Union Budget 2026: Indirect Tax Analysis

Introduction

In this budget update we have highlighted the key changes made to the indirect tax regime inthe Union Budget presented by the Hon'ble Finance Minister on February 1, 2026. Various newproposals have been tabled. Apart from amending the current provisions of indirect tax laws,certain new provisions have also been introduced.

CGST – Key Changes

1. Value of taxable supply - Section 15(3) of the Central Goods and Services Tax Act, 2017 ("the CGST Act") is being amended to do away with the requirement of linking the post-sale discountwith an agreement. Now it provides for issuance of credit note by the supplier and reversal ofITC by the recipient as attributable to discount in accordance with the provision of Section 34 ofCGST Act.