Is the 5% GST on delivery services a new tax?

No. CBIC said on 10 October 2026 that claims of a new GST on delivery are wrong: delivery services through e-commerce platforms were taxed at 18%, and the 57th GST Council recommended 5%, which is a reduction. The 5% is without input tax credit. Notification 06/2026-Central Tax (Rate) puts it in force from 1 November 2026 for delivery services supplied through an e-commerce operator by a person not required to register, with the platform paying the tax under Notification 09/2026. We read the text on CA Alley, not the CBIC site.

Have the 57th GST Council decisions become law yet?

Only some. Nothing was notified as far as we could find on 16 October 2026. From 1 November 2026 the isabgol exemption, the 5% on retreaded tractor tyres, the 5% on delivery through e-commerce platforms by unregistered persons, and Notification 03/2026-Central Tax (post-sale discounts by credit note, and provisional refunds for inverted-duty claims) are in force. The arrest, prosecution-limit and credit changes need an Act amendment, targeted for 1 April 2027. The Council makes recommendations. They take effect only when CBIC issues notifications or circulars, or Parliament and the States amend the GST Acts.

Can I still edit the auto-populated GSTR-3B?

Yes, for now. A draft open for comment on MyGov from 1 to 30 November 2026 proposes that liability is no longer corrected directly in GSTR-3B but in GSTR-1, GSTR-1A or the IFF, and that credit is managed in the IMS. It is proposed from the April 2027 return period and is not law yet. Example: the October GSTR-3B due on 20 November 2026 is filed under the current rules.

Are arrest powers under GST already removed?

Not in the law yet. The Council recommended omitting Section 69 of the CGST Act, which needs an amendment, and the Council aimed for 1 April 2027. In the meantime CBIC Instruction 02/2026-GST of 30 October 2026 tells central GST officers to carry out no further arrests. It binds CGST formations, not state officers, and it does not amend the Act.

57th GST Council Decisions (8 Oct 2026): ITC, Arrest Powers

The 57th GST Council met on 8 October 2026 (it was first notified for 12 September, then moved to 7 October, then to 8 October). The Finance Ministry's press release (PIB, posted the evening of 8 October) says the meeting was about process reforms: arrest powers are to be removed, the prosecution limit goes up, refunds get faster, several blocked credits are freed, and a few rates and exemptions change. These are Council recommendations. They take legal effect only through circulars, notifications or law amendments, and we found none issued as of 16 October. Since then some items were notified from 1 November (see the 1 November update below): three rate items (including the 5% on delivery), and Notification 03/2026-Central Tax, which starts the post-sale discount rule and the provisional refund on inverted-duty claims. Apart from those, most of what is below is not in effect yet, and the arrest, prosecution-limit and credit changes still wait for an Act amendment. What you should do differently today: if you give discounts after a sale, issue a credit note and tell the buyer to reverse the credit; if you sell retreaded tractor tyres or isabgol, use the new rates; if you supply delivery through a platform without being registered, see the delivery update below.

Status as of 16 October 2026. We found no CBIC notification, circular or Act amendment that puts these recommendations into force. This section follows the PIB press release dated 8 October, which we read as reproduced by TaxHeal because we could not open pib.gov.in, plus press coverage and a law-firm note dated 15 October that also reports nothing notified. CBIC published FAQs on the recommendations on 9 October. We have only seen summaries of them, and they explain the proposals without changing the law. Check the CBIC site and the Gazette for notifications.

Update, 1 November 2026: some of this has now been notified. Two rate items are in force from today. Notification 02/2026-Central Tax (Rate) puts retreaded tractor tyres at 5% (other retreaded or used tyres stay at 18%), and Notification 03/2026-Central Tax (Rate) makes psyllium seeds (isabgol) exempt. Both are dated 27 October. We read the notification text as reproduced by CA Alley, not on the CBIC site.

