NASSCOM welcomed proposed GST changes that could affect service exports, refunds and input tax credit, small e-commerce sellers, and compliance. The proposals came from the GST Council’s 57th meeting, announced on October 8, 2026. They are recommendations—not proof that the law has changed or that a particular business qualifies for relief.
What NASSCOM welcomed
An IANS report carried by The State Line says NASSCOM welcomed proposals concerning service exports, refunds, input tax credit (ITC), compliance, and enforcement. NASSCOM said: “We appreciate the constructive engagement of the Union and State Governments, the Ministry of Finance and CBIC with industry on these issues.” The report does not link to a direct NASSCOM statement, so the reaction is attributable to NASSCOM as reported by IANS. IANS report carried by The State Line
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The Ministry of Finance said the Council’s 57th meeting focused on process reforms involving registration, returns, refunds, and adjudication, along with clarifications and trade-facilitation measures. It also said FAQs would be issued. Ministry of Finance release on the 57th GST Council meeting
How the service-export proposals could affect IT and engineering firms
The Council recommended two changes to the IGST Act that could matter to Indian businesses supplying services to overseas customers.
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Services involving an overseas branch
The Council recommended removing the same-person establishment restriction from the definition of “export of services.” NASSCOM, as reported by IANS, welcomed the proposal as addressing a longstanding concern for IT and IT-enabled services businesses, engineering and research providers, global capability centres, and deep-tech firms serving foreign customers through overseas branches.
Research or testing on a foreign customer’s goods in India
The Council also recommended omitting clause (a) of section 13(3) of the IGST Act. That would allow the default place-of-supply rule in section 13(2)—generally, the recipient’s location—to apply in cases where a recipient makes goods physically available to the supplier. The Ministry says the change is intended to facilitate export-related GST benefits for Indian service providers serving foreign recipients. NASSCOM’s reported assessment highlights research, testing, certification, and engineering work performed in India on goods owned by overseas customers, such as prototypes or samples.
These proposals do not establish that every service in these categories will qualify as an export. Other export conditions still matter, and the final legal changes will determine the applicable treatment. The sources do not give an implementation date.
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Refunds and ITC: what the recommendations cover
The Council recommended changes to refund eligibility for accumulated ITC in specified situations. It also recommended removing section 17(5) restrictions for listed supplies. For businesses with eligible credits, these changes could reduce amounts tied up in business expenditure, but they do not make any individual refund or credit claim automatic.
| Area | What the Council recommended | Potentially affected businesses |
|---|---|---|
| Zero-rated supplies | Allow refunds of accumulated ITC on capital goods. | Businesses making zero-rated supplies with accumulated eligible credit. |
| Inverted duty structure | Allow refunds of accumulated ITC on input services and capital goods. | Businesses whose input tax rate structure results in accumulated credit. |
| Listed supplies under section 17(5) | Remove ITC restrictions for specified categories, including outdoor catering, health and life insurance, telecom towers, pipelines outside factory premises, free samples, and goods destroyed or written off after expiry as required by law. | Businesses incurring costs in the listed categories, subject to final rules and eligibility conditions. |
NASSCOM welcomed proposals on inverted-duty refunds for input services, plant-and-machinery refund eligibility, faster refunds, and ITC on employee health and life insurance, according to the IANS report. No quantified savings or guaranteed refund timing is established by the sources.
A proposed registration route for some small e-commerce sellers
The Council recommended adding rule 14B to create a simplified registration mechanism for certain small suppliers of goods selling through an e-commerce operator. It is aimed at sellers using an operator’s warehouse in a state or union territory where the seller has no physical presence; the proposal would allow the warehouse to be declared as the seller’s principal place of business there.
The recommendation includes a condition that intended monthly ITC passing must not exceed ₹2.5 lakh, with an exception for stock transfers between distinct persons. The Ministry’s release describes this as a threshold for the proposed route. It could help some sellers participate in online trade across state or union-territory boundaries without maintaining their own premises in every location, but the conditions and final legal text will determine who can use it.
Enforcement, e-way bills, and other compliance proposals
Arrest and prosecution
The Council recommended omitting section 69 of the CGST Act to withdraw GST arrest powers. It also recommended raising the prosecution threshold from ₹1 crore to ₹5 crore and changing specified offences and punishments. These are proposed legal changes; the Council announcement alone does not show that they are in force.
Interception of goods in transit
The recommendation would generally require specific intelligence and authorization by an officer at least at Joint Commissioner rank before interception, and would limit action in transit states. The release lists exceptions, including cases where an e-way bill or transport document is missing.
Returns, notices, and e-invoicing
The release also recommends notice-validation provisions and expanded e-invoicing in specified cases for businesses with annual turnover of ₹5 crore or more. It describes, in principle, an optional Annual Return Quarterly Payment (ARQP) scheme for certain B2C taxpayers with turnover up to ₹5 crore. A similar turnover ceiling appears in a recommendation concerning late fees for small taxpayers. These thresholds are policy parameters in the Ministry’s release, not estimates of economic impact; the specific conditions and implementation details need to be checked in the final rules.
What is confirmed—and what businesses should check
The Ministry of Finance’s October 8, 2026 release confirms that the Council made these recommendations. It does not establish an effective date for every proposal or show that all have been implemented. The sources reviewed for this report provide no independently measured figures for effects on exports, working capital, compliance costs, or seller participation.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Before changing an invoice, refund claim, registration, or compliance process, check the relevant enacted amendment, Gazette notification, rule, or circular, along with the government FAQs announced for these changes. A Council recommendation may require further legal steps before it affects a taxpayer’s obligations or entitlements.
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