Punjab’s Legislative Assembly on Monday passed the Punjab Goods and Services Tax (PGST) Amendment Bill, 2026, giving businesses wider access to provisional tax refunds, removing the ₹1,000 floor on IGST export refunds and easing rules governing post-sale discounts.
The biggest relief is for taxpayers facing an inverted duty structure, where tax paid on inputs is higher than tax charged on the final product. The amendment extends the 90% provisional refund of Input Tax Credit (ITC) to such cases, allowing eligible businesses to access most of their refund before completion of the full verification process.
Exporters will also be able to claim IGST refunds below ₹1,000. The earlier minimum threshold had prevented claims below that amount from being refunded.
The Bill also changes the rules for post-sale discounts. A supplier can now issue a credit note for such a discount without a prior agreement with the recipient. Credit notes will also be permitted where discounts are given for any commercial reason.
The change removes a procedural condition that could complicate the treatment of discounts agreed after a sale and potentially lead to disputes over the value of taxable supplies.
Finance and Excise & Taxation Minister Harpal Singh Cheema, who moved the Bill, said the amendments were intended to remove procedural bottlenecks and make GST compliance less burdensome for trade and industry.
“The proposed amendments to the PGST provisions are designed to fundamentally support our trade and industry sectors by removing procedural bottlenecks, improving liquidity, and easing the overall compliance burden on taxpayers,” Cheema said.
For Punjab, the immediate economic effect of the changes is expected to come through better cash flow for eligible businesses and exporters, while simpler procedures could reduce the number of GST-related disputes requiring departmental or legal intervention.
Cheema said the measures would provide financial relief to exporters and other taxpayers by improving working-capital availability.
“These carefully crafted changes are expected to significantly improve working capital liquidity and deliver much-needed financial relief to exporters and various other taxpayers throughout Punjab,” he said.
The amendments are part of the state’s effort to promote voluntary GST compliance while making tax procedures less cumbersome for businesses.
