The Central Board of Indirect Taxes and Customs (CBIC) has uploaded a set of GST rate notifications dated 27 October 2026 that give effect to the rate-related recommendations of the 57th GST Council meeting. All of them apply from 1 November 2026. They change input tax credit (ITC) conditions for hotels, restaurants and outdoor caterers, bring in a concessional rate for electric vehicle (EV) transport and rental, change the tax treatment of delivery services through e-commerce operators, and add new exemptions. This update summarises the changes and lists the due dates for the coming days.
1. GST on Services: ITC Now Allowed on Same-Line Input Services (Notification No. 06/2026–Central Tax (Rate))
Notification No. 06/2026–Central Tax (Rate) amends the main services rate notification (No. 11/2017–Central Tax (Rate)). For the following services taxed at 5% (2.5% CGST + 2.5% SGST) without ITC, credit of input services procured from another supplier in the same line of business will now be allowed:
- Hotel accommodation (the 5% category): ITC on hotel accommodation bought from another hotel is allowed, but only up to 2.5% CGST (and matching SGST). If the other hotel charges a higher rate, credit above 2.5% cannot be taken. The notification illustrates this: on a room bought at ₹10,000 with CGST of ₹900 (9%), credit is limited to ₹250.
- Restaurant services (other than at specified premises): ITC on restaurant services bought from another restaurant service provider is allowed.
- Food and drinks supplied in trains or at platforms: ITC on inputs and input services procured from Indian Railways, IRCTC or their licensees is allowed.
- Outdoor catering (including composite supply with renting of premises, other than at specified premises): ITC on outdoor catering bought from another caterer is allowed, capped at 2.5% CGST (and matching SGST).
- ITC on all other goods and services used for these supplies remains blocked, as before. This includes, for example, OTA (online travel agent) commission, laundry and housekeeping services, rent, furniture, air-conditioners and kitchen equipment. These are not “the same line of business” as the outward supply. Taking such credit would breach the condition for the 5% rate.
Example 1 – Hotel (based on the illustration in the notification): A guest books a room with Hotel B for ₹7,000 per day. Hotel B arranges the room from Hotel C for ₹10,000 per day. Hotel C charges 18% GST (CGST ₹900 + SGST ₹900). Hotel B charges the guest 5%. Hotel B can take ITC of only ₹500 (CGST ₹250 + SGST ₹250, i.e. 5% of ₹10,000), not ₹1,800. For inter-State supplies, Notification No. 06/2026–Integrated Tax (Rate) limits the credit to 5% IGST in the same way.
Example 2 – Outdoor catering (based on the illustration in the notification): Caterer B takes a wedding catering order, together with renting of premises, for ₹1,00,000 at 5%. B engages another caterer, C, for ₹60,000, and C charges 18% (CGST ₹5,400 + SGST ₹5,400). B can take ITC of only ₹3,000 (CGST ₹1,500 + SGST ₹1,500), not ₹10,800.
Example 3 – Restaurant: Restaurant A buys restaurant service from Restaurant B for ₹20,000 plus 5% GST (₹1,000) to meet a bulk order. A can take the ₹1,000 credit. The notification does not prescribe a cap for restaurant services. Credit on A’s rent, equipment and other inputs remains blocked.
Hotel rooms with a value above ₹7,500 per unit per day are taxed at 18% with full ITC and are not affected by this change. A hotel that supplies rooms in both categories should attribute credits correctly and reverse common credit as required under rules 42 and 43 of the CGST Rules. The 57th GST Council’s recommendation also referred to gym and fitness services. The notifications issued so far do not cover them, so they continue under the existing provisions until a separate notification is issued.
2. GST on Electric Vehicle Transport and Rental
- New entries cover (a) transport of passengers by an electrically operated vehicle, (b) renting of an electrically operated vehicle for passengers and (c) renting of an electrically operated vehicle for goods, in each case where the cost of battery charging is included in the price.
- The supplier has the option to pay GST at 5%, with ITC only on same-line input services (capped at 5% GST), or at 18% under the alternative rate given in the entry.
- An “electrically operated vehicle” is defined as a road vehicle running only on electrical energy from an external source or on-board batteries, and includes e-bicycles.
3. Delivery Services through E-commerce Operators and GTA Changes
- Rate: Delivery services (other than those covered elsewhere in the entry) supplied through an e-commerce operator by a person not liable to register, or delivery services relating to goods sold through an e-commerce operator, attract 5% without ITC.
- Who pays: Notification No. 09/2026–Central Tax (Rate) amends the section 9(5) notification. The e-commerce operator pays tax on delivery services (other than postal and courier services) supplied through it, except where the actual supplier is itself liable to register under section 22(1).
- Goods Transport Agency (GTA): The definition is now “any person who provides service in relation to transport of goods by road and issues a consignment note by whatever name called”. The GTA exemption in entry 21A of the exemption notification will not apply to GTA services for goods supplied through an e-commerce operator.