Two different notifications share the number 03/2026. The one above is the Rate notification (isabgol). The other, Notification 03/2026-Central Tax dated 26 October (S.O. 5791(E)), is not a rate notification. It brings sections 153 to 155 of the Finance Act, 2026 into force on 1 November 2026: a discount given after the sale can be left out of the taxable value if the supplier issues a credit note and the buyer reverses the matching input tax credit (sections 15(3)(b) and 34, with no prior agreement needed), and the provisional refund under section 54(6) now reaches unutilised credit claimed as an inverted-duty refund. The Council recommended 90% for these provisional refunds, and press reports of the notification give the same figure. The notification does not say whether discounts given before 1 November are covered. We read it as quoted by TaxGuru and the press, not on the CBIC site. See the Credit & Debit Note Generator and our post on bill of supply vs tax invoice vs credit/debit note.

Separately, CBIC Instruction 02/2026-GST (30 October) tells central GST formations to make no further arrests, to intercept a vehicle only on specific written intelligence from a Joint Commissioner or above, and not to issue notices under Sections 73, 74 or 74A for less than ₹10,000 of combined tax and cess. It is an interim order until the Act is amended (the Council aimed for 1 April 2027), and it does not bind state officers. We read it as reproduced by TaxGuru.

Delivery services are now notified (update, 2 November). We read the texts as hosted by CA Alley, which carry a "to be published in the Gazette" heading, not on the CBIC site, which would not open for us. Notification 06/2026-Central Tax (Rate), dated 27 October, adds an entry for delivery services (other than those listed above it) supplied through an e-commerce operator by a person not liable to register: 2.5% central tax, so 5% with state tax, on condition that no input tax credit has been taken. Notification 09/2026-Central Tax (Rate), same date, makes the operator pay that tax under section 9(5), except for a supplier who must register, and leaves out postal and courier services. Both apply from 1 November 2026. The entry we read covers only persons not required to register, so a delivery partner who must register should read both notifications for their case. We found no notification for the credit changes or the ₹5 crore prosecution limit, which need an Act amendment. CBIC also issued Circulars 257 to 264/2026-GST on 26 October on registration, adjudication, pre-deposit, Input Service Distributors and similar topics. None is a rate or late-fee change, and we have only seen press summaries of them.

Update, 15 October 2026: the 5% on delivery is a cut, not a new tax. After posts on X claimed a fresh GST on delivery, CBIC said on 10 October that delivery services through e-commerce platforms were taxed at 18% and that the Council's recommendation takes them to 5%, so tax goes down rather than up (as reported by Outlook Money and IANS; we could not open a CBIC statement itself). Two things to keep straight. The 5% is without input tax credit, so a registered business that could claim credit on the old 18% may not come out ahead. It was still a recommendation on 15 October. It was notified on 27 October and applies from 1 November 2026 (see the 2 November update above). As an illustration, 18% on a ₹50 delivery fee is ₹9 and 5% is ₹2.50. Whether a Swiggy, Zomato or cab bill falls depends on whether the platform passes the lower tax on, and the 5% does not cover other lines such as platform fees. Use the GST Calculator for the rate in force today.

The CBIC FAQs, as summarised by Taxo, split delivery into cases: a delivery provider who does not need to register gets 5% without credit, with the platform paying the tax under Section 9(5); a provider who must register gets 5% without credit and pays the tax itself; and goods transport agencies carrying e-commerce goods get 5% without credit or 18% with credit. We have not opened the FAQ document itself, so confirm against it.

Update, 2 November 2026: the GSTR-3B change is now a draft for comment. Reports dated 1 and 2 November say CBIC has put the draft return forms and an alternate mechanism for correcting liability and credit on MyGov, with comments open from 1 to 30 November 2026. We have not opened the MyGov page, only the reports (A2Z Taxcorp and TaxGst.in). As reported, the draft stops direct correction of liability in GSTR-3B. Liability is fixed in GSTR-1, GSTR-1A or the IFF, and credit is managed in the IMS. A proposed rule 61(1A) would require outward supplies in GSTR-3B to match the amended GSTR-1, and non-RCM credit to match GSTR-2B. It is proposed from the April 2027 return period and is a draft, not law. Until it takes effect, returns are filed under the current rules, so this month's GSTR-3B can still be edited. Dates for the November returns are in GST due dates in November 2026.

