The Government has notified The Finance Act (No.4), 2026 on 30th March, 2026, to give effect to the financial proposals of the Central Government for the financial year 2026-2027. The Finance Act, 2026, enacted on 30 March 2026, brings about significant amendments to the Goods and Services Tax framework having primary impact provisions relating to valuation, place of supply, refunds, and appellate procedures. 

The key highlights of the changes under GST Law are regarding:

A. Amendment to Section 15 & Section 34 – Post-Supply Discounts

Amendment made remove the pre-agreement requirement for Post-supply discount. Now, post-supply discounts can be adjusted through issuance of credit notes, even if not pre-agreed, subject to reversal of ITC by the recipient. This change was earlier recommended in the 56th GST Council meeting held on 3rd September 2025 and would be Effective from a date to be notified.

Correspondingly, amendment made in Section 34, to expressly include post-sale discounts referred to in section 15(3)(b) as a ground for issuance of credit notes. To be Effective from a date to be notified.

Prior to the amendment Post-supply discounts were allowed as deduction from value of supply only if (a) Such discount was established in terms of an agreement entered into at or before the time of supply; and (b) ITC attributable to the discount was reversed by the recipient.

B. Amendment to Section 54 – Provisional Refund 

Amendment made to expand the scope of 90% provisional refunds to include cases of inverted duty structure, in addition to zero-rated supplies. This means that taxpayers facing accumulation of input tax credit due to higher input tax rates can now avail provisional refunds, similar to exporters. The amendment aligns IDS refund treatment with that of zero-rated supplies, subject to prescribed safeguards and procedural compliance. This amendment will extend the similar fast-track provisional refund (on a risk-based basis) to unutilised ITC arising from inverted duty structure cases under Section 54(3)(ii). To be effective from a date to be notified

Earlier under Section 54 of the CGST Act, provisional refund was primarily restricted to cases involving zero-rated supplies, i.e., exports of goods or services and supplies made to Special Economic Zones (SEZ). In such cases, eligible taxpayers could claim up to 90% of the refund amount on a provisional basis. 

C. Amendment to Section 54(14) – Removal of Minimum Refund Threshold for Refund Claims on Exports (with Payment of Tax)

Amendment made to inserts an exception to Section 54(14) which provides that no refund under sub-section (5) or sub-section (6) shall be granted where the refund amount is less than ₹1,000. In other words, the ₹1,000 threshold shall not apply in cases where refund of tax is claimed on account of export of goods with payment of tax (IGST). Refund of IGST paid on export of goods will now be granted irrespective of the amount involved, even if less than ₹1,000. This would remove procedural hardship for exporters, particularly in cases involving low-value consignments. The amendment shall come into force from a date to be notified.

Under the earlier provisions of Section 54(14), refund claims were subject to a minimum threshold limit of ₹1,000. Any refund amount falling below this limit was not processed or granted by the tax authorities. This often resulted in small amounts remaining unclaimed, particularly affecting taxpayers with frequent low-value transactions or minor excess tax payments.

D. Amendment to Section 101A – Changes in Advance Ruling Appellate Mechanism

A new sub-section (1A) has been inserted to empower the Central Government, on the recommendations of the GST Council, to notify any existing Authority (including a Tribunal) to act as the National Appellate Authority on an interim basis. Effective from 1st April, 2026.

Key features of the amendment:

• Government may authorize an existing Authority to hear appeals under section 101B.
• Sub-sections (2) to (13) of section 101A shall not apply in such cases.
• References to the National Appellate Authority shall be construed as references to the notified Authority.
• “Existing Authority” expressly includes a Tribunal.

Earlier, Section 101A of the CGST Act provided for constitution of the National Appellate Authority for Advance Ruling (NAA) to resolve conflicting advance rulings. However, due to non-constitution of the NAA, appeals under section 101B remained largely non-functional, resulting in unresolved conflicts between State Appellate Authorities.

E. Amendment to Place of Supply for Intermediary Services (IGST Act) – Omission of Section 13(8)(b)

Amendment made to omit the specific place of supply provision for intermediary services, thereby bringing such services within the ambit of the default rule, i.e., the location of the recipient. This shift is likely to benefit exporters of services, particularly in the IT and business process outsourcing sectors, by enabling such supplies to qualify as exports, subject to fulfillment of other conditions. To be effective date the Finance Bill receives President’s assent.

Earlier, Section 13(8)(b) of the IGST Act provided that the place of supply for intermediary services shall be the location of the supplier, overriding the general rule under Section 13(2) (location of recipient).

The Finance Act, 2026 can be accessed at https://taxo.online/wp-content/uploads/2026/03/FinanceAct2026.pdf