4. New GST Exemptions on Services (Notification No. 07/2026–Central Tax (Rate))
- Helicopter passenger transport on a seat-share basis to or from airports and helipads in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Bagdogra (West Bengal).
- Storage or warehousing of cereals, pulses, fruits, vegetables and seeds meant for sowing. A detailed definition of “seed” has been added.
- Services by the Seamen’s Provident Fund Organisation to persons covered by the Seamen’s Provident Fund Act, 1966.
- Grant of an exclusive right of way or access, licence and authority to collect toll by a government, local authority, governmental authority or government entity.
- Curing of coffee supplied to coffee cultivators.
5. Other Rate Changes from 1 November 2026
- Retreaded tractor tyres move to the 5% schedule. Other retreaded or used tyres stay at 18% (Notification No. 02/2026–Central Tax (Rate)).
- Organic fertilisers: The 5% entry for pre-packaged and labelled animal, vegetable or organic fertilisers now expressly covers seaweed-extract-based bio-stimulants registered under the Fertiliser Control Order.
- Psyllium seeds (isabgol) under tariff item 1211 90 13 are added to the exempt goods list (Notification No. 03/2026–Central Tax (Rate)).
- Reverse charge on goods: Notification No. 04/2026–Central Tax (Rate) brings used cooking oil, waste and scrap of plastics, waste and scrap of tyres, and electrical and electronic waste and scrap under reverse charge when supplied by an unregistered person to a registered person. This works alongside the registration and GST TDS changes for scrap that we covered on 29 October.
- Toll-Operate-Transfer (TOT) projects: Notification No. 10/2026–Central Tax (Rate) prescribes a special procedure. Concessionaires supplying operation and maintenance services to the concessioning authority pay GST on the amount charged or debited from the escrow account towards such expenses, in the tax period in which it is charged or debited.
- Reverse charge on services: Notification No. 08/2026–Central Tax (Rate) substitutes the figure “6” with “9” in column (3) against serial number 15 of the reverse charge notification (No. 13/2017–Central Tax (Rate)). Businesses that pay tax under reverse charge on the service covered by this entry should review the amended text.
- Corresponding Integrated Tax (Rate) and Union Territory Tax (Rate) notifications have been issued for each of these changes.
6. What Businesses Should Do Before 1 November 2026
- Hotels, restaurants and caterers: update ITC rules in your accounting or ERP system so that only eligible same-line credit, within the cap, is claimed.
- EV fleet operators and rental businesses: decide on the rate option and update invoice templates.
- E-commerce sellers, delivery partners and transporters: review who pays tax on delivery and GTA services from 1 November.
- Buyers of scrap and used cooking oil from unregistered persons: set up reverse charge self-invoicing and payment.
- Reminder: quarterly TDS/TCS statements for July to September 2026 are due today, 31 October 2026.
Upcoming Due Dates at a Glance
| Compliance | Period / Applicability | Due Date |
|---|---|---|
| Quarterly TDS/TCS statements | Q2 (July–September 2026) | 31 October 2026 |
| GST rate notifications (goods and services) | Effective date | 1 November 2026 |
| TDS/TCS deposit | Deductions made in October 2026 | 7 November 2026 |
| GSTR-7 (GST TDS) / GSTR-8 (GST TCS) | October 2026 | 10 November 2026 |
| GSTR-1 (monthly filers) | October 2026 | 11 November 2026 |
| GSTR-3B (monthly filers) | October 2026 | 20 November 2026 |
| Income Tax Return (audit cases) | AY 2026-27 | 21 November 2026 |
| GSTR-9 / GSTR-9C | FY 2025-26 | 31 December 2026 |
| AOC-4 and its variants | FY 2025-26 | 31 December 2026 (extended) |
| MGT-7 / MGT-7A | FY 2025-26 | 31 January 2027 (extended) |
How North West Consultancy Can Help
North West Consultancy (NWC) assists businesses in India and overseas with GST rate and ITC reviews, reverse charge and e-commerce compliance, GST and TDS returns, ROC filings, DSC and accounting. For help with any of the changes above, contact us.
Office: 210, Vitthal The Mall, Koba Gandhinagar Road, Near Vishwakarma Engineering College, Ahmedabad, Gujarat – 382424
Raviraj Upadhyay (Partner): +91 90338 52145
Prashant Joshi (Partner): +91 97146 56484
Email: fca.raviraj@gmail.com
Official Sources
- CBIC Tax Information Portal – GST Notifications: Notification Nos. 02/2026 to 10/2026–Central Tax (Rate) dated 27 October 2026, with the corresponding Integrated Tax (Rate) and Union Territory Tax (Rate) notifications
- GST Portal – News and Updates (Recommendations of the 57th GST Council Meeting, with the PIB press release dated 8 October 2026)
- Income Tax Department – Latest News (CBDT Circular No. 07/2026 on due dates)
Disclaimer: This update is for general information only and is based on official notifications available on the date of publication. It is not professional advice. Please read the official text and consult a professional before acting on it.