What the Council recommended on 8 October 2026

Enforcement

Arrest powers removed. Section 69 of the CGST Act is to be omitted. A late return, an error or late payment would mean recovery of tax, interest and a proportionate penalty. Section 132 is also tightened, with the offence of fraudulent credit limited to claims without goods, services or an invoice. This needs a law amendment, so the arrest power stays in the Act until it is passed. Meanwhile CBIC Instruction 02/2026-GST (30 October) tells central GST officers to make no further arrests.
Prosecution threshold: ₹1 crore to ₹5 crore of tax involved. Trilegal's 15 October note says a 2022 CBIC instruction already applied ₹5 crore in practice, so this mainly gives the figure legal force. Whether it applies to past cases is not clear yet.
Show-cause notices only for tax of ₹10,000 or more (CGST, SGST, IGST and cess together). Pending notices and appeals below that are to be decided as if the limit applied when they were issued.
Lower penalties. The general penalty under section 125 falls from ₹25,000 to ₹10,000. The minimum ₹10,000 penalty in non-fraud cases goes. A reduced 5% penalty applies in non-fraud cases if tax and interest are paid within 30 or 60 days of the order.
E-way bills. Goods can be intercepted only on specific intelligence, authorised by an officer of Joint Commissioner rank or above, and not in transit States.

Refunds

Faster refunds. The acknowledgement or deficiency memo window drops from 15 to 10 days, with deemed acknowledgement. For zero-rated supplies and inverted duty claims, 90% is provisionally sanctioned automatically based on risk. Excess cash-ledger balance is refunded automatically. Notified from 1 November 2026 (Notification 03/2026-Central Tax): the provisional refund under section 54(6) is extended to inverted-duty claims. The other items here still wait.
Inverted duty on input services. Accumulated credit on input services becomes refundable for credit availed on or after 1 November 2026. Capital-goods credit refunds are spread over 60 months, for credit availed on or after 1 April 2027.

Input tax credit

Section 17(5) to be amended, per the Finance Ministry release, to remove the block on credit for outdoor catering, employee health and life insurance, telecom towers, pipelines outside factory premises, free samples, and goods destroyed or written off on legally required expiry. Credit on motor vehicles is not in the list, so it stays blocked. Some press reports say 17(5) was deferred instead, and nothing is notified, so this is not in force.
Limited credit in the same line of business for restaurant and outdoor catering, hotel rooms up to ₹7,500 per unit a day, and gym and fitness services.
Late fee waiver under section 39(1) for taxpayers with prior-year turnover up to ₹5 crore who file the late return by the end of the month it was due.
Section 16(2). Press reports said the supplier-default proposal was deferred or referred to a committee. The press release does not mention it, so treat that as unconfirmed.

Registration and returns

Small e-commerce sellers with no physical presence in a State may declare an e-commerce operator's warehouse as their place of business there (new rule 14B), if the credit they pass on is up to ₹2.5 lakh a month. Check any number you get with our GSTIN Validator.
Registration and cancellation become more automatic, building on Rule 14A. Cancellation is the substituted Rule 20, in force from 1 November 2026, and it applies only after you apply in REG-16. It is a different rule from 14A and 14B. See automatic GST cancellation under Rule 20.
Returns. GSTR-1 and GSTR-3B are to be reconciled, with changes to how credit is reported, from the April 2027 return. The draft forms are open for comment on MyGov from 1 to 30 November 2026 (see the update below). You can still edit the auto-populated GSTR-3B under the current rules.
Annual return and quarterly payment. An optional scheme for taxpayers with turnover up to ₹5 crore who sell only to consumers was approved in principle. No date yet.
E-invoicing is extended to some reverse-charge supplies and to import of services, for taxpayers with turnover of ₹5 crore and above. Notified (Notification 04/2026-Central Tax, 26 October 2026): from 1 January 2027, not yet in force. It covers the self-invoice for supplies received from an unregistered person under reverse charge, and imports of services. Imports of goods are not included. See e-invoicing for RCM and import of services.

Rates and exemptions

The 5%, 18% and 40% structure is unchanged, and rate changes will be considered only once a year. The release does change a few narrow items:
- Delivery services through e-commerce platforms by people not required to register: 5% GST without ITC. Notified: from 1 November 2026 (Notification 06/2026-Central Tax (Rate)).
- Re-treaded tractor tyres: aligned with the rate for new tractor tyres. Notified: 5% from 1 November 2026 (other retreaded tyres stay at 18%).
- Psyllium seeds (isabgol): nil. Notified: exempt from 1 November 2026.
- Electric-vehicle passenger transport and vehicle rental with operator: an option to pay 5% with restricted credit.
- New exemptions for seat-sharing helicopter flights in the North-East, storage of seeds for sowing and some coffee and toll services.
UPI MDR was not discussed. The release has no MDR item, and Sitharaman said there was no MDR-related discussion. The 0.4% MDR comes from NPCI's circular, not the Council, and its 15 October start was reported deferred to after Diwali on 13 October. See MDR on UPI.

