On Sunday, February 1, 2026, Finance Minister Nirmala Sitharaman presented the Union Budget for the Financial Year 2026-27 in the Lok Sabha.
This amendment is notable in the 2026 budget for its practical, litigation-reducing GST reforms, which simplify compliance while maintaining revenue safeguards. This makes it one of the most business-friendly GST changes introduced this year.
In clause 137 of the Financial Bill, 2026, the amendment proposed fundamentally shifts the compliance burden for after-sales discounts from a documentary-led model to a transaction-led one.
Within the old law, the need to link after-sales discounts to a particular agreement tied to invoices has been eliminated. The discount should be established under an agreement entered into at or before the time of supply. The discount should be associated with the related original invoices.
The updated norms ease the process by requiring that the discount be granted via a credit notice issued u/s 34, and the receiver should reverse the ITC attributable to the discount.
The focus now shifts from correlating invoices to ensuring proper documentation through credit notes and the reversal of ITC.
This amendment is significant as the Union Budget 2026 addresses one of the most litigated and challenging issues related to Goods and Services Tax (GST) valuation: the application of post-scale discounts under Section 15 of the Central Goods and Services Tax (CGST) Act.
The revision addresses the treatment of after-sale discounts, a field that has been a source of disputes between taxpayers and tax authorities since the inception of GST.
Beyond section 15, Clauses 138,139, and 140 of the Financial Bill 2026 propose amendments to the CGST Act to improve business liquidity and facilitate appellate processes.
The financial bill, 2026, rolled out taxpayer-friendly revisions to the Central Goods and Services Act (CGST). Such amendments are desired to decrease litigation, enhance business liquidity, and align GST compliance with modern commercial realities.
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