GST Rules from 1 November 2026: Rate, Reverse Charge, ITC
New GST Rules from 1 November 2026: Rate Changes, Reverse Charge, EV Services and ITC Restrictions
CA Cult · Oct 31, 2026
On 27 October 2026, the Finance Ministry issued eight GST rate notifications (02/2026 to 09/2026, Central Tax (Rate)). All of them apply from 1 November 2026. Here is what changes, in plain language.
Key takeaways
- Goods rates: retreaded tractor tyres move to 5% GST. Other retreaded or used tyres stay at 18%. Pre-packaged, labelled organic fertilisers, including seaweed-extract bio-stimulants, are covered at 5%.
- Exemption: psyllium seeds (Isobgol) are added to the list of exempt goods.
- Reverse charge on goods: used cooking oil, plastic waste and scrap, tyre waste and scrap, and e-waste and scrap bought from unregistered sellers.
- ITC rules for hotels and caterers: ITC is allowed on same-line input services, with a cap at 2.5% central tax where the supplier charged more.
- Electric vehicles: passenger transport and vehicle renting where battery charging is included in the price are covered at 5% GST.
- Service exemptions: new or clarified exemptions for helicopter seat-share flights in the North East and Bagdogra, toll rights granted to government bodies, coffee curing, seed warehousing and Seamen’s Provident Fund services.
A note on rates: the notifications state central tax rates. With an equal State or UT tax, 2.5% central tax means 5% GST and 9% means 18% GST.
Quick reference
| Notification | Amends | Subject |
|---|---|---|
| 02/2026 | 9/2025 | Fertilisers; retreaded and used tyres |
| 03/2026 | 10/2025 | Psyllium seeds exemption |
| 04/2026 | 4/2017 | Reverse charge on goods |
| 05/2026 | 26/2018 | Definition of Nominated Agency |
| 06/2026 | 11/2017 | ITC conditions; EV services; delivery services; definitions |
| 07/2026 | 12/2017 | Service exemptions and definitions |
| 08/2026 | 13/2017 | Change of a figure in S.No. 15 |
| 09/2026 | 17/2017 | Delivery services through e-commerce operators |
Notifications 02 and 03: goods
| Goods | HS code | Central tax | GST (with equal State tax) |
|---|---|---|---|
| Pre-packaged and labelled animal, vegetable or organic fertilisers (S.No. 237) | n/a | 2.5% | 5% |
| Retreaded tractor tyres (new S.No. 272A) | 4012 | 2.5% | 5% |
| Retreaded or used pneumatic rubber tyres other than retreaded tractor tyres; solid or cushion tyres, tyre treads and tyre flaps of rubber (S.No. 138) | n/a | 9% | 18% |
| Psyllium seeds, Isobgul/Isobgol (new S.No. 87A) | 1211 90 13 | Exempt | Exempt |
Fertilisers. Notification 02/2026 rewrites the entry at S.No. 237 of the 2.5% schedule. It now reads “all goods i.e. animal or vegetable fertilisers or organic fertilisers pre-packaged and labelled”. An explanation says it includes seaweed-extract-based bio-stimulants registered under Schedule VI of the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985.
Tyres. The S.No. 138 entry in the 9% schedule is reworded to exclude retreaded tractor tyres, which get their own 2.5% entry at S.No. 272A. Other retreaded or used pneumatic tyres, and the solid and cushion tyres, treads and flaps in that entry, stay at 9%.
Psyllium seeds. Notification 03/2026 is issued under section 11 of the CGST Act, the power to exempt goods. It inserts psyllium seeds as S.No. 87A in the schedule of Notification 10/2025.
Notifications 04 and 05: reverse charge and Nominated Agency
Notification 04/2026: reverse charge on goods
Using its power under section 9(3) of the CGST Act, the Government adds four goods to the reverse charge table in Notification 4/2017. For each, the supplier is any unregistered person and the recipient is any registered person. The registered buyer pays the GST directly.
| New entry | HS code | Goods |
|---|---|---|
| 2A | 1518 | Used cooking oil |
| 3B | 3915 | Waste and scrap of plastics |
| 3C | 4004 | Waste and scrap of tyres |
| 9 (after S.No. 8) | 8549 | Electrical and electronics waste and scrap |
Notification 05/2026: Nominated Agency
In the Explanation to Notification 26/2018, clause (c) is replaced. “Nominated Agency” now means the entities listed in Appendix 4B of the DGFT Handbook of Procedures, as amended from time to time.
