Budget likely to see five key amendments in GST Laws to ease compliances, reduce litigation
The Finance Bill is likely to prescribe at least five changes in Goods and Services Tax laws to further facilitate ease of doing business. These amendments are based on GST Council’s recommendations.
A key amendment is related to post-sale discount. The Council had recommended amendment of section 15 and section 34 of CGST Act, 2017. It aims to omit the requirement of establishing the discount in terms of an agreement entered into before or at the time of such supply and specifically linking of the same with relevant invoices. This change addresses practical challenges faced by taxpayers, particularly those operating under distributor–retailer models, due to the mandatory pre-existing agreement requirement for granting such discounts.
The second key amendment in CGST Act is related to the place of supply provisions for intermediary services in IGST Act. In its meeting last September, the Council had recommended omission of clause (b) of section 13(8) of IGST Act 2017. Accordingly, after the said law amendment, the place of supply for “intermediary services” will be determined as per the default provision under section 13(2) of the IGST Act, 2017 i.e. the location of the recipient of such services. This will help Indian exporters of such services to claim export benefits.
The proposal seeks to resolve significant pending litigation (approximately ₹3,300 crore) and ensure a level playing field for Indian service exporters. While beneficial for exporters, taxpayers availing intermediary services from abroad who were earlier not paying GST would now be liable under RCM (Reverse Charge Mechanism).
The third amendment in the law is to provide for GST refunds in respect of low-value export consignments. The Council recommended amendment to section 54(14) of the CGST Act, 2017 so as to remove the threshold limit (₹1,000) for refunds arising out of exports made with payment of tax. This will particularly help small exporters making exports through courier, postal mode etc.
The fourth amendment is related to risk-based provisional sanction of refunds arising out of inverted duty structure (IDS). The Council recommended amendment in law (section 54(6) of the CGST Act, 2017) to provide for sanction of 90 per cent of refund claimed on provisional basis, in cases arising out of IDS, on similar lines as is presently available for refund in respect of zero-rated supply.
Last September it was decided by the Central Government that, pending requisite amendments in CGST Act, 2017, instructions shall be issued by the Central Board of Indirect Taxes and Customs (CBIC) to provide such refund. The scheme has been made operational with effect from November 1, so amendment will be post-facto.
The fifth amendment in CGST Act and Rules aims to extend inverted duty structure refunds to include “input services” and “capital goods”. Currently, IDS refunds are restricted in respect of input services and capital goods. Consequently, taxpayers whose products now attract GST at 5 per cent pursuant to rate rationalisation are facing accumulation of ITC due to substantial procurement of capital goods and input services.
“The upcoming Budget is expected to focus on easing compliance and reducing litigation under GST and Customs. Industry is hopeful for an amnesty scheme under Customs to settle long-pending disputes, along with key amendments in GST laws, such as rationalising place of supply rules for intermediary services, simplifying refund processes, and relaxing restrictions on claiming input GST credit. These measures can significantly improve cash flows and create a more business-friendly environment,” said Harpreet Singh, Partner- Indirect Tax at Deloitte.
Published on January 18, 2026
