GST refund and ITC reforms could free up ₹25,000–60,000 crore, say experts

Proposed changes to the GST refund mechanism and input tax credit framework could ease working capital pressures for Indian businesses, but estimates of the potential gains vary widely, ETCFO reported. Nexdigm estimates the expanded credit and refund framework could release ₹50,000–60,000 crore in annual liquidity once it matures, while Trackase puts the working capital released by faster refunds alone at around ₹25,000–30,000 crore.

The reforms, recommended at the 57th GST Council meeting on 8 October 2026, seek to speed up processing of eligible refund claims and widen the scope of input tax credit available for refunds. Exporters, manufacturers and businesses under an inverted duty structure stand to benefit most from faster access to funds currently locked in accumulated credits.

The two estimates are not directly comparable: Nexdigm's projection covers the broader impact of expanded credit and refund provisions, while Trackase's calculation focuses only on the working capital released when eligible refunds are paid faster. Neither figure is an official government estimate.

Separately, the Press Information Bureau's GST backgrounder puts the registered taxpayer base at about 1.70 crore as of September 2026, with gross GST collections of around ₹12.46 lakh crore in April–September 2026, up 11.6% year on year.