GST WEEKLY UPDATE :25/2026-27 (20.09.2026) By CA Vipul Khandhar

1. GST Council to focus on process reforms at upcoming 7^th October meeting;:

2. Technical Advisory: Upgrading to emSigner Version 3.3 for GST Portal Compatibility:

Executive Overview

This advisory serves as advance notice to all taxpayers, tax professionals, and tax officers utilizing Digital Signature Certificates (DSC) on the GST Portal.

To maintain compliance with revised national cryptographic standards, a new version of the emSigner utility (v3.3) is being released for download. This update ensures seamless compatibility with hardware tokens (USB dongles) issued on or after September 21, 2026.

2. Regulatory Background (FIPS 140-3 Migration)

The rollout of emSigner v3.3 aligns with guidelines issued by the Office of Controller of Certifying Authorities (CCA) regarding the transition from FIPS 140-2 to FIPS 140-3 cryptographic modules.

Key regulatory highlights from the CCA Migration Advisory include:

• Sunset of FIPS 140-2: Certifying Authorities (CAs) are mandated to stop issuing DSCs stored on FIPS 140-2 tokens starting September 21, 2026.
• Validity of Existing DSCs: DSCs issued and downloaded onto FIPS 140-2 tokens on or before September 21, 2026, remain valid until their natural expiration date.
• Mandatory FIPS 140-3 Usage: Any fresh DSC issuance or renewal taking place on or after September 21, 2026, must use FIPS 140-3 validated USB tokens (except for authorized government exemptions extending up to September 21, 2029).
• One-time Reissuance Exception: If an active DSC downloaded before September 21, 2026, requires reissuance due to technical issues, CAs may re-issue it on a FIPS 140-2 token for the remaining validity period at no extra charge.

3. User Operational Guidelines

Category A: Users with Existing Valid DSCs (Issued On or Before Sep 20, 2026)

• Action Required: None.
• Existing USB dongles and valid certificates will continue to function normally after September 21, 2026.
• Troubleshooting: If you experience signing errors or your certificate fails to appear in the selection dialog ( despite proper driver installation), upgrade to emSigner v3.3. Version 3.3 is backward-compatible with older tokens.

 Category B: Users with Newly Issued / Renewed Tokens (On or After Sep 21, 2026)

• Action Required: Upgrade to emSigner v3.3.
• Older versions of emSigner will not recognize or interface with the new FIPS 140-3 compliant USB dongles.

4. Minimum System & Software Requirements

Before deploying emSigner v3.3, verify that your machine meets the specified setup prerequisites:

Hardware & Operating System

Java Runtime Environment

Supported Web Browsers

• Google Chrome: Version 16.0 and above
• Mozilla Firefox: Version 6.0 and above
• Microsoft Edge: All versions
• Apple Safari: Version 6.0 and above
• Opera: Version 12.1 and above
• Internet Explorer: Version 10.0 and above

5. Installation Instructions

1. Download emSigner v3.3 directly from the official GST Portal:

https://www.gst.gov.in/help/docsigner

1. Run the installer on a system meeting the hardware and Java runtime prerequisites.
2. Plug in your USB token and restart your web browser before initiating signing operations on the GST Portal.

3. Important Judgements:

(i) Gujarat HC extends Ford India interim relief, cites cryptic ‘discrepancy’ remark on reconciling voluminous invoices & EWBs:[2026] 180 Taxmann.com 452 (Gujarat):HIGH COURT OF GUJARAT: Ford India Private Limited v. Union of India & Anr. R/SPECIAL CIVIL APPLICATION NO. 1344 OF 2026

Section 74, read with Section 61 and Section 155, of the Central Goods and Services Tax Act, 2017 / Gujarat Goods and Services Tax Act, 2017 – Demand and Recovery – Suppression of facts / Intent to evade tax – Audit reconciliation vs. Extended period of limitation

Held: The High Court issued Rule in the petitions and observed that while examining over 2,000 invoice entries for FY 2018-19, the adjudicating authority itself recorded difficulty in identifying which specific invoices were affected and how alleged discrepancies were reconciled, offering only cryptic remarks without calling for further clarification from the assessee. Considering the immense volume and complexity of the transactions, the Court held that the issues required detailed examination. Prima facie, the material on record did not establish any deliberate suppression or intention to evade GST required to invoke Section 74. Consequently, while holding that initial audit action was justified, the High Court directed the continuation of ad-interim relief granted to the petitioner pending final disposal.

Court’s Observations & Order

1. Failure to Analyze Voluminous Records: The High Court highlighted that the adjudicating authority, while dealing with over 2,000 sample entries out of 4.5 lakh e-way bills and 2.5 lakh invoices, made cryptic remarks regarding “discrepancies” due to its own difficulty in identifying affected invoices, rather than asking the assessee to submit targeted clarifications.
2. Absence of Prima Facie Intent to Evade: Merely pointing out data mismatches between EWB portals and filed returns across massive datasets does not automatically translate to “suppression” or “fraud” under Section 74 without concrete evidence of tax evasion.
3. Interim Protection Extended: Recognizing the complexity and volume of transactions, the Court directed that the ad-interim protection granted to Ford India on February 5, 2026, shall continue until final disposal of the Special Civil Application.