Notification 06/2026: ITC conditions for hotels, restaurants and caterers
Notification 06/2026 amends Notification 11/2017, which lists GST rates for services. Its first change is to the ITC conditions for five entries at S.No. 7. Each entry carries the condition that ITC on goods and services used in supplying the service is not taken. The substituted wording makes an exception for input services in the “same line of business”, meaning the same kind of service bought from another supplier.
| S.No. 7 item | Service | ITC still allowed on | Capped at 2.5% central tax? |
|---|---|---|---|
| (i) | Hotel accommodation | Hotel accommodation service bought from another hotel accommodation supplier | Yes |
| (ii) | Restaurant service other than at specified premises | Restaurant service bought from another restaurant service provider (other than at specified premises) | No cap stated |
| (iii) | Food, other articles for human consumption or drinks, supplied in trains or at platforms | Inputs and input services in the same line: food or drink procured from Indian Railways, IRCTC or their licensees | No cap stated |
| (iv) | Outdoor catering | Outdoor catering service bought from another outdoor caterer | Yes |
| (v) | Composite supply of outdoor catering with renting of premises other than specified premises | Outdoor catering service bought from another outdoor caterer | Yes |
How the cap works. Where the same-line supplier charges central tax above 2.5%, ITC on that input service is limited to the tax at 2.5% of its value. The excess cannot be taken.
Worked example: hotel accommodation
A books a hotel room from B for ₹7,000 per unit per day. B buys hotel accommodation from C for ₹10,000, and C charges central tax at 9% (₹900). B charges A central tax at 2.5%.
| Item | Amount |
|---|---|
| Central tax charged by C | ₹900 |
| ITC allowed to B (2.5% of ₹10,000) | ₹250 |
| ITC not allowed | ₹650 |
Worked example: outdoor catering with renting of premises
A engages B for a wedding function (outdoor catering with renting of premises other than specified premises) for ₹1,00,000. B engages caterer C for ₹60,000, and C charges central tax at 9% (₹5,400). B charges A central tax at 2.5% (₹2,500).
| Item | Amount |
|---|---|
| Central tax charged by C | ₹5,400 |
| ITC allowed to B (2.5% of ₹60,000) | ₹1,500 |
| ITC not allowed | ₹3,900 |
Notification 06/2026: electric vehicles, delivery services and definitions
Electric vehicle services at 2.5% central tax
Three new entries apply where the cost of battery charging is included in the price charged to the customer. At 2.5% central tax with an equal State tax, the GST is 5%.
| Entry | Service |
|---|---|
| S.No. 8, item (vib) | Transport of passengers by an electrically operated vehicle designed to carry passengers |
| S.No. 10, item (ib) | Renting of an electrically operated vehicle designed to carry passengers |
| S.No. 10, item (ic) | Renting of an electrically operated vehicle for transportation of goods |
ITC conditions (same for all three). ITC on goods and services used in supplying the service is not taken, except ITC on same-line input services. For (vib) and (ib), that means passenger transport in an electrically operated vehicle or renting of an electrically operated vehicle, bought from another provider. For (ic), it means transport of goods by an electrically operated vehicle or renting of one. Where that supplier charges central tax above 2.5%, ITC is limited to 2.5% of the value.
Example from the notification (passenger transport). A engages B for a passenger trip from New Delhi to Gaya in an electrically operated vehicle for ₹1,000. B hires an electrically operated vehicle with operator from C for ₹800, and C charges central tax at 9% (₹72). B charges A central tax at 2.5%. B can take ITC of ₹20 (2.5% of ₹800), not ₹72. The notification’s renting examples use the same figures.
Delivery services (S.No. 12, item iii)
This entry is replaced. It now covers delivery services, other than those in items (i) and (ii), that are either:
- supplied through an e-commerce operator by a person who is not liable for registration under section 22(1) of the CGST Act; or
- delivery services in relation to goods supplied through an e-commerce operator.
