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56th GST Council Meeting : strengthens export certainty, simplifies registration for online sellers, and brings clarity on treatment of discounts
56th GST Council Meeting : strengthens export certainty, simplifies registration for online sellers, and brings clarity on treatment of discounts

September 4, 2025

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Overview

On September 3, 2025, the GST Council has taken important decisions to benefit IT enabled services and ecommerce by easing compliance, releasing working capital and reducing disputes. We appreciate the leadership of the Union Finance Minister, the GST Council, and the Department of Revenue in ensuring a detailed engagement, leading to fruitful outcomes.

Sector highlights

IT–ITES

For IT-ITES, the Council recommended omitting section 13(8)(b) of the IGST Act so the place of supply for intermediary services follows the customer’s location. This restores export status and refund eligibility for services delivered from India and aligns the regime with international practice, removing the misclassification risk. This has been a major issue for disputes, litigation and denial of refund of input credit for our industry, especially IT enabled services.

eCommerce

For eCommerce, the Council approved a simpler registration route for small suppliers selling through ecommerce across States. By reducing the need for multiple registrations, this will lower entry barriers for MSMEs and expand market access. This is expected to significantly boost growth of ecommerce.

Ease of Doing Business (EoDB)

Treatment of post-sale discounts: The Council has clarified the treatment of post-sale discounts. Allowing value reductions through credit notes with matching input tax credit adjustments, together with guidance on promotional schemes, will bring predictability for supply chains. This matters for ecommerce promotions and channel programmes as it will reduce disputes and reconciliation effort for platforms, sellers and brand owners. It will also help IT and ITES firms that sell software or subscriptions domestically.

Treatment of delivery charges: To clear up confusion on local delivery booked through e-commerce platforms, the Council has set simple rules. This is relevant to last-mile services booked on ecommerce platforms. If a delivery partner is unregistered the platform will collect and pay 18% GST; if registered, the partner will do so. Keeping these services outside freight/GTA avoids overlap, giving simpler compliance and consistent pricing across hyperlocal and same-day delivery.

Step on handling disputes: The GST Appellate Tribunal will go live, with appeals opening by September 2025 and hearings starting by December 2025. Backlog appeals can be filed until 30 June 2026, and the Principal Bench will also serve as the National Appellate Authority for Advance Ruling. This is important for IT and ITES as well as ecommerce, where issues such as classification, credit eligibility and place of supply generate high volumes of litigation. The GST Appellate Tribunal will speed resolution, and its Principal Bench acting as the national advance ruling authority will reduce state-wise divergence.

Refunds under the inverted duty structure will be faster: 90% of the claim will be paid upfront on a provisional basis, similar to export refunds. This is particularly relevant for ecommerce categories that face inverted rate structures. Paying 90% of refunds upfront on a provisional basis from 1 November 2025 will ease working capital for sellers and logistics partners, with knock-on benefits across online supply chains.

These steps support our industry’s export engine and signal a strong ease-of-doing-business direction. Restoring export certainty for services to overseas customers resolves long-standing classification disputes and refund denials in IT-enabled services, while simpler interstate registration for online sellers lowers MSME entry barriers. Clear rules on post-sale discounts (credit notes with matching ITC) and on local delivery via e-commerce (platform pays when partner is unregistered; outside GTA) reduce compliance frictions. With GSTAT timelines and 90% provisional IDS refunds from 1 Nov 2025, ease of doing business improves across platforms, sellers and exporters; we stand ready to support implementation and broader reforms.

Nasscom welcomes the reforms undertaken in the 56th GST Council meeting and will continue to engage on the remaining reform agenda across taxation, SEZ operations and labour frameworks, including the distortions in the treatment of onsite branch model for exports, to further strengthen India’s competitiveness. For more information, please refer to the Press Release.


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Historic-56-th-GST-Council-Press-Release.pdf



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