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GST Council eases ITC refunds from 1 November, capital goods from April 2027; 5% GST on unregistered riders' delivery
GST Council recommended spreading refunds of accumulated input tax credit on capital goods over 60 months, under an amended Section 54(3). Refunds for input services start 1 November 2026, freeing working capital for FMCG.
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What it means for online and offline
In diligence, model the 5% GST on unregistered-rider delivery against the cash released by ITC refunds, and note that capex-heavy targets only get capital goods refunds from 1 April 2027, spread over 60 months.
Signals to track
- Official notification or circular on the refund rules issued before 1 November
- GST portal readiness for filing input-services ITC refund claims
- Delivery or handling fee changes by major e-commerce and quick-commerce platforms
- Retailer and FMCG earnings commentary on working capital and refund receipts
- Reports of refund rejections or processing delays after 1 November
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- The Ministry of Finance and the tax administration are likely to issue notifications and circulars before 1 November to turn the Council's recommendations into enforceable rules.
- E-commerce and quick-commerce platforms are likely to revisit delivery-fee structures and rider onboarding, to absorb or pass on the 5% GST on deliveries by unregistered riders.
- FMCG companies and large retailers are likely to prepare refund claims for input-services ITC and to plan how to redeploy the released cash into inventory and store or fulfilment expansion.
- Retailers with heavy store, warehouse and equipment spend may model the 60-month capital goods refund schedule from 1 April 2027 into their capex planning.
- Tax officers are likely to scrutinise early refund claims, and some disputes over eligibility and documentation are likely to follow.
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