GST law has undergone significant reforms in 2025–2026, aimed at simplification, easing compliance, and improving liquidity for businesses. Key changes include a new simplified rate structure (GST 2.0), revised export refund rules, post-sale discount provisions, and new appellate mechanisms — all reflecting the government’s push toward a more transparent, business-friendly, and litigation-reducing GST framework across India.
1. GST 2.0 — New Rate Structure
India’s GST rate structure was overhauled from 22 September 2025, replacing the earlier 5%, 12%, 18%, and 28% slabs with a simplified three-tier structure of 5%, 18%, and 40%. The 5% “Merit Rate” covers essentials like packaged food and household items, while 18% is now the standard rate for most goods and services, and 40% applies to luxury/sin goods. This reform eases compliance and reduces classification disputes for traders, including in Bihar.
2. Post-Sale Discount Rationalization
Section 15(3)(b) of the CGST Act was amended so that post-sale discounts are now deductible from the value of supply even without a prior agreement or invoice-level linkage, and suppliers can issue credit notes accordingly. However, recipients must reverse corresponding ITC through the Invoice Management System (IMS) once a credit note is issued, making buyer-side reconciliation critical.
3. Export Refund & Liquidity Reforms
Provisional refunds up to 90% are now allowed for inverted duty structure claims on a risk-based basis, reducing working capital blockage. Additionally, the earlier ₹1,000 threshold for export refunds has been removed, benefiting small exporters using courier or postal channels relevant for Bihar’s emerging small exporters.
4. New Appellate Mechanism
Pending constitution of the National Appellate Authority (NAA), Section 101A allows the Government to empower an existing authority or tribunal to hear appeals under Section 101B, avoiding delays in the appellate process. This ensures continuity in dispute resolution across states.
5. Compliance and Procedural Updates
From 1 April 2026, e-invoicing became mandatory for GSTINs with aggregate annual turnover exceeding ₹5 crore, and LUT filing for FY 2026-27 must precede export invoices. These steps strengthen digital compliance for MSMEs, including in Bihar.
