Budget Alert 2026: Major GST Refund Reforms for Businesses 🚀
The Finance Bill, 2026 has introduced pivotal changes to the CGST Act refund framework, aiming to unlock working capital and simplify compliance for both exporters and domestic manufacturers.
📝 Key Amendments at a Glance
• Provisional Refunds for Inverted Duty Structure (IDS):
The scope of Section 54(6) is being expanded. Previously, the 90% provisional refund was primarily for zero-rated supplies (exports). Now, businesses facing an Inverted Duty Structure (where tax on inputs is higher than tax on outputs) can also claim a 90% provisional refund upfront, significantly improving cash flow.
• Removal of the ₹1,000 Threshold for Exports:
In a major boost for small exporters, Section 54(14) is being amended. The existing restriction—which barred refund claims below ₹1,000—will no longer apply to goods exported out of India where tax has been paid. This is a game-changer for MSMEs and those using courier or postal channels for low-value consignments.
