GST has seen several changes over the last year, from a simpler rate structure to new rules in the Finance Act 2026 and a working appeals tribunal. This note sums up what changed, who it affects and what to do about it. It is general information and is written from the official notifications, circulars and court orders listed at the end.
Key points at a glance
- Since 22 September 2025, most goods are taxed at 5%, 18% or 40%, with a few special rates (3%, 0.25% and 28%). Services are nil, 5%, 18% or 40%.
- From the Finance Act 2026, “intermediary services” follow the normal place of supply rule, so more cross-border services can qualify as exports.
- A post-sale discount reduces your taxable value only if a credit note is issued and the buyer reverses the input tax credit. The effective date is still to be notified.
- The GST Appellate Tribunal (GSTAT) is working, and the extended deadline for old orders was 31 July 2026.
- The Bombay High Court has held that blocking input tax credit cannot go beyond the credit actually available in the ledger.
1. New GST rate structure from 22 September 2025
Notification No. 09/2025-Central Tax (Rate), dated 17 September 2025, reorganised the goods rates from 22 September 2025. The notification sorts goods into schedules:
- 5% (2.5% CGST + 2.5% SGST): food and essential goods
- 18% (9% + 9%): general items
- 40% (20% + 20%): luxury and sin goods, such as big motor vehicles and cold drinks
- 3% (1.5% + 1.5%): gold, diamonds and silver
- 0.25% (0.125% + 0.125%): rough diamonds and precious stones
- 28% (14% + 14%): pan masala, tobacco and similar goods
The separate 12% slab no longer appears in these schedules. A companion exemption notification, No. 10/2025-Central Tax (Rate), also dated 17 September 2025, lists the goods that remain exempt. For services, the rate categories are nil, 5% with input tax credit, 5% without input tax credit, 18%, 40%, and in some cases a choice between 5% without credit or 18% with credit.
What to do: check the HSN or SAC code and the rate on every invoice template and price list, and confirm you are not still billing an older rate on supplies made after 22 September 2025. You can try the rates in our GST calculator.
2. Finance Act 2026: intermediary services
Section 13(8)(b) of the IGST Act used to say that the place of supply of intermediary services is the location of the supplier. The Finance Act 2026 omitted that clause (section 157 of the Act). As a result, intermediary services now fall under the general rule in section 13(2), where the place of supply is the location of the recipient.
If your customer is outside India and the other conditions for export of services are met, the supply can now be treated as an export, which is zero-rated and allows you to claim a refund. TaxByKK’s commentary treats the change as applying to transactions on or after 1 April 2026 and says earlier circulars and rulings on whether something is an “intermediary service” do not apply to later transactions.
What to do: if you earn commissions or arranging fees from overseas clients, review your contracts and invoices and check whether you can now claim zero-rated treatment and a refund.
3. Finance Act 2026: post-sale discounts and credit notes
Under section 15(3)(b), a discount given after the supply reduces the taxable value only in certain cases. The Finance Act 2026 substituted this clause so that such a discount is excluded from value only if the supplier issues a credit note and the recipient reverses the input tax credit linked to that discount, in line with section 34. A matching change has been made to section 34(1) on credit notes. The Act says these changes take effect on a date to be notified, so they are not yet in force.
In practice this mainly affects B2B supplies. A “financial” or commercial credit note that does not follow section 34 will not reduce your output tax or the buyer’s credit reversal.
What to do: if you give volume or target discounts, make sure they are recorded in a proper GST credit note, and agree with your buyers who will reverse the credit.
4. GST Appellate Tribunal (GSTAT)
The online portal for filing appeals before GSTAT has been working since 24 September 2025. A notification dated 30 June 2026 extended the last date for filing appeals and applications to 31 July 2026 for older orders. That covers orders communicated before 1 May 2026 (appeals) and orders passed before 1 February 2026 (applications). For orders on or after those dates, the normal limits under section 112 apply: three months from communication of the order for an appeal, and six months from the date of the order for an application.
On 10 July 2026 GSTAT introduced a token system. A taxpayer could generate a token by 31 July 2026 by giving basic details and then had 60 days from the token date to complete the filing. A separate token was needed for each appeal. Those dates have now passed, so anyone with an older order who did not file should speak to a professional at once about what options remain.
A separate circular, No. 256/02/2026-GST dated 25 July 2026, explains how the department files appeals before GSTAT in cases adjudicated by the common adjudicating authority after DGGI investigations. The jurisdictional commissioner reviews the order, and separate appeals are filed for each taxpayer before the bench that covers that taxpayer.
What to do: note the time limit from the date an order reaches you, keep proof of the date, and do not wait until the last week to file.
5. Court ruling: limits on blocking input tax credit
In Hemang Bipin Varaiya v. State of Maharashtra (Writ Petition No. 3452 of 2026, decided on 18 March 2026), the Bombay High Court looked at Rule 86A of the GST Rules. It held that credit can be blocked only up to the amount actually available in the electronic credit ledger on the date of the order, and that the rule does not allow blocking of credit that may arrive in the future (a “negative balance”). The court followed the views of the Gujarat and Delhi High Courts and did not follow a Calcutta High Court decision. It quashed the block to the extent it went beyond the credit available and left the department free to issue a show cause notice.
This is a court decision and not a change in the law, and other courts may take different views. It is still useful if your credit has been blocked.
How Brightfin can help
If you are not sure how these changes affect your business, we can review your rates, invoices and returns. See our GST registration, GST return filing and GST advisory services, or message us on WhatsApp.
Sources
- Notification No. 09/2025-Central Tax (Rate), dated 17.09.2025, and Notification No. 10/2025-Central Tax (Rate), dated 17.09.2025
- The Finance Act, 2026, section 157 (omission of section 13(8)(b) of the IGST Act) and the amendments to sections 15(3) and 34(1) of the CGST Act
- GSTAT notification dated 30.06.2026 on the last date for filing appeals and GSTAT Order No. 156/2026 dated 10.07.2026 on token generation
- Circular No. 256/02/2026-GST dated 25.07.2026
- Bombay High Court, Writ Petition No. 3452 of 2026, order dated 18.03.2026
This article is for general information only and is not legal or tax advice. Rules and effective dates can change, so check the current notification or speak to a professional before you act.
