Your Money, Stuck in GST: How the 57th Council Plans to Unlock Refunds in 3 Working Days

The 57th GST Council proposed faster GST refunds, with 90% released in 3 working days. See who benefits, key dates and how to prepare.

Sneha Das

10/17/20264 min read

From Burrabazar traders to Salt Lake exporters, many Kolkata businesses share one quiet problem: money that belongs to them, sitting with the GST department for weeks or months. A pending refund is not just a delay. It is the salary, the raw material and the next order you cannot pay for.

On 8 October 2026, the 57th GST Council recommended a big change in how refunds work. Here is what was proposed, who benefits, what is still not law, and how to get ready.

What the 57th GST Council recommended on refunds

The Council focused on process reform this time, and refunds were a major part of it. The key proposals are:

Acknowledgement in 10 days, not 15. The time to issue an acknowledgement or deficiency memo for a refund claim is proposed to drop from 15 days to 10. If the department misses it, the application is treated as acknowledged.
90% released quickly. After an automated risk check, 90% of the eligible amount is to be sanctioned provisionally, with the order proposed within 3 working days of acknowledgement instead of the current 7.
More ITC becomes refundable. Accumulated ITC on input services and capital goods is proposed to be included in inverted duty structure refunds, and capital goods ITC for zero-rated supplies.
Simpler calculation and thresholds. The 1.5-times domestic value restriction under Rule 89(4)(C) is proposed to be removed, and the ₹1,000 minimum refund limit would apply to the combined amount across tax heads.

Who benefits most

Exporters

If you export goods or services, your refund is often your biggest working capital item. Faster provisional release and simpler rules should shorten the wait. The Council also recommended clarity that services supplied by an Indian company to a foreign client through its overseas branch can qualify as exports.

Businesses with an inverted duty structure

If you pay a higher GST rate on inputs than you charge on your finished goods, credit piles up in your ledger. The proposal extends refund eligibility to input services as well, which is a big deal for manufacturers whose service costs, such as freight, job work and rent, were left out earlier.

Small businesses with excess balances

The lower minimum threshold calculation helps businesses with small claims spread across CGST, SGST or IGST heads.

Dates to mark, and why they are not final

These are recommendations. They become binding only after the CGST Act is amended and the government issues notifications. Until then, refund claims continue under the current law.

Also remember that faster processing is not the same as being eligible. Automation speeds up the system, but your claim still has to be correct and documented.

How to prepare your business now?

List your refund type. Is it export without tax payment, export with tax payment, inverted duty or excess balance in the cash ledger?
Track new ITC separately. Keep input service credit availed after 1 November 2026, and capital goods credit from 1 April 2027, in separate books so you can claim the right amount later.
Reconcile GSTR-2B with your books. Mismatches are the most common reason for refund deficiency memos.
Keep export proofs ready. Shipping bills, bank realisation certificates and invoices must match your returns.
Watch the time limit. A refund claim generally has to be filed within two years from the relevant date.
Clear idle cash ledger balances. Review whether excess cash can be claimed back or adjusted.
Respond to deficiency memos quickly. A fresh application restarts the clock.

Common reasons refunds get stuck

Mismatch between GSTR-1, GSTR-3B and GSTR-2B.
Missing or incorrect shipping bill and invoice details.
Wrong refund category selected on the portal.
Pending notices, demands or blocked credit on the GSTIN.
Bank account details that are not validated.

Fixing these now will help you whether or not the new rules arrive on time.

Frequently asked questions

Q1. Are GST refunds really going to take only 3 working days?

A: That is the proposal for 90% of the eligible amount, after acknowledgement and an automated risk check. It is not yet in force, and the remaining 10% and complex cases may take longer.

Q2. Can I claim refund of ITC on input services right now?

A: Under the proposal, only for inverted duty cases and only for ITC availed on or after 1 November 2026, once the law is amended. Until it is notified, the current rules apply.

Q3. What is the time limit for filing a GST refund?

A: Generally two years from the relevant date, which depends on the type of refund.

Q4. Does automation mean no scrutiny?

A: No. Risky cases can still be examined, so accurate returns and documents remain essential.

Conclusion

The 57th Council has promised faster, more automated refunds, and that is good news for exporters and manufacturers short of working capital. But a recommendation is not a refund in your bank account. Clean books, matching returns and proper documents are what will let you take full advantage the day the new rules go live.

This article is for general information and is not legal or tax advice. Confirm current rules and notifications before filing.

Have a GST refund stuck or want to file one correctly?

The Filing4u team in Kolkata helps exporters and MSMEs with GST refunds, returns and compliance.