CHENNAI: The State Government has brought three key amendments to the State Goods and Services Tax (SGST) Act into force from November 1, easing tax compliance for businesses offering post-sale discounts and giving eligible manufacturers and exporters greater access to provisional refunds.

The Commercial Taxes and Registration Department issued a Gazette notification on October 27, appointing November 1 as the effective date for Sections 2, 3 and 4 of the Tamil Nadu Goods and Services Tax (Second Amendment) Act, 2026.

The amendments revise Sections 15, 34 and 54 of the Tamil Nadu GST Act, 2017.

Under the amended Section 15, suppliers can exclude post-supply discounts from taxable value by issuing credit notes, provided recipients reverse the input tax credit (ITC) attributable to the discounts. The change removes the earlier requirement for discounts to be covered by an agreement entered into before or at the time of supply and linked to specific invoices.

A corresponding amendment to Section 34 formally recognises such discounts as grounds for issuing credit notes, providing statutory clarity for post-sale price adjustments.

The amendment to Section 54 extends the 90 per cent provisional refund facility to eligible unutilised ITC arising from an inverted duty structure, subject to prescribed conditions. It also removes the Rs 1,000 minimum threshold for refund claims relating to goods exported outside India with payment of tax.

A senior official of the Commercial Taxes department said, "The new GST rules, which came into effect on November 1, are expected to make tax procedures easier for businesses. For instance, if a company gives a customer a discount after selling a product, it can now reduce the GST payable on that sale by issuing a credit note. However, the customer must return the tax benefit claimed on the discounted amount."

"Also, businesses that pay more GST on the raw materials they buy than they collect on the products they sell can get up to 90 per cent of their eligible refund in advance. The government has also removed the minimum Rs 1,000 limit for claiming refunds on goods exported after paying GST. These changes could help businesses, especially in the textile sectors in Tiruppur, Karur and automobile component manufacturers in Chennai, by improving cash flow and reducing the money locked up in taxes," the official explained to DT Next.