Key Legal Shifts
- Section 15 CGST: Simplification of post-sale discount eligibility.
- Inverted Duty Structure: Provisional refunds now provide immediate liquidity relief.
- IGST Intermediary Services: Default “place of supply” rules now apply, reducing litigation.
- Appellate Tribunals: Full operational empowerment effective April 2026.
Legislative Amendments and Simplification
- Simplified Post-Sale Discounts: Requirements for linking post-sale discounts with specific agreements have been removed to ease compliance.
- Accelerated Refunds for Exports: The ₹1,000 threshold for sanctioning refund claims on exported goods has been removed.
- Inverted Duty Structure Relief: Provisions for provisional refunds are now extended to cases involving inverted duty structures.
Reform Express
As part of the ‘Reform Express’ initiative, the Budget 2026-2027 introduces significant amendments to the CGST and IGST Acts. These changes focus on streamlining refund processes, simplifying compliance for post-sale discounts, and enhancing the efficiency of the tax administration framework.
Fiscal Impact and Governance
- 15% of Total Government Receipts: GST and other taxes remain a primary revenue driver, contributing 15% of every rupee earned.
- Revenue Source Breakdown (Rupee Comes From):
- Income Tax (21%)
- Corporation Tax (18%)
- Intermediary Services Rule Change: The place of supply for intermediary services will now follow default statutory provisions.
- Interim Appellate Measures: Existing Tribunals are empowered to hear appeals pending the constitution of the National Appellate Authority.
- Share Buyback Taxation Shift: Buybacks are now treated as Capital Gains for shareholders; additional tax for promoters.
- Creation of ‘Corporate Mitras’: A new cadre of professionals to assist MSMEs with compliance in smaller towns.
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