Government notifies GST Settlement of Fund Rules, 2026

The Ministry of Finance (Department of Revenue) has introduced the Goods and Services Tax (GST) Settlement of Funds Rules, 2026. These new rules will be considered to be applicable from April 1, 2025, and replace the old 2017 rules.

The main purpose of these rules is to ensure smooth and clear settlement of GST funds between the Central Government and State Governments. Since the GST is collected in different forms like Central Tax, State Tax, and Integrated Tax, proper distribution is very important.

The rules define key terms such as “Authorities,” “input tax credit“, and “registered person”. They also explain the “cross-utilisation of credit“, through which the Credit of Integrated tax can be used for the payment of Central Tax, State Tax or Union Territory Tax. Also, the credit of Central Tax, State Tax or Union Territory Tax can be utilised for the payment of Integrated Tax.

A main feature of these rules is the electronic transmission of reports. The GST portal will automatically send reports to the authorities by the 25th of every month. If this date falls on a holiday, reports will be sent on the next working day. Also, if return filing dates are extended, report generation will be extended accordingly.

Refer to the official notification for more information.