(ii) Refund to be paid in cash and not re-credited to the Electronic Credit Ledger where business is permanently closed and GST registration surrendered. [2026] 180 Taxmann.com 820 (Allahabad) :HIGH COURT OF JUDICATURE AT ALLAHABAD (LUCKNOW BENCH): Vossloh Cogifer Turnouts India Pvt. Ltd. v. State of U.P. and Another:WRIT TAX NO. 1014 OF 2026

Section 54, read with Section 49, of the Central Goods and Services Tax Act, 2017 / Uttar Pradesh Goods and Services Tax Act, 2017 – Refund – Sanctioned refund – Cash disbursement vs. Re-credit to Electronic Credit Ledger – Permanent closure of business and surrender of GST registration

Held: The High Court allowed the writ petition and directed the Revenue to disburse the sanctioned refund of ₹1,10,72,753/- in cash / directly into the bank account of the assessee, along with applicable statutory interest, within a period of eight weeks from the date of order. The Court observed that:

• 1. Non-functionality of ECrL: Where an assessee has permanently closed its business and surrendered its GST registration, the Electronic Credit Ledger (ECrL) ceases to be functional.
  2. Lack of Practical or Legal Utility: Re-crediting a sanctioned refund as ITC into a non-operational ledger serves no practical, commercial, or legal purpose, as the assessee cannot utilize the credit for future output tax liabilities.
  3. Absence of Statutory Bar: There is no statutory prohibition or express bar under the GST law against disbursing such sanctioned refund amounts in cash or through bank transfer under such exceptional circumstances.

Key Rulings & Statutory Interpretations

1. Functional Reality of ECrL: Re-crediting ITC into the ECrL is predicated on the operational status of the taxpayer. Once GST registration is surrendered following business closure, the ledger becomes defunct for all practical tax-paying purposes.
2. Implied Right to Cash Refund: Insisting on re-crediting money to a cancelled GST registration’s credit ledger effectively deprives the taxpayer of a legally sanctioned refund, rendering the refund order illusory.
3. Interest Entitlement: The direction includes statutory interest under Section 56 for delayed payment beyond the prescribed timeline.

 (iii) HC: Section-16(2)(c) constitutional challenge, reading down plea ‘water under the bridge’ after Bhandari Scraps judgment :[2026] 180 Taxmann.com 512 (Rajasthan):HIGH COURT OF RAJASTHAN (JAIPUR BENCH):Sumetco Alloys Private Limited:v.:Union of India & Ors.

Section 16(2)(c), read with Section 16(1), Section 41, and Section 74, of the Central Goods and Services Tax Act, 2017 / Rajasthan Goods and Services Tax Act, 2017 – Input Tax Credit – Eligibility and Conditions – Actual payment of tax by supplier – Constitutional validity & Plea for reading down

Held: The High Court dismissed the writ petition and upheld the constitutional validity of Section 16(2)(c), holding that the issue is no longer res integra (“water under the bridge”) following the Supreme Court’s ruling in Bhandari Scrap Traders, which affirmed the Gujarat High Court’s judgment in Maruti Enterprise. The Court held that:

• 1. Legislative Policy: Shifting the commercial risk of a supplier’s tax default onto the recipient is a deliberate matter of legislative policy and does not render the provision arbitrary or unconstitutional under Article 14.
  2. Statutory Concession: ITC is a conditional statutory benefit, not a vested or constitutional right. Section 16(1) subjects ITC to prescribed statutory conditions, while the non-obstante clause in Section 16(2) mandates cumulative satisfaction of all conditions, including Section 16(2)(c).
  3. Sufficient Statutory Safeguard: Denial/reversal of ITC is not confiscatory or permanent. Under Section 41 (read with Sections 73 and 74), a recipient who reverses credit due to a supplier’s default can re-avail the credit as soon as the supplier subsequently discharges the tax liability.
  4. Rejection of Reading Down: The Supreme Court in Bhandari Scrap Traders declined to read down Section 16(2)(c). Furthermore, any equitable protection recognized in earlier decisions applies strictly to genuine, bona fide transactions, whereas the present case involved allegations of collusive, multi-layered paper transactions without actual movement of goods.
  5. Validity of Section 74 Proceedings: The SCN contained specific, detailed allegations of fraud and suppression. The Court rejected the natural justice challenge and cautioned against using writ petitions to stall statutory adjudication.

 (iv) Meghalaya Government Strengthens GST Taxpayer Facilitation: E-Filing Assistance, Online Grievance Tracking and Real-Time Resolution Dashboard Introduced: GOVERNMENT OF MEGHALAYA: NOTIFICATION NO. ERTS(T)70/2024/21(SEPTEMBER 7, 2026)

Meghalaya Goods and Services Tax Act, 2017 – Taxpayer Facilitation – E-Filing Assistance, Grievance Capture & Real-Time Resolution Dashboard – Partial Modification of Order No. CTAS-18/2017 Pt.II/458 and Notification No. ERTS(T)70/2024/12

• Key Features:
  1. E-Filing Support: Designated Facilitation Centres and the State GST Helpline are explicitly mandated to assist taxpayers in the e-filing of GST returns under the Meghalaya Goods and Services Tax Act.
  2. Online Grievance Mechanism: All grievances arising during the e-filing process will be formally captured via the State GST Portal ([https://meggst.gov.in/default.htm](https://meggst.gov.in/default.htm)).
  3. Real-Time Resolution Dashboard: A real-time tracking dashboard showcasing the status and resolution of return-filing grievances will be published on the official Taxation Department website for public transparency.
  4. Enforcement: The notification takes effect immediately from September 7, 2026, while retaining all un-modified terms of the previous 2021 order and 2024 notification.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.