GST reforms: Easier registration for small e-commerce sellers, faster refunds to take effect Nov 1

The move could enable around 9.5 lakh small sellers to access the national market without having to establish physical offices in every state where their goods are stored, while creating greater tax parity across competing e-commerce business models.

The 57th GST Council meeting on October 8 approved a host of reforms in GST processes, primarily covering registration, returns, refund. The council decisions implemented through administrative processes will be brought into effect in phases starting from November 1, 2026.

Following is the list of GST process changes that would come into force from Sunday, November 1.

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SIMPLIFIED REGISTRATION FOR SMALL E-COMMERCE SELLERS

Small suppliers selling goods through e-commerce (ECO) platforms in multiple states/UTs, where they do not have a physical presence, and pass on input tax credit of up to Rs 2.5 lakh per month, can declare ECOs warehouse in that state/UT as their principal place of business (PPoB).

A seller would need to have a genuine presence in one state, where physical verification and Aadhaar authentication would be completed, while registrations in other states could be obtained with the consent of the e-commerce platform without further involvement of tax officer.

The move could enable around 9.5 lakh small sellers to access the national market without having to establish physical offices in every state where their goods are stored, while creating greater tax parity across competing e-commerce business models.

Also Read | GST officers must prove intent to evade tax before invoking fraud provision: CBIC

The GST department has specified documents and information required for GST registration from November 1, a move which would simplify the filing and processing of registration applications.

The GST portal will provide user-friendly interface for filing registration application with clear navigational paths, drop-down lists, tool-tips.

This will reduce rejections and queries raised in respect of registration applications on account of lack of correct information/details and will expedite processing of registration applications.

Full refund claim of excess balance in the electronic cash ledger will be sanctioned automatically by the system, without officer intervention.

For refund claims on account of zero-rated supplies and inverted duty structure, 90 per cent of the amount claimed will be sanctioned on provisional basis automatically by the system, without officer intervention, on the basis of identification and evaluation of risk by the system.

A longstanding industry concern on tax treatment of post-supply discount will be addressed from November 1 as the government has allowed greater flexibility in passing on post-supply discounts without the earlier requirements of a pre-existing agreement and invoice-specific linkage, while retaining the necessary safeguards around credit notes and corresponding input tax credit reversal.

Deloitte India, Partner and Indirect Tax Leader, Mahesh Jaisingh said, "The change is particularly relevant for sectors such as FMCG, manufacturing and small businesses, where volume-based incentives, trade schemes and year-end rebates are integral to commercial arrangements. In specific, MSME sellers will have a working capital relief on account of this change being implemented".