Key Clarifications Issued by CBIC vide Circulars dated 26 October 2026
by Reina Legal | Oct 28, 2026
Dear All,
The Central Board of Indirect Taxes and Customs (CBIC) has issued eight Circulars pursuant to the recommendations of the 57th GST Council Meeting, providing clarifications on GST registration, demand and adjudication proceedings, appeals, input tax credit (ITC), export proceeds and refund-related matters. The key aspects of the Circulars are summarised below.
| Circular No. |
Key Clarifications |
257/03/2026-GST
GST registration: guidelines for applicants |
- Prescribes FAQs, document checklists and guidelines to facilitate registration and minimise unwarranted queries and rejections
- Specifies documentary requirements for establishing the principal place of business (PPoB) in cases involving owned, rented, consent-based, co-working and SEZ premises
- Telecom towers and ATMs need not be declared as PPoB/ Additional Place of Business
|
258/04/2026-GST
Demand, adjudication and appeal proceedings |
- Show cause notice (SCN) invoking fraud, wilful misstatement or suppression must state specific facts and Sections 74/74A cannot be invoked merely for non-payment of GST or a scrutiny discrepancy
- Coordination between CGST and SGST authorities to prevent parallel proceedings on the same matter
- Maximum 4 personal hearings for adjudication, virtual hearings encouraged, proper and detailed records of hearing, order preferably within one month of the hearing
- Orders must be speaking orders, confined to SCN grounds, with issue-wise and year-wise quantification
- Appeal filed beyond the statutory limitation period, where the delay is not condonable, ought not to be adjudicated on merits, even where a prima facie case is discernible
|
259/05/2026-GST
Pre-deposit for appeals |
- Pre-deposit refund to be claimed through RFD-01 under “on account of order” on receipt of a favourable order
- Refund cannot be denied merely because the Department plans a further appeal, unless the order is stayed by the Tribunal or Court
- Interest on refund runs from the actual payment date, separately for each appeal level
|
260/06/2026-GST
Input Service Distributor (ISD) |
- No bar on obtaining more than one ISD registration for each business vertical or each place of business, as the case may be, within a State or UT
- ISD is responsible for distributing ITC correctly, while recipient distinct persons are responsible for eligibility checks and applicable reversals under relevant provisions
- Documents issued under Rule 54(1A) merely facilitate ITC transfer and do not constitute outward supplies, thus the amounts are excluded from turnover computations
|
261/07/2026-GST
Section 17(4): banks and NBFCs |
- Applicability and manner of exercising the 50% ITC restriction under Section 17(4) by banks and NBFCs
|
262/08/2026-GST
ITC on demo vehicles: dealer-agency model |
- Withdraws paragraph 4.6 of Circular No. 231/25/2024-GST dated 10 September 2024, which denied ITC on demo vehicles purchased by authorised dealers operating under the dealer-agency model
- ITC on demo vehicles is not blocked under Section 17(5)(a), aligning the treatment with that applicable to traditional dealership models. Demo vehicles serve the same commercial purpose of facilitating the further supply of similar motor vehicles, irrespective of whether the final sale is made by the dealer or directly by the original equipment manufacturer
|
263/09/2026-GST
Receipt of payment for exports |
- Export-of-services proceeds received in Special Non-Resident Rupee (SNRR), INR Nostro or other repatriable INR accounts satisfy condition of export of services under section 2(6)(iv)
- Realisation period of proceeds for export of goods is as per the RBI Master Direction
- No recovery of refund under Rule 96B if the authorized dealer bank has written off the realisation
|
264/10/2026-GST
Omission of Rule 96(10) |
- Following the Supreme Court’s judgment in Goodluck India Limited, omission of Rule 96(10) is clarified to have retrospective effect from 23 October 2017. Same treatment applies to the omission of Rules 89(4A) and 89(4B)
- Exporters facing pending demands or refund denials under these provisions may seek relief in accordance with the judgment and the procedural status of their cases
|
Click here to download a copy of the Circulars
