The Central Government has issued a series of GST notifications dated October 27, 2026. They amend rate notifications under the CGST, IGST and UTGST frameworks, and they take effect from November 1, 2026.
The amendments apply from November 1, 2026. Businesses should review the revised provisions before that date.
The changes cover hotel accommodation, restaurant services, outdoor catering, electric vehicle transportation and rental, and certain delivery services. They also address reverse charge and operation and maintenance services supplied by concessionaires.
Input tax credit conditions
Notification No. 06/2026-Central Tax (Rate) amends Notification No. 11/2017-Central Tax (Rate), issued on June 28, 2017. The corresponding Notification No. 06/2026-Integrated Tax (Rate) amends the IGST rate notification. The changes limit ITC where a supplier buys services from another supplier in the same line of business.
Hotel accommodation
Where a supplier charges tax at a concessional rate, the credit on qualifying input services is subject to prescribed limits. The notification illustrates this with a hotel that procures accommodation for ₹10,000 and pays central tax of ₹900 at 9%.
The IGST provision uses a 5% limit in its illustration. Businesses should check the tax type and rate conditions that apply to their own transactions rather than assume one percentage applies everywhere.
Restaurant and outdoor catering
The amendments also revise ITC conditions for specified restaurant services. For outdoor catering, the law now sets a limit on ITC where the supplier charges tax above the applicable concessional rate.
In the notification's illustration, a caterer procures a service worth ₹60,000. The subcontracted caterer charges central tax at 9%, and the principal supplier charges 2.5%. The eligible ITC is limited to ₹1,500, not the ₹5,400 charged by the subcontractor.
Electric vehicle transportation and rental
New entries cover services using electrically operated vehicles where battery charging is included in the amount charged to the customer. These include passenger transportation, renting such vehicles for passengers, and renting them for goods transport.
The entries prescribe 2.5% under the Central Tax (Rate) notification and 5% under the Integrated Tax (Rate) notification, subject to the conditions in each entry. The notification defines an electrically operated vehicle as a road vehicle that runs solely on electrical energy from an external source or from batteries fitted to it. Electric bicycles are included.
In the notification's example, a passenger transport service priced at ₹1,000 uses a vehicle hired with an operator for ₹800, on which ₹72 of central tax is paid at 9%. If the supplier charges 2.5%, the eligible ITC is ₹20, which is 2.5% of ₹800.
Delivery services through e-commerce operators
The amended entries cover delivery services supplied through an electronic commerce operator, where the supplier is not liable for registration under Section 22(1) of the CGST Act, 2017. The rate is 2.5% under the Central Tax (Rate) notification and 5% under the Integrated Tax (Rate) notification.
ITC on goods and services used in supplying these delivery services cannot be taken. The reverse charge wording for delivery services has also been revised, so businesses should check their nature of service and registration status.
Reverse charge rate changes
- Notification No. 08/2026-Central Tax (Rate) changes the figure “6” to “9” against serial number 15 in Notification No. 13/2017-Central Tax (Rate). The UTGST notification makes the same change.
- Notification No. 08/2026-Integrated Tax (Rate) changes “12” to “18” against serial number 17 in Notification No. 10/2017-Integrated Tax (Rate).
Businesses covered by these entries should confirm the service category, then update tax calculations and accounting processes.
Businesses should check the tax type and rate conditions that apply to their own transactions rather than assume one percentage applies everywhere.
Operation and maintenance under concession agreements
Notification No. 10/2026-Union Territory Tax (Rate) covers concessionaires providing operation and maintenance services to a concessioning authority during the concession period. It applies to Toll-Operate-Transfer arrangements, where the concessionaire collects tolls on a road or highway and maintains the infrastructure.
Under the notification, registered persons must pay Union Territory tax on the amount charged or debited from the escrow account.
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