GST Changes from 1st April 2026: New Rules and Updates

GST changes from April 2026 involves some FY-start actions and substantive rule updates. Year start compliances such as LUT filing for FY 2026-27, e-invoice compliance and IMS obligations must not be ignored. Continue reading this article to know about the important GST amendments from 1st April 2026.

Key Takeaways

• File LUT for FY 2026-27 before generating any export invoice from 1st April 2026.
• The threshold limit of export refund of Rs. 1,000 is removed from the law. So, it allows all valid refund claims to be processed.
• Document series for all invoices, debit notes, and credit notes must be newly numbered from 1st April 2026.

Major GST Changes from 1st April 2026

1. LUT Filing for FY 2026-27

File a new Letter of Undertaking for FY26-27 if your enterprise is into exports goods or services, or supply to SEZ units without IGST payment. The LUT filed for FY25-26 expires on 31st March 2026 and will not apply for the new financial year.

File Form RFD-11 before raising your first export invoice this April. Miss this, and you will need to pay IGST on exports and claim a refund later. That delays cash flow and creates avoidable compliance work.

Login to the GST portal > Services tab > Refunds tab > Furnish Letter of Undertaking (LUT)

2. Export Refund Threshold Removed

The condition that refund applications below Rs. 1,000 would not be processed has been removed from 1st April 2026. Every valid export refund claim, regardless of amount, will now be processed. Small claims that were earlier ignored can now be filed and recovered.

3. Start a New Invoice Series for FY26-27

All enterprises must start a fresh document series from 1st April 2026 for invoices, debit notes, and credit notes. A common error that businesses commit is continuing the previous year's series. It creates reconciliation problems in GSTR-1 and can invite departmental scrutiny.

4. e-Invoice Compliance: Check Your Threshold

e-Invoicing becomes mandatory from 1st April 2026 if the aggregate annual turnover (AATO) of your GSTIN/branch/unit exceeds Rs. 5 crore in the financial year 2025-26. For taxpayers with AATO of Rs. 10 crore and above, the 30-day time limit for reporting e-invoices on the IRP portal applies from 1st April. Invoices reported after this window are invalid for ITC purposes.

5. ECRS: Do Not Let Balances Go Negative

The Electronic Credit Reversal and Reclaimed Statement (ECRS) on the GST portal tracks ITC reversals and subsequent reclaims. A negative closing balance currently triggers a warning. Going forward, it may block GST return filing entirely, much like the RCM ITC statement issue did. Update the ECRS with accurate document-level data now. Do not wait for it to become a filing block.

6. GTA Declarations Under Forward Charge

Goods Transport Agencies (GTAs) can opt to pay GST under the forward charge mechanism. If you receive services from a GTA that has exercised this option, obtain a written declaration from them for FY 2026-27. Without a valid declaration in place, the reverse charge liability shifts to you as the recipient.

7. Invoice Management System: Act on Credit Notes

Two IMS action points for FY26-27:

• When you report a credit note in GSTR-1, communicate with your customer immediately. A credit note rejected in IMS creates additional GSTR-3B liability for them, which affects your business relationship and the reconciliation cycle.
• Check all credit notes that your vendor has rejected up to date. Rejected vendor credit notes reduce your ITC and require corrective action.

8. GST Rule 14A: Withdrawal Condition Eases

Taxpayers registered under CGST Rule 14A (the simplified 3-working-day registration route for small suppliers with output tax liability below Rs. 2.5 lakh per month) will find it easier to exit the scheme from 1st April 2026.

• Before 1st April 2026: Minimum 3 months of filed returns required to apply for withdrawal via Form REG-32.
• From 1st April 2026: Filing returns for just 1 complete tax period is sufficient.

The withdrawal takes effect from the first day of the month following the month of approval.

Compliance Changes Beyond GST

1. New Income Tax Act, 2025

The Income Tax Act, 2025, replaces the Income Tax Act, 1961, from 1st April 2026. New income tax forms and rules are notified from the same date. These broader tax changes in 2026 make this one of the more significant year-end transitions in recent memory.

2. New TCS Rates from 1st April 2026

Several TCS rates are revised from 1st April 2026. Update your ERP before the first applicable transaction.

3. CCFS 2026

The Company Compliance Facilitation Scheme 2026 opens from 1st April 2026. Defaulting companies can file overdue ROC forms with reduced additional fees and get relief from prosecution. Defunct companies can obtain a concessional route for strike-off via Form STK-2, thereby protecting directors from disqualification.

4. Updated Return Penalty Rates

Penalty rates for filing updated income tax returns has changed from 1st April 2026. Also, one can no longer file the updated returns for FY20-21 (AY21-22). If you were planning to file an updated return for FY 21-22 or 22-23, the penalty cost has gone up. Hence, your team must file pending updated ITRs without further delay.