The GST Council has recommended changing Section 17(5) of the Central Goods and Services Tax Act, 2017, to ease restrictions on input tax credit (ITC) for several named categories. The 57th Council meeting release, dated 8 October 2026, describes a recommendation—not an enacted change—and gives no effective date. Taxpayers should not treat the listed credits as claimable on the strength of this announcement alone.
What the GST Council recommended
The PIB release on the 57th GST Council meeting says: “The Council recommended amendment in section 17(5) of the CGST Act, 2017”. The stated aim is to rationalize blocked ITC, reduce cascading taxes and support a smoother flow of credit across the supply chain. The Council met on 8 October 2026 under the chairpersonship of the Union Finance and Corporate Affairs Minister. Read the PIB release on the 57th GST Council meeting.
The release introduces its examples with “inter-alia,” so the categories below are named examples, not a confirmed exhaustive list. It does not set out amended statutory wording or category-specific conditions.
Which blocked ITC categories may change?
Services
- Outdoor catering: Named in the Council release as a category for which ITC restrictions may be eased.
- Health and life insurance: Both are named; the release does not specify qualifying policies, recipients, or other conditions.
Infrastructure-related cases
- Telecommunication towers: The release names these as a category potentially affected by the proposed change.
- Pipelines outside factory premises: The named case is pipelines laid outside factory premises; the announcement does not describe the proposed boundaries or conditions.
Goods-related cases
- Free samples: The release names free samples among the categories in the recommendation.
- Goods destroyed or written off: It refers to goods destroyed or written off on expiry of shelf life as required by law.
These descriptions reflect the examples in the announcement; they do not establish that every expense, asset, sample, or loss in a named category will qualify for credit under the final law.
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Does the proposal change ITC on business cars?
The 57th Council release does not identify general business-car ITC relief. Earlier Council agenda material describes Section 17(5)(a) as restricting ITC on passenger motor vehicles with an approved seating capacity of up to 13 persons, including the driver, subject to exceptions for further supply, passenger transport, and driver training. That historical description is background, not evidence that the 2026 recommendation changes the vehicle rule. See the 54th GST Council meeting agenda material.
A separate 28th-meeting agenda also discussed proposed changes to Section 17(5), including motor-vehicle provisions. Earlier agenda proposals should not be confused with the recommendation announced in October 2026. See the 28th GST Council meeting agenda.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When could the ITC changes take effect?
The 57th-meeting release does not state an effective date or provide the final amendment text. It also does not establish whether the recommendation has since been enacted, how transitional cases would be handled, or what limits may apply to each category. The recommendation alone therefore does not establish that a taxpayer can claim the listed credits now.
Before changing an ITC claim, check the enacted amendment to the CGST Act and any applicable official implementation guidance, such as a Gazette notification or government circular. The final text and its effective date—not the Council recommendation by itself—will determine the applicable rules.
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What taxpayers should do now
- Continue to assess claims under the rules currently in force rather than treating the recommendation as effective law.
- Keep records supporting the nature and business purpose of expenses and goods in the named categories.
- Review the final statutory wording and any implementation guidance before revising returns or claiming credits.
- For vehicle claims, do not infer a change from the listed examples; check the applicable vehicle provisions and exceptions.
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