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The GST Council may consider widening input tax credit (ITC) for several infrastructure, construction, hospitality and wellness costs, according to a Business Standard report published on 5 October 2026. The reported changes are proposals attributed to unnamed people familiar with discussions—not confirmed Council recommendations, changes to law or relief that businesses can claim. The Council’s publicly listed material checked for this update did not show an October 2026 outcome, so the decision remains unconfirmed.
What ITC relief is reportedly under consideration?
ITC lets an eligible business offset GST paid on its purchases against GST it owes on its sales. When credit is blocked or unavailable, tax on business inputs can become a cost; when goods or services pass through several businesses, that cost may contribute to tax cascading. The proposals described by Business Standard would address different points in that chain, and the report does not provide draft clauses or complete eligibility rules.
| Area | What the report says may change | Who or what could be affected |
|---|---|---|
| Fixed pipelines and telecom towers | ITC may be allowed for fixed pipelines laid outside factory premises and for telecom towers. | Business-use infrastructure in refining, petrochemicals, fertilisers, gas distribution and water infrastructure, among other projects named in the report. |
| Government-owned companies’ projects | Contracted prices may be accepted when government-owned companies execute projects with one another, rather than substituting a notional value. | Public housing, development and infrastructure contracts. |
| Contractors and developers | Blocked credit may be released more broadly, particularly for vehicles and insurance. | Contractors and developers with those costs; the report does not specify vehicle classes, insurance types or conditions. |
| Hospitality, tourism, restaurants and wellness | ITC may be extended to services bought and resold in the same line of business, and to certain services procured for hotel or resort guests. | Intermediaries, platforms, hotels, resorts, restaurants and wellness businesses. |
| Helicopter travel | Seat-sharing helicopter travel to or from a helipad may be exempt on the same footing as travel to or from an airport. | Passengers using the described seat-sharing service; the report gives no proposed conditions or effective date. |
How could pipeline and tower credit affect infrastructure projects?
The report says fixed pipelines outside factory premises have been treated as immovable property for which ITC is unavailable, even when they carry materials used in a business. The possible change would allow credit for those business-use pipelines. It also places telecom towers in the same broad discussion. The report names refining, petrochemicals, fertilisers, gas distribution and water infrastructure as sectors that could be affected, and says experts cited indirectly expect relief to reduce tax costs on large industrial and infrastructure projects.
This is a reported policy reconsideration, not confirmation that credit is available now. The historical record of the GST Council’s 7th/8th meeting material says: “After further discussion, it was agreed not to extend the benefit of ITC for pipelines and telecom towers.” That record explains the background to the reported proposal, but it does not by itself establish the current statutory position or the outcome of the 2026 discussion.
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What valuation change could affect government-company contracts?
According to the report, government-owned companies executing projects with one another may be treated as related parties, allowing a notional value to replace their agreed contract price for GST purposes. The Council could reportedly let the contracted price stand instead. The report says this could add certainty to public housing, development and infrastructure contracts, but it supplies neither draft wording nor a worked example. It therefore does not establish which contracts would qualify or how any valuation rule would operate in practice.
Which hospitality and wellness services are mentioned?
The report describes possible ITC for services purchased and resold in the same line of business—for example, hotel rooms, catering or restaurant services resold by intermediaries or platforms. It also names outdoor catering, beauty treatment, health services, and cosmetic and plastic surgery as possible areas for similar credit flow. A hotel or resort that procures services for guests, such as restaurant, spa or gym services, could reportedly receive credit on those purchases.
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In describing the potential for tax to be borne at multiple stages, the report refers to hotel rooms priced up to ₹7,500 a night and to 5% tax without credit for relevant hotel-room, catering and restaurant services. Those figures are part of the report’s proposal context; they are not independently verified here as current thresholds or a general statement of the applicable rate and scope. The report does not set out the precise service categories, eligibility tests or proposed credit conditions.
There is relevant prior Council policy, but it is not the reported 2026 decision. The official recommendations from the 56th Council meeting say a stand-alone restaurant cannot declare itself a “specified premises” and consequently cannot opt to pay GST at 18% with ITC. Those recommendations state that service-rate changes from that meeting were to take effect on 22 September 2025. This historical context does not confirm any later extension of credit.
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The report says a wider release of blocked credit, particularly on vehicles and insurance, could benefit contractors and developers because those are recurring project costs. It does not identify the vehicle categories, kinds of insurance, qualifying business uses or any proposed exclusions. Businesses should not infer from the report that credit on a particular vehicle or policy is now claimable.
What does the helicopter proposal mean?
Separately from the ITC proposals, the report says helicopter travel could be exempt when a passenger uses a seat-sharing service to or from a helipad, on the same footing as travel to or from an airport. It is a reported proposal, with no stated effective date or detailed conditions; it should not be treated as an exemption already in force.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When would a proposal become usable relief?
A report that an issue may be considered does not change a business’s GST treatment. The practical status depends on an official Council recommendation and the relevant legal or administrative action, such as an applicable notification, including its effective date and conditions. The Council’s publicly visible “What’s New” listing includes 56th-meeting material but did not display an October 2026 outcome in the material checked for this update. That limited check does not prove that no outcome exists elsewhere.
For businesses assessing a possible impact, the decisive details will be the asset or service covered, whether it is used in the business or resold, the applicable eligibility and valuation rules, whether credit offsets tax otherwise due, and the date any change takes effect. Until an official rule confirms those points, the reported measures remain uncertain and should not be built into tax claims or project pricing as settled relief.
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