India will enforce new goods and services tax (GST) rules on post-supply discounts and provisional refunds from 1 November 2026, according to a notification issued on 26 October 2026.
India’s tax authority, the Central Board of Indirect Taxes and Customs (CBIC), has set 1 November 2026 as the date on which new amendments to the Central Goods and Services Tax Act, 2017 (CGST Act) will take effect. The date was announced in a notification issued on 26 October 2026 under Section 1(2)(b) of the Finance Act, 2026.
The changes, contained in Sections 153 to 155 of the Act, were first announced in the 2026-2027 budget.
Post-supply discounts
A post-supply discount can now be excluded from the value of supply if two conditions are met. The supplier must issue a credit note, and the recipient must reverse the corresponding input tax credit in accordance with Section 34. These changes are made through the amended Section 15(3)(b). Section 34(1) has also been amended to expressly permit a credit note where such a discount is granted after the supply has been effected.
Provisional refunds
Section 54(6) has been amended to extend the provisional refund framework to refunds of unutilised input tax credit allowed under clause (ii) of the first provision to Section 54(3). Section 54(14) has been amended to carve out an exception for refund claims relating to goods exported out of India with payment of tax.
Impact
The amendments give a clearer statutory framework for the GST treatment of post-supply discounts by linking valuation benefits to credit notes and the recipient’s reversal of input tax credit.
They also widen the scope of provisional refunds, which will help businesses facing inverted duty structures. With the new provisions due to take effect in less than a week, taxpayers in India will need to review their discount and credit note practices ahead of 1 November 2026.
