1. Title of the Document
| Document Title | Notification appointing 1 November 2026 as the date on which sections 153 to 155 of the Finance Act, 2026 (4 of 2026) shall come into force |
| Document Number | Notification No. 03/2026–Central Tax [F. No. CBIC-20001/1/2026-GST] |
| Issuing Authority | Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs |
| Date of Document | 26 October 2026 (Kartika 4, 1948 Saka); effective date appointed: 1 November 2026 |
| Relevant Provisions | Section 1(2)(b) of the Finance Act, 2026 – power of the Central Government to appoint the commencement date of the deferred provisions. Section 153 – substitutes Section 15(3)(b) of the CGST Act, 2017 (exclusion of post-supply discounts from value of supply). Section 154 – amends Section 34(1) of the CGST Act (grounds for issuing credit notes). Section 155 – amends Section 54(6) (provisional refund of 90% of the claim) and Section 54(14) (no refund below ₹1,000) of the CGST Act. |
2. Summary of the Document
The Central Government has issued Notification No. 03/2026–Central Tax dated 26 October 2026 in exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2026 (4 of 2026). By this notification, 1 November 2026 has been appointed as the date on which sections 153 to 155 of the said Act shall come into force. It is a commencement notification and does not itself prescribe any procedure or form.
Section 153 of the Finance Act, 2026 substitutes clause (b) of section 15(3) of the CGST Act, 2017, which governs exclusion of post-supply discounts from the value of supply. Earlier, such a discount could be excluded only where it was established by an agreement entered into at or before the time of supply, was specifically linked to relevant invoices, and the recipient had reversed the attributable input tax credit. The substituted clause dispenses with the prior agreement and invoice linkage, and permits exclusion where the supplier issues a credit note and the recipient reverses the attributable credit in accordance with section 34.
Section 154 correspondingly amends section 34(1) of the CGST Act to recognise expressly a discount referred to in section 15(3)(b) as a ground for issuing a credit note. Section 153 thus confers the valuation benefit, while section 154 supplies the mechanism for availing it, subject to the time limit in section 34(2).
Section 155 makes two changes to section 54, which governs refunds. Section 54(6), which allowed provisional refund of ninety per cent of the claim only for zero-rated supplies, is extended to refunds of unutilised input tax credit on account of inverted duty structure under clause (ii) of the first proviso to section 54(3). Section 54(14), which bars refunds below one thousand rupees, no longer applies to refund of tax paid on goods exported out of India with payment of tax.
Legal Takeaway: The amendments operate prospectively from 1 November 2026, and the notification gives them no retrospective effect. Discounts, credit notes and refund claims of earlier periods will continue to be tested under the erstwhile law, including the conditions of the earlier section 15(3)(b) and the mechanism for evidencing reversal of credit explained in Circular No. 212/6/2024-GST. In pending disputes where post-sale discounts were disallowed for want of a prior agreement or invoice linkage, the amendment cannot by itself cure past non-compliance, though it reflects a legislative shift that may be urged in support of a reasonable construction. Consequential changes to the Rules and circulars should be tracked.
Suppliers and recipients should realign discount schemes, credit note workflows and accounting systems so that GST credit notes for qualifying discounts are issued under section 34 from 1 November 2026, with a reliable method of confirming reversal of credit by the recipient. Taxpayers with accumulated credit due to an inverted rate structure, and exporters with small refund claims of tax paid on exported goods, should plan prospective claims to benefit from the provisional refund facility and the relaxed threshold.
3. Tabular Summary
| Sr. No. | Finance Act, 2026 Provision | CGST Act Provision Amended | Subject | Position up to 31.10.2026 | Position from 01.11.2026 | Impact | Action Points |
|---|---|---|---|---|---|---|---|
| 1 | Section 153 | Section 15(3)(b) | Post-supply discounts in value of supply | Discount excluded only if agreed at or before supply, specifically linked to invoices, and attributable ITC reversed by recipient | Prior agreement and invoice linkage dispensed with; discount excluded where credit note is issued and recipient reverses attributable ITC under Section 34 | Year-end, target and scheme discounts can reduce taxable value | Revise discount policies; issue GST credit notes; obtain confirmation of ITC reversal |
| 2 | Section 154 | Section 34(1) | Credit notes | Credit note permitted for excess value or tax, return of goods, or deficient supply; discounts not expressly covered | Discount under Section 15(3)(b) expressly recognised as a ground for issuing a credit note | Express statutory basis for GST credit notes on post-supply discounts | Configure accounting systems; observe Section 34(2) time limit |
| 3 | Section 155(a) | Section 54(6) | Provisional refund | 90% provisional refund available only for zero-rated supplies | Extended to refund of unutilised ITC on inverted duty structure under clause (ii) of first proviso to Section 54(3) | Faster cash flow for taxpayers with inverted rate structure | File inverted duty refund claims and track provisional sanction |
| 4 | Section 155(b) | Section 54(14) | Minimum refund threshold | No refund where amount is less than ₹1,000 | Threshold not applicable to refund of tax paid on goods exported with payment of tax | Small export refund claims no longer barred | Review small IGST refund claims on exports of goods |
Download the Document: Notification No. 03/2026–Central Tax dated 26 October 2026 (PDF)
Disclaimer: Prepared by Team GSTIndiaguide.com. This summary is for information and does not constitute legal advice. Refer to original notification, judgement, circular or other documents for reference.
To enjoy live updates on whatsapp, join GST Updates Group: https://chat.whatsapp.com/J8UIAfpz3mlGgqlATU3QzY
