🧾 Finance Bill 2026 — Chapter V

GST Updates 2026 — What Changed

Finance Bill 2026 amends the Central GST Act, 2017 and the Integrated GST Act, 2017 — with changes to valuation, credit notes, refunds, place of supply, and advance rulings. Here’s what every GST-registered business needs to know.

💼 CGST Valuation Rules — Section 15 Amendment

Section 15 of the CGST Act governs the value of taxable supply. The 2026 amendment clarifies:

• Related-party transactions: Open market value must be used even if the recipient is eligible for full ITC
• Subsidies: Government subsidies directly linked to price shall not be included in taxable value
• Discounts: Post-supply discounts now excluded from value only if the reversal of ITC by recipient is confirmed in GSTR-2B
• Digital services: New valuation rule for B2C cross-border digital services supplied to Indian consumers

📝 Credit Notes — Section 34 Amendment

Section 34 governs the issuance of credit and debit notes. The 2026 amendment tightens compliance:

• Credit notes must be declared in GSTR-1 within 30th November of the following financial year (was 30th September)
• Credit notes for B2B supplies must be linked to specific invoices — free-text reasons no longer accepted
• Recipient’s GSTR-2B reconciliation required before credit note adjustment is allowed
• E-credit notes (via IRP portal) made mandatory for turnovers above ₹5 crore

💸 GST Refund Rules — Section 54 Amendment

• Refund application timeline extended from 2 years to 3 years from the relevant date
• Refund of ITC on account of inverted duty structure — new formula introduced to reduce disputes
• Export refunds: Processing timeline reduced from 60 days to 30 days for IGST paid exports
• Bank account validation through PFMS made mandatory before refund disbursal
• Provisional refund (90%) granted within 7 days for exporters with clean compliance record

🌐 IGST Place of Supply — Section 13 Amendment

Section 13 determines the place of supply for cross-border services when the location of supplier or recipient is outside India. The 2026 amendment:

• Online gaming services supplied to Indian consumers — place of supply is India regardless of supplier location
• Satellite-based services — place of supply aligned with location of the end-user terminal
• Data hosting and cloud services — specific rule added: place of supply is India if data is processed/stored here

🔍 Advance Ruling — Section 101A Amendment

Section 101A was inserted to handle conflicting advance rulings by different State AAR benches. The 2026 amendment:

• The GST Council-appointed centralised National Appellate Advance Ruling Authority (NAARA) is formally empowered
• NAARA ruling is binding on all states — resolving the problem of contradictory state AAR orders
• Applications to NAARA must be filed within 90 days of conflicting state AAR order