IGST Revenue Settlement 2026: New Rules Clarify ITC Reversals and Credit Alignment
The Government has introduced new rules and SOPs to streamline IGST revenue settlement and address ITC reversal irregularities.Summary
The Government has implemented significant measures to strengthen the apportionment and settlement of Integrated Goods and Services Tax (IGST) revenue between the Centre and the States. Following recommendations from a Committee of Officers, the government has introduced the Goods and Services Tax Settlement of Fund Rules, 2026, to address operational discrepancies, delays, and anomalies in the settlement process.
Key reforms include the rollout of a Standard Operating Procedure (SOP) to manage abnormal Input Tax Credit (ITC) reversals and the alignment of ineligible and time-barred credit reporting with the GSTR-3B structure. Specifically, certain STL categories have been merged to ensure consistency in reporting. Additionally, the GST Rules are being updated to include specific section and rule numbers to reduce ambiguity in interpretation.
These systemic, procedural, and rule-based changes aim to create a more transparent and consistent framework for tax administrators and States. By refining the apportionment formula and clarifying existing rules, the government seeks to resolve practical problems in the distribution of GST revenue.
(Source：Sag Infotech Official Blog)