The rate is 2.5% central tax (5% GST), and ITC on goods and services used in supplying the delivery service is not taken.
Definitions
- Goods transport agency: any person who provides service in relation to transport of goods by road and issues a consignment note, by whatever name called.
- Electrically operated vehicle (new): a road vehicle that runs solely on electrical energy derived from an external source or from one or more electrical batteries fitted to the vehicle. It includes E-bicycles.
The notification also omits paragraph 3 of Notification 11/2017.
Notification 07/2026: service exemptions
Notification 07/2026 amends the services exemption notification, 12/2017.
| Entry | What changes | Treatment |
|---|---|---|
| S.No. 15, new item (aa) | Helicopter passenger transport on a seat-share basis, starting or ending at an airport or helipad in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim or Tripura, or at Bagdogra in West Bengal | Exempt |
| S.No. 18 | The explanation in column (3) is omitted | Entry text only |
| S.No. 21A | New explanation: the entry does not apply to goods transport agency services for goods supplied through an e-commerce operator | Clarification |
| S.No. 24B | Entry substituted: storage or warehousing of cereals, pulses, fruits, vegetables, and seeds meant for sowing | Exempt |
| New S.No. 31AA (Heading 9971 or 9991) | Services by the Seamen’s Provident Fund Organisation to persons governed by the Seamen’s Provident Fund Act, 1966 | Nil |
| New S.No. 42A (Heading 9973) | Grant of exclusive right of way or access, licence and authority to demand, collect and appropriate toll fee, by the Central Government, a State Government, a Union Territory, a local authority, a governmental authority or a government entity | Nil |
| New S.No. 54A (Heading 9986) | Curing of coffee supplied to coffee cultivators; “curing” has the meaning in section 3(d) of the Coffee Act, 1942 | Nil |
New and revised definitions
- Goods transport agency: the same revised definition as in Notification 06/2026 (road transport of goods, with a consignment note by whatever name called).
- Seed (new): any plant material used or intended for use in propagation or sowing, including seedlings, tubers, bulbs, rhizomes, roots, cuttings, all types of grafts, tissue culture plantlets and other vegetatively propagated material. It expressly includes seeds of cereals, coarse cereals, pulses, oilseeds, fibre crops, forage and fodder crops, green manures and sugar crops, seeds of fruits, vegetables, spices, flower, ornamental and plantation crops, and planting material.
Notifications 08 and 09: reverse charge on services and e-commerce delivery
Notification 08/2026
In the table of Notification 13/2017 (the notification listing services on which GST is payable under reverse charge), against S.No. 15, in column (3), the figure “6” is replaced by “9”. This is the only change the notification makes. To see where the figure appears, read S.No. 15 in the consolidated table of Notification 13/2017.
Notification 09/2026
This notification amends Notification 17/2017, issued under section 9(5) of the CGST Act, which lists services on which the e-commerce operator pays the tax. Clause (v) is replaced. It now covers delivery services, other than postal and courier services, except where the person supplying them through the e-commerce operator is liable for registration under section 22(1).
Read with Notification 06/2026, delivery services supplied through an e-commerce operator by suppliers not liable for registration are taxed at 2.5% central tax without ITC. Suppliers who are liable for registration fall outside this clause.
Action checklist before 1 November 2026
- Update HSN and rate masters for fertilisers, retreaded tyres and psyllium seeds.
- Set up reverse charge accounting for used cooking oil, plastic waste, tyre waste and e-waste purchased from unregistered sellers.
- Hotels, restaurants, caterers and railway food suppliers: review ITC on same-line inputs and apply the 2.5% cap where the entry provides it.
- EV operators and renters: confirm battery charging is included in your price, and review ITC conditions.
- E-commerce operators and delivery partners: re-check registration status and section 9(5) treatment.
- Check the corresponding IGST and UTGST notifications, which are separate from the Central Tax (Rate) notifications summarised here.
Also Read: CBIC Announces Major GST Relief: No Arrests, E-Way Bill Reforms & ₹10,000 SCN Limit
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