In force from 1 November 2026: Notification No. 03/2026-Central Tax dated 26 October 2026 brings Sections 153, 154 and 155 of the Finance Act, 2026 into force from 1 November 2026. They amend Sections 15, 34 and 54 of the CGST Act and make four practical changes for businesses: post-sale discounts, credit notes, provisional refunds for inverted duty cases, and small export refunds.
🗣️ Saral bhasha mein samjhein
- Bikri ke baad diya gaya discount (target, year-end scheme) ab GST value se kam ho sakta hai. Pehle se agreement ya invoice-wise link ki zaroorat nahi.
- Shart: supplier GST credit note jaari kare aur buyer utna ITC reverse kare.
- Inverted duty refund mein ab 90% refund provisional taur par jaldi milega.
- Goods export par IGST refund ab ₹1,000 se kam ho tab bhi milega.
- Ye badlav 1 Nov 2026 se aage ke liye hain, purane periods par lagu nahi.
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1. Post-Sale Discounts: Section 15(3)(b)
Earlier, a discount given after supply reduced the taxable value only if it was (i) agreed at or before the time of supply, (ii) specifically linked to the relevant invoices, and (iii) the recipient reversed the ITC. Most target discounts and year-end rebates failed the first two tests, so suppliers issued commercial credit notes and the tax stayed paid on the full value.
From 1 November 2026, the first two conditions are removed. A post-supply discount is excluded from value if:
- the supplier issues a credit note under Section 34; and
- the recipient reverses the matching ITC.
2. Credit Notes for Such Discounts: Section 34(1)
Section 34(1) now expressly covers a discount referred to in Section 15(3)(b). The time limit in Section 34(2) is unchanged: the credit note must be declared by 30 November following the end of the financial year, or the date of filing the annual return, whichever is earlier. A commercial credit note without GST is still possible, but it will not reduce the supplier's output tax.
3. 90% Provisional Refund for Inverted Duty: Section 54(6)
Provisional refund of 90% was earlier available by law only for zero-rated supplies. From 1 November 2026, Section 54(6) also covers inverted duty structure refunds under Section 54(3). The balance is paid after final verification. The refund formula and exclusions in Rule 89 (such as input services and capital goods) are not changed, and risk-based checks continue.
4. Export Refunds Below ₹1,000: Section 54(14)
The ₹1,000 minimum refund limit no longer applies to refund of tax paid on goods exported out of India. This mainly helps small exporters shipping by courier or post. The limit continues for all other refunds, such as excess cash ledger balance or inverted duty refunds.
Action Points for Businesses
- Suppliers: issue GST credit notes for dealer discounts from 1 November 2026 and keep the scheme circular on file, since officers will still ask why the discount was given.
- Dealers: accept the credit notes and reverse ITC promptly. Non-reversal can put the supplier's tax reduction in dispute.
- Manufacturers with inverted duty: file RFD-01 with clean reconciliations to benefit from the 90% provisional release.
- The amendments are prospective. Earlier discounts and refund claims are governed by the old law.
Stuck on a refund or a credit note dispute? See our GST notices and litigation service or contact us.