The 57th GST Council meeting, held in New Delhi on 8 October 2026, recommended easier GST registration and cancellation, a late fee waiver for small taxpayers who file within the due month, lower penalties and removal of the arrest provision. These are recommendations — each applies only after the government issues the circular, notification or law amendment that gives it effect.
When do the 57th GST Council recommendations take effect?
The Ministry of Finance press release says the recommendations "would be given effect" through the relevant circulars, notifications and amendments to the law, and that only those documents have legal force. In practice this means three different timelines:
- Circulars and rule changes (for example registration documents and rule 19 amendments) can be issued by CBIC fairly quickly.
- Changes to the CGST Act or IGST Act (for example removing section 69 or changing section 125) need an amendment passed by Parliament, usually through a Finance Bill.
- Return changes that reduce mismatches between GSTR-1, GSTR-3B and GSTR-2B may be brought into force from the return for April 2027, after a public consultation.
Until a change is notified, keep following the current rules and due dates.
What changes for GST registration and cancellation?
Registration and cancellation are where small businesses spend a lot of time with the department. The Council recommended:
| Area | Recommendation |
|---|---|
| New registration | A circular listing the documents needed, with FAQs, and drop-down boxes in Form GST REG-01 |
| Amendments | Rule 19 to be amended so most amendments are accepted automatically; change of principal place of business stays outside this (except for rule 14A taxpayers) |
| Cancellation, phase 1 | REG-16 applications accepted automatically once returns are filed and dues paid, where ITC passed on did not exceed ₹2.5 lakh in any month |
| Cancellation, phase 2 | Automatic acceptance extended to all REG-16 applications on the same conditions; final return (GSTR-10) details to be entered in REG-16 itself |
| Officer-led cancellation | Some grounds removed; a new rule 23A for system-based cancellation and revocation for non-filing of returns or missing bank details |
| E-commerce sellers | A new rule 14B to let small suppliers without a physical presence in a state register using the e-commerce operator's warehouse as their place of business |
If you are planning to close a business or register in a new state, it is worth watching for the CBIC notification before you apply. For a new registration today, see our GST registration service.
Is there any relief on late fees for GST returns?
Yes. The Council recommended waiving the late fee for a return filed under section 39(1) of the CGST Act — the monthly or quarterly GSTR-3B — for taxpayers whose turnover in the preceding financial year was up to ₹5 crore, provided the return is filed by the end of the month in which it was due. A return filed in a later month would still attract the normal late fee.
The Council also approved, in principle, a concept note for an optional Annual Return Quarterly Payment (ARQP) scheme. It is meant for taxpayers with turnover up to ₹5 crore who supply only to unregistered persons (B2C sellers such as many shops). The scheme is only at the concept stage and its details are not yet notified.
What changes for penalties, notices and arrest?
The Council recommended a softer approach to disputes, especially for genuine errors:
| Provision | Present position | Recommended change |
|---|---|---|
| Show cause notice (sections 73, 74, 74A) | No minimum amount | No notice where total tax (CGST + SGST + IGST + Cess) is below ₹10,000 |
| Maximum general penalty (section 125) | ₹25,000 | ₹10,000 |
| Minimum penalty in non-fraud cases | ₹10,000 | Removed |
| Penalty if tax and interest are paid after the order (non-fraud) | — | 5% penalty if paid within 30 days (section 73) or 60 days (section 74A) of the order |
| Arrest (section 69) | Power to arrest exists | Section to be omitted |
| Prosecution threshold | ₹1 crore | ₹5 crore |
Pending notices below the ₹10,000 threshold are to be decided as if the threshold already applied. The Council also recommended a circular with guidelines on issuing notices and orders, including the right to a personal hearing, and allowing objections and a hearing before an electronic credit ledger is blocked under rule 86A.
Will more input tax credit become available?
Several credits blocked under section 17(5) of the CGST Act are recommended to be opened up. These include outdoor catering, health and life insurance, telecommunication towers, pipelines laid outside factory premises, free samples, and goods destroyed or written off on expiry of their legally required shelf life. Limited ITC in the same line of business is also proposed for restaurants and outdoor catering, hotel accommodation within the ₹7,500 per unit per day tariff limit, and gyms and fitness services.
For exporters and businesses with an inverted duty structure, the Council recommended refunds of ITC on input services (for ITC availed on or after 1 November 2026) and on capital goods (spread over 60 months, for ITC availed on or after 1 April 2027). Refunds of excess balance in the electronic cash ledger are to be processed automatically, and 90% of zero-rated and inverted duty refunds are to be sanctioned provisionally by the system.
What changes for e-way bills and goods in transit?
Vehicles are to be intercepted only on specific intelligence and with authorisation from an officer of at least Joint Commissioner rank. Goods passing through a state (where neither the supplier nor the recipient is located there) are not to be intercepted, except where there is no e-way bill or no document showing origin and destination. Confiscation under section 130 is not to apply to goods or vehicles in transit. This should reduce detentions of trucks for minor errors.
What should a small business do now?
- Keep filing GSTR-1 and GSTR-3B on the current due dates — no relief applies until it is notified.
- Make sure your bank account details are updated on the GST portal, since missing bank details is one of the grounds for system-based cancellation.
- Review your purchase ledger for the credits listed above, but claim them only from the date the amendment takes effect.
- If you have a pending notice for a small amount, discuss with your adviser whether to wait for the threshold to be notified.
How Indian Salahkar can help
Indian Salahkar, a business advisory firm in Agra, works with GST practitioners, Chartered Accountants and Advocates to help businesses across India keep their GST filings and registration up to date. We track CBIC notifications as these recommendations are put into effect and apply them to your returns. See our GST returns and compliance service to get started.
Frequently asked questions
When was the 57th GST Council meeting held?
It was held on 8 October 2026 in New Delhi, chaired by the Union Finance Minister. The Ministry of Finance released its recommendations the same day through PIB and the GST Council website.
Are the 57th GST Council recommendations already in force?
No, not automatically. The press release says the recommendations will take effect only through circulars, notifications or amendments to the law. Until each one is notified, the current GST rules continue to apply.
What late fee relief did the Council recommend?
It recommended waiving the late fee for a GSTR-3B return filed under section 39(1) if the taxpayer's turnover in the previous year was up to ₹5 crore and the return is filed by the end of the month in which it was due.
Has the GST arrest provision been removed?
The Council recommended omitting section 69 of the CGST Act, which gives the power to arrest. It also recommended raising the prosecution threshold from ₹1 crore to ₹5 crore. Both need an amendment to the CGST Act by Parliament.
Will cancelling a GST registration become easier?
Yes, if notified. Cancellation applications in Form REG-16 would be accepted automatically once all returns are filed and dues paid. In phase 1 this applies where ITC passed on did not exceed ₹2.5 lakh in any month.
Sources: pib.gov.in · gstcouncil.gov.in
General information, not professional advice. Rules change — check the current position before acting.
