GST circulars 257 to 264, On 26 October 2026, the Central Board of Indirect Taxes and Customs (CBIC) issued eight GST circulars, numbered 257 to 264. They give effect to the recommendations of the 57th GST Council Meeting held on 8 October 2026, and they settle several questions that had been producing inconsistent practice in the field and a steady stream of litigation. Some of these circulars are procedural, but a few carry direct money impact: a clear route to ITC on demo vehicles for dealer-agents, relief for exporters on Rule 96(10), and a cleaner pre-deposit and refund position for appellants.

GST circulars 257 to 264 – At a glance

Circular No.	Subject	Who should read it
257/03/2026-GST	GST registration guidelines, document checklists and FAQs	New applicants, practitioners
258/04/2026-GST	Show cause notices, adjudication and appeal proceedings	Anyone facing a notice or demand
259/05/2026-GST	Pre-deposit for appeals, refund and interest	Appellants, litigation teams
260/06/2026-GST	Input Service Distributor (ISD) mechanism	Multi-branch businesses
261/07/2026-GST	50% ITC option under Section 17(4)	Banks, financial institutions, NBFCs
262/08/2026-GST	ITC on demo vehicles under the dealer-agency model	Automobile dealers and agents
263/09/2026-GST	Export proceeds: SNRR, Nostro, set-off, Rule 96B	Exporters of goods and services
264/10/2026-GST	Omission of Rule 96(10), retrospective from 23.10.2017	Exporters with pending refund disputes

1. Circular 257/03/2026-GST: Guidelines for GST registration

This circular lays down detailed guidelines for applicants and for officers processing registration applications. Its main purpose is to stop officers from asking for paperwork that the law does not require, by spelling out exactly which documents and information are needed. A checklist of information and documents sits in Annexure-II, and a list of documents accepted as proof of the principal place of business sits in Annexure-III. FAQs on who needs registration, threshold limits and how to apply are also included.

• Simplified registration under Rule 14A is available to small taxpayers who do not pass on ITC exceeding ₹2.5 lakh per month. It is granted automatically within three working days.
• Withdrawal from the simplified scheme is made in FORM GST REG-32, following the procedure for normal registration.
• Registration is deemed approved if the proper officer takes no action within the prescribed period.
• The circular also covers compliance for earlier suspended or cancelled registrations, portal-based communication, and grievances before jurisdictional senior authorities.

2. Circular 258/04/2026-GST: Show cause notices, adjudication and appeals

Issued under Section 168(1) of the CGST Act, this is the most far-reaching of the eight for anyone dealing with the department. It sets common standards for demand, adjudication and appeal proceedings so that practice is consistent across field formations.

• Pre-notice intimation: officers are encouraged to use FORM GST DRC-01A wherever feasible before issuing a notice.
• Better notices: a show cause notice must identify the material facts, the evidence, the legal grounds and a quantified demand.
• No mechanical fraud allegations: fraud, wilful misstatement or suppression cannot be invoked merely because tax is unpaid or scrutiny finds discrepancies. Supporting evidence and intent to evade must be disclosed, and fraudulent and non-fraudulent demands are to be identified separately.
• Hearings: a maximum of four personal hearing opportunities, virtual hearings encouraged, and the order preferably within one month of the hearing.
• Reasoned orders: each order must independently examine the reply filed in FORM GST DRC-06 and submissions made at the hearing. Quantification should be issue-wise and year-wise, ideally in tabular form, split across CGST, SGST, IGST and UTGST.
• AI tools: artificial intelligence may be used in adjudication only with human oversight and independent verification of the output.
• First appeals: the Appellate Authority must do a preliminary scrutiny under Rule 108, examine limitation separately and record reasons for accepting or rejecting a delayed appeal.

The circular also contains illustrative annexures. These are expressly non-exhaustive and must not be cited by officers in show cause notices or orders.

3. Circular 259/05/2026-GST: Pre-deposit for GST appeals

Varying interpretations of pre-deposit had caused confusion and litigation. This circular clarifies six issues under Section 107(6) and Section 112(8) of the CGST Act.

• Admitted liability must be paid in full. The pre-deposit is calculated only on the disputed tax.
• An appeal before the Appellate Authority needs a 10% pre-deposit of the disputed tax. An appeal before the Appellate Tribunal needs a further 10%, in addition to what was paid at the first appellate stage. The two stages are treated separately.
• The appellate order does not have to expressly direct a refund of the pre-deposit. The taxpayer files a refund application in FORM GST RFD-01 under the “on account of order” category.
• Refund of the pre-deposit cannot be denied merely because the department is contemplating a further appeal.
• If the Tribunal remands the matter to the original adjudicating authority, the pre-deposit is refundable within the prescribed time. In a partial remand, the confirmed demand is adjusted first and the balance is released.

The circular also deals with interest on refunded pre-deposits. Read the circular text for the exact interest start dates before computing a claim.

4. Circular 260/06/2026-GST: Input Service Distributor (ISD)

With ISD registration now the operative route for distributing credit on common third-party input services, field offices had been taking different views. This circular clarifies seven issues under Section 2(61), Section 20 and Rules 39 and 54(1A).

