GST Changes From 1 November 2026: Post-Sale Discounts, Faster Refunds, E-Invoicing and TDS on Scrap

What the new CBIC notifications mean for your business, and what to do before each deadline

By CA Nitish Chhabra and CA Vikas Chhabra, Chartered Accountants, ProIndiaClub · Published 30 October 2026 · Last updated 30 October 2026

Quick answer: CBIC Notifications 03/2026 to 07/2026-Central Tax change GST from 1 November 2026: post-sale discounts no longer need a prior agreement, inverted-duty refunds get a 90% provisional payout, and four more scrap goods attract TDS. E-invoicing widens on 1 January 2027, and capital-goods ITC and system-based cancellation follow on 1 April 2027.

The Central Board of Indirect Taxes and Customs (CBIC) has issued Notification Nos. 03/2026 to 07/2026-Central Tax. Together they change GST valuation, refunds, e-invoicing, registration and tax deduction at source (TDS). Some measures ease working capital and procedures. Others require businesses to update accounting systems and compliance processes.

Who should read this: exporters, manufacturers with an inverted duty structure, taxpayers covered by e-invoicing, e-commerce sellers, and anyone who buys or sells scrap.

GST changes timeline: dates to track

1. Post-sale discounts under GST and statutory refund relief

Notification No. 03/2026-Central Tax dated 26 October 2026 · Effective 1 November 2026

This notification brings sections 153 to 155 of the Finance Act, 2026 into force. They amend sections 15, 34 and 54 of the CGST Act, 2017.

Post-sale discounts: credit note and ITC reversal rules

The amendment removes two conditions. A post-sale discount (also called a post-supply discount) no longer needs to be established under an agreement made before or at the time of supply, and it no longer needs to be linked to specific invoices. A discount decided after the sale can now reduce the taxable value, provided the supplier issues a GST credit note and the recipient reverses the related input tax credit (ITC) under section 34.

The relaxation does not remove the other conditions or time limits for reducing output tax liability. Keep three records together for every such discount: the evidence of the discount, the credit note and the ITC reversal.

90% provisional refund for inverted duty structure

Section 54(6) covered provisional refunds only for zero-rated supplies. It now extends to eligible claims for unutilised ITC arising from an inverted duty structure. Eligible applicants can receive 90% provisionally, subject to the prescribed conditions, without waiting for the entire claim to be finally determined.

Illustration (simplified): on an eligible claim of ₹10,00,000, the provisional payout would be ₹9,00,000, with the balance released after final determination.

Refunds below ₹1,000 for goods exported with payment of tax

The section 54(14) bar on refunds below ₹1,000 will no longer apply to claims for goods exported out of India with payment of tax. For all other claims, the minimum-refund restriction continues.

2. E-invoicing for reverse charge and import of services

Notification No. 04/2026-Central Tax dated 26 October 2026 · Effective 1 January 2027

The amendment to Notification No. 13/2020-Central Tax widens e-invoicing beyond supplies to registered persons and exports. It now expressly includes supplies received from unregistered persons where the recipient pays GST under reverse charge, and imports of services.

Businesses already within the e-invoicing mandate must bring the relevant self-invoices into the e-invoicing process, including self-invoices for imported services on which they discharge GST under reverse charge.

What does not change: the turnover threshold and existing exclusions remain, and reverse charge does not apply to every purchase from an unregistered supplier. Identify affected inward supplies, review self-invoice numbering and reporting, and update systems for the invoice schema before 1 January 2027.

3. CGST Rules amendments: refunds, registration and compliance

Notification No. 05/2026-Central Tax dated 26 October 2026 · CGST (Amendment) Rules, 2026

