions are met, qualify as exports of services.
Accordingly, such supplies are treated as zero‑rated supplies, and Indian intermediaries can now avail of export benefits including GST exemption and refund of input tax credit, significantly enhancing competitiveness and aligning GST treatment with international trade principles
6. Mechanism for Appellate Authority [Section 101A of GST Act, 2017]
The Government, on the recommendations of the GST Council, can empower any existing authority or tribunal to hear appeals under Section 101B until the National Appellate Authority is formally constituted.
Under this arrangement, the procedural rules of Section 101A (2) to (13) shall not apply and any reference to the NAA in the law will be treated as a reference to the authority empowered by the Government.
This provides a practical and flexible solution to prevent delays in the appellate process.
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