• There is no bar on multiple ISD registrations within a State or Union territory. Each registrant that receives invoices for common input services for or on behalf of distinct persons must take ISD registration where the credit needs distribution.
• Credit appearing in GSTR-6A becomes available for distribution once the ISD ascertains its prima facie eligibility, and it must be distributed in that month. Eligible and ineligible credit are identified separately and reported in GSTR-6.
• Credit goes only to the distinct persons to whom it is attributable. The recipients, not the ISD, are responsible for meeting the conditions of Sections 16 and 17 and for making reversals under Section 17(1), 17(2) or 17(4).
• A same-PAN, same-State person who pays tax under reverse charge and transfers the credit to the ISD through a Rule 54(1A) document does not make Section 17 reversals itself. It must transfer the entire RCM credit to the ISD for onward distribution.

The circular also addresses how credit transfers are treated for refund purposes.

5. Circular 261/07/2026-GST: 50% ITC option for banks and NBFCs

Section 17(4) lets a banking company or financial institution, including an NBFC, that supplies services by way of accepting deposits or extending loans and advances, avail 50% of the eligible ITC. Practices varied, and this circular fixes the method.

• Eligible ITC is determined first, excluding permanently ineligible credits such as those blocked under Section 17(5). Fifty per cent of the remainder may be availed and the balance is permanently reversed.
• The relaxation in the second proviso to Section 17(4) for supplies received from another registration under the same PAN applies only where the supplying registration has also opted for the Section 17(4) mechanism.
• The circular also covers how availment and reversal are reported in FORM GSTR-3B, building on Circular 170/02/2022-GST.

6. Circular 262/08/2026-GST: ITC on demo vehicles for dealer-agents

Circular 231/25/2024-GST had allowed ITC on demo vehicles to authorised dealers who buy and sell vehicles on their own account, but para 4.6 blocked it for agents who only facilitate sales on behalf of the manufacturer. Circular 262 withdraws para 4.6.

• Demo vehicles serve the same purpose in both business models: they promote the supply of similar vehicles. Denying ITC only because the manufacturer invoices the customer directly would create unequal treatment.
• The Board points to the wording of Section 17(5)(a)(A), which refers to further supply of such motor vehicles rather than the said vehicle. ITC is therefore permitted on vehicles used to supply similar vehicles, not just the specific vehicle sold.

This is a clear relief for automobile agents who were carrying blocked credit or facing notices on this ground.

7. Circular 263/09/2026-GST: Export proceeds, SNRR, Nostro and set-off

This circular clarifies what counts as receipt of payment for exports of goods and services when GST refunds are involved.

• Services: export proceeds received in INR through SNRR, Nostro or NRE accounts are recognised for the purpose of the export-of-services condition.
• Set-off: setting off export receivables against import payables is recognised, subject to RBI directions. The circular refers to the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, in force from 1 October 2026.
• Reinsurance brokers: commission received by Indian reinsurance brokers through the net retention mechanism qualifies as realisation of export proceeds.
• Goods and Rule 96B: the time limit for realisation follows the period, including any extension, prescribed under FEMA and the FED Master Direction No. 16/2015-16. Recovery of refund is not required where the authorised dealer bank has written off the realisation requirement, wholly or partly.

8. Circular 264/10/2026-GST: Rule 96(10) omission is retrospective

Rule 96(10) restricted IGST refund on exports where the exporter had used certain concessional or exempted inward supplies. It was omitted by Notification 20/2024-Central Tax dated 8 October 2024, and courts had differed on whether the omission applied to earlier periods.

Following the Supreme Court’s judgment of 6 August 2026 in Goodluck India Limited and Another v. Union of India and Others, the Board has clarified, under Section 168(1), that the omission is effective retrospectively from 23 October 2017, the date the rule came into effect. Tax authorities are directed to deal with pending Rule 96(10) proceedings in line with the Court’s ruling. The Supreme Court had held that, with no saving clause attached to the omission, it applies to all pending proceedings. The Board had already accepted that position in an Office Memorandum dated 24 August 2026.

GST circulars 257 to 264- Action checklist for taxpayers and professionals

• Update your registration onboarding checklist using Annexures II and III of Circular 257.
• Review every open show cause notice against the standards in Circular 258 and use them in your replies.
• Recompute pre-deposit positions and file RFD-01 refund claims where appeals have succeeded (Circular 259).
• Check ISD registrations and distribution timing for multi-branch clients (Circular 260).
• For banks and NBFCs, re-verify the Section 17(4) method and GSTR-3B reporting (Circular 261).
• Automobile agents should revisit blocked demo vehicle credit and pending notices (Circular 262).
• Exporters should check how their payments are received and settled, and review Rule 96B exposure (Circular 263).
• Identify all pending Rule 96(10) matters and respond with reference to Circular 264.

GST circulars 257 to 264- FAQs

How many GST circulars did CBIC issue on 26 October 2026?

Eight, numbered 257/03/2026-GST to 264/10/2026-GST.

Why were these circulars issued?

They implement recommendations of the 57th GST Council Meeting held on 8 October 2026, and in one case (Rule 96(10)) a Supreme Court ruling.

What is the pre-deposit for a GST appeal before the Tribunal?

According to Circular 259, a further 10% on top of the 10% paid at the first appellate stage, with admitted liability paid in full separately.

Can demo vehicle ITC be claimed under the dealer-agency model now?

Yes. Circular 262 withdraws para 4.6 of Circular 231/25/2024-GST and allows ITC for authorised agents.

From when does the omission of Rule 96(10) apply?

Circular 264 clarifies it is effective retrospectively from 23 October 2017.