3.1 From 1 November 2026: broader and faster refunds, simpler registration

• Input-service credit in inverted-duty refunds. The revised formula includes eligible input-service ITC availed on or after 1 November 2026. Identify qualifying credit by its date of availment.
• Shorter initial scrutiny. Acknowledgement or deficiency communication falls from 15 days to 10 days. If neither happens, the application is deemed acknowledged.
• System-generated provisional refund orders. On system risk evaluation, Form GST RFD-04 orders are generated within three working days of acknowledgement, for eligible claims meeting the refund conditions.
• Electronic cash-ledger refunds. For excess cash-ledger balances, the portal generates the sanction order, adjusts outstanding demands and identifies the refundable balance.
• Export-refund valuation. The Rule 89(4) cap of 1.5 times the value of like goods supplied domestically is removed.
• Cancellation at the taxpayer's request. Eligible applicants can apply electronically after filing required returns and paying dues. Reconcile returns, liabilities and stock obligations first.
• Registration through an e-commerce warehouse (new Rule 14B). Eligible suppliers can register in another State or Union territory by declaring an e-commerce operator's warehouse as principal place of business, subject to the operator's consent, the output-tax-liability limit and authentication.
• Simpler amendments (revised Rule 19). Specified particulars can be amended electronically after online validation. Principal-place-of-business changes generally follow the examination process, except the facility starting 1 December 2026.
• ISD, composition and annual return. Documentation for Input Service Distributors (Forms GSTR-6 and GSTR-6A) and composition reporting are revised; specified annual-return relaxations continue. Annual-return compliance otherwise remains.
• Non-resident taxable persons. Under Rule 63, the monthly return due-date reference changes from the 20th to the 13th. Read with section 39(5).

3.2 From 1 December 2026: revised forms and procedures

Revised cancellation and refund forms and their document requirements come into operation. The Rule 19(3) facility to amend the principal place of business also starts, for eligible persons registered under Rule 14A, subject to online validation. Use the revised forms for applications around this date.

3.3 From 1 January 2027: invoice-level detail

• GSTR-7A (TDS certificates) will carry invoice or document-level particulars, so reconcile deductions with underlying supplies.
• INV-01 Version 1.2 adds supply codes RCMDOM (domestic supplies from unregistered persons under reverse charge) and RCMIMP (imports of services). Implement them with the expanded e-invoicing coverage in Section 2.

3.4 From 1 April 2027: capital-goods credit and compliance safeguards

• Capital-goods ITC in refund calculations. ITC on capital goods availed on or after 1 April 2027 enters the refund calculations through attribution over 60 months. Only the portion for the relevant period, after reversals, counts.
• System-based suspension and cancellation. Specified return defaults, or failure to furnish bank details under Rule 10A, can trigger suspension. If not corrected within 30 days, registration may be cancelled electronically.
• Restoration (new Rule 23A). Apply within 180 days of cancellation under Rule 22(5), after the default is cured and pending returns, tax, interest, penalty and late fee are dealt with. This window applies only to this route.
• Restricting use of ITC (amended Rule 86A). Form GST DRC-26 records the restriction order, DRC-27 lets the taxpayer object, and DRC-28 records the decision after a hearing.
• Clearer demand references. Revised Forms GST DRC-01, DRC-01A and DRC-07 carry more detailed proceeding references.

4. Registration exemption narrowed for scrap and waste goods

Notification No. 06/2026-Central Tax dated 27 October 2026 · Effective 1 November 2026

The exemption under Notification No. 5/2017-Central Tax for persons making only reverse-charge supplies is no longer available to suppliers of the goods below. Metal scrap was already excluded; four categories are new.

A supplier cannot rely only on the buyer's reverse-charge payment to claim this exemption. Registration liability must still be determined under the CGST Act, including thresholds and compulsory-registration provisions.

5. GST TDS on scrap purchases

Notification No. 07/2026-Central Tax dated 27 October 2026 · Effective 1 November 2026

The amendment to Notification No. 50/2018-Central Tax covers registered persons receiving the four new goods above from other registered persons. Metal scrap remains covered. These buyers must deduct GST TDS under section 51 wherever its conditions are met.

TDS remains subject to the contract-value threshold and other conditions and exclusions. Before deducting, review the supplier's registration status, tariff classification, contract terms and deduction records. Deduction is not automatic on every purchase.

6. GST action checklist for businesses

Frequently asked questions

Conclusion

These amendments give businesses more commercial flexibility and wider refund relief, in exchange for more automated compliance. The earliest deadline is 1 November 2026. Start with the post-sale discount process, refund claims and the scrap registration and TDS review, then plan system changes for 1 January and 1 April 2027.

Need help with implementation? Write to the ProIndiaClub team.

Sources: CBIC Notification Nos. 03/2026 to 07/2026-Central Tax (dated 26 and 27 October 2026) . This article is for general information and is not professional advice. Please consult a qualified professional before acting on it.