When it takes effect: the release does not give one date. Tractor tyres, isabgol, the post-sale discount rule and the inverted-duty provisional refund took effect on 1 November 2026, the date the credit refund change was also due. April 2027 is the target for the return rewrite, the arrest omission and the ₹5 crore prosecution limit, which need Act amendments. The rest waits for circulars, notifications and Act amendments.

What this means for you right now

Keep filing and booking credits under current rules. Any new credit applies only from the date in the notification, not backwards.
If you give a discount after a sale, issue a credit note and ask the buyer to reverse the matching credit. Use the Credit & Debit Note Generator. The prior agreement test no longer applies from 1 November.
If you supply delivery services through a platform without being registered, the platform pays the tax at 5% without ITC from 1 November (see the delivery update above). Use the GST Calculator for the arithmetic.
Return due dates in October are unchanged. See October GST return due dates.

How blocked credit works today

The Council's credit changes are only recommendations, so today's Section 17(5) rules still apply. Section 17(5) of the CGST Act lists items where you can't claim input tax credit even though you paid GST on them for your business. The main ones:

Motor vehicles for carrying people, with up to 13 seats including the driver, plus their repair, maintenance and insurance (clauses (a) and (ab)). Credit is allowed if you are in the business of selling cars, transporting passengers, or running a driving school.
Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, life and health insurance, and renting of motor vehicles (clause (b)).
Membership of a club, health or fitness centre (clause (b)).
Travel benefits for employees on vacation, such as leave or home travel concession (clause (b)).
Works contract services and construction of your own immovable property, apart from plant and machinery.

For most of the clause (b) items you can already claim credit if you supply the same kind of service yourself (for example, a caterer buying catering), or if a law requires you to provide it to your employees (for example, a factory canteen required under the Factories Act). When the changes are notified, expect conditions, so read the notification before changing how you book these expenses.

Where this fits: process reforms, not a rate overhaul

The 56th meeting delivered GST 2.0, the move from five slabs to 0%, 5%, 18% and 40% from 22 September 2025. See GST Rates in India 2026. The 57th is different: it is about registration, refunds, credit and enforcement, and apart from the few narrow items above it leaves rates alone.

What to do today

Change nothing in how you file, invoice or register because of the recommendations. Most are still not notified. The exceptions are the 5% on retreaded tractor tyres, the exemption for isabgol and the 5% on platform delivery by unregistered persons, all from 1 November 2026, so use those rates for supplies on or after that date, and the post-sale discount rule (credit note plus the buyer reversing credit) from the same date. See November GST due dates for filing dates.
Keep booking blocked credits as blocked (company cars, staff meals, club fees, employee travel, construction) in your returns. If the rules change, the new treatment applies only from the date in the notification, not backwards.
Delivery businesses: if you are not required to register and supply through a platform, the platform pays 5% without ITC from 1 November. If you must register, read Notifications 06/2026 and 09/2026 (Central Tax (Rate)) for your case, since the entry we read covers only persons not liable to register.
Registering a new low-risk business: the 3-day Rule 14A route already exists and does not wait for this meeting.
Exporters with stuck credit: the refund route already exists. Check your LUT status with our LUT/Export Refund Helper.

What to watch for next

Look for CBIC notifications and circulars (rate and exemption changes are usually notified within days or weeks), and for Bills amending the GST Acts (arrest powers, prosecution limits and the credit rules need these and take longer). The next dated items are the April 2027 target for the Act amendments and return changes. We will update this post with effective dates as they are notified. The GST portal is the place to check.

Sources

Official release, FAQs and post-meeting coverage:

This post reflects the PIB press release and press coverage of the 57th Council meeting held on 8 October 2026, as checked on 16 October, 1 November and 2 November 2026. Council recommendations are final only once notified, so treat every item above as provisional unless this post says it has been notified.