Key GST Amendments Proposed in Budget 2026 (Applicable from FY 2026-27)

By ANTM & Associates, Chartered Accountants

Budget 2026 has proposed a set of GST changes that directly affect how businesses handle post-sale discounts, export-linked commission income, refunds, and advance rulings. Several of these are meaningful cash-flow and compliance improvements. Below is a clear, point-by-point breakdown of what is changing and who it affects.

1. Post-Sale Discounts — Credit Notes Made Easier

until now, a GST credit note for a discount could be issued only if the discount was agreed at or before the date of sale. In practice, this blocked genuine trade discounts negotiated after the invoice was raised.

What changes: A GST credit note for a discount can now be issued even where the discount was not agreed before the sale — provided the GST is reversed by the recipient. The earlier requirement of a prior agreement has been removed.

Why it matters: This aligns the law with commercial reality, where volume and performance discounts are often finalised after supply. The key condition to watch is that the recipient must reverse the corresponding input tax credit.

2. Intermediary Services — A Major Relief for Agents Serving Foreign Clients

This is one Of the most significant proposals for anyone earning commission from overseas principals.

Earlier position: For intermediary services (broker/agent/any other person) where either the supplier or recipient was outside India, the place Of supply was treated as the location Of the supplier — i.e., India. The transaction was therefore taxable under CGST and SGST, even though the service Was effectively rendered to a foreign party.

Proposed position: The place of supply shifts to the location of the recipient — i.e., outside India. As a result, the transaction becomes zero-rated, with no GST.

Direct benefits: A saving Of 18% for commission agents working for foreign parties. Eligibility to claim refund Of inputs and input services used to make the outward supply Of intermediary services.

Who benefits the most: Commission agents in India representing foreign parties for admission to educational institutes abroad Those promoting a foreign principal's products (treated as intermediary service). Those facilitating the sale of products of overseas companies. Those providing pre-sale and marketing services for products of foreign clients. Those promoting foreign university courses in India (previously treated as an intermediary service, not export of service).

Our view: A welcome and long-overdue correction. Taxing these services made little sense when the service was effectively exported and payment was received in foreign exchange

3. 90% Provisional GST Refund Extended to Inverted Duty Structure

A 90% provisional refund on inputs will now be available under the inverted duty structure as well. Earlier, this provisional route was available only for zero-rated goods.

Why it matters: This is a genuine cash-flow improvement for businesses stuck with accumulated credit due to a higher tax rate on inputs than on outputs.

4. No Threshold Limit for Refund Applications on Export of Goods (with Payment of GST)

The threshold limit for making a GST refund application in the case Of export Of goods on payment Of GST has been removed. Earlier, a minimum Of Rs. 1 000 per tax head applied

Why it matters: Small-value exporters can now claim legitimate refunds that were previously locked out by the minimum threshold.

5. Designated Authority for Conflicting Advance Rulings — New Section IOI(IA)

A new Section IOI(IA) is proposed to empower the government to declare an existing authority — including a Tribunal — as the designated authority to hear appeals against contradicting Advance Rulings issued by the AAR Of two or more states.

This is an interim measure that will operate until the National Appellate Authority for Advance Rulings is formed, giving taxpayers a route to resolve conflicting rulings in the meantime.

Summary at a Glance

Disclaimer: The above reflects amendments proposed through Budget 2026 and is intended for general information. Provisions may change before enactment. For advice specific to your business, please consult us directly.