GST Exemptions from 1 November 2026: Isabgol Seeds Go Nil and Foreign Shipping Companies Get Relief

Short answer: From 1 November 2026, psyllium seeds (isabgol/isobgol) under tariff item 1211 90 13 are exempt from GST under new entry 87A, and services imported without consideration by an Indian establishment of a foreign shipping company are exempt under new entry 10M. Both changes arrive through notifications dated 27 October 2026.

Tomorrow is 1 November, and two quiet exemptions take effect that day. Neither made the headlines that the rate cuts did. Both matter a great deal to the people they touch: isabgol traders in Gujarat and Rajasthan, and the Indian offices of foreign shipping lines. I have read both notifications and the CBIC clarification that followed them, so this guide sticks to what the texts actually say — and flags the two places where a careless reading will cost you money.

What exactly changes on 1 November 2026?

Two notifications, dated 27 October 2026, both effective 1 November 2026:

Matching IGST and UTGST notifications for the psyllium entry were issued the same day, so the exemption works for inter-state and intra-state supplies alike. The shipping entry sits in the IGST exemption notification because an import of services is an inter-state supply. Both sets of changes follow the 57th GST Council meeting of 8 October 2026.

Isabgol seeds: why does entry 87A matter if fresh seeds were already exempt?

This is the question every trader should ask, because the answer explains the whole point of the amendment. Before 1 November, the exemption turned on a word: fresh. Entry 87 of the exemption notification already covered plants and parts of plants under heading 1211, fresh or chilled, used mainly in pharmacy. A Gujarat advance ruling confirmed that fresh, unprocessed isabgol seeds sold in their natural form, straight from the mandi without any drying or processing, were exempt under that entry.

Dried or frozen seeds were a different story. A CBIC FAQ from December 2017 put it plainly: fresh isabgol seeds attracted nil GST, dried or frozen isabgol seeds attracted 5%. So a trader's tax bill depended on winning an argument about whether his seeds counted as fresh. Every invoice carried that argument with it.

Entry 87A ends the argument for seeds under tariff item 1211 90 13. From 1 November, the item itself sits in the exemption schedule. You no longer need to prove freshness to claim nil GST on seeds that fall under that tariff item. That is the real change: not a new exemption out of nowhere, but a classification fight removed.

The husk trap: entry 87A does not cover isabgol husk

Here is where a careless reading costs money. Isabgol husk — the pale flakes separated from the seed, sold as a laxative and a food ingredient — is not the same goods as the seed. Husk powder has been discussed in rulings under a different tariff item, 1211 90 32, at 5%. Entry 87A names tariff item 1211 90 13 and the words "Psyllium seeds". It does not name husk or husk powder.

If you sell husk, do not read 87A as covering it. If you sell both seed and husk, your November invoices need two lines with two treatments, not one blended nil rate. Get the classification of each product confirmed against the tariff item before you change your rate master. A single wrong line is exactly how a nil-rated invoice becomes a short-payment notice later.

What exemption costs you: the ITC side of nil GST

Exempt is not the same as zero-rated, and the difference lands in your input tax credit. When your outward supply becomes exempt, the GST you paid on inputs used for that supply stops being creditable. Section 17(2) of the CGST Act restricts credit to taxable supplies, and Rules 42 and 43 give the apportionment maths for businesses that make both taxable and exempt supplies.

Three consequences follow for a mixed trader. First, work out the ITC reversal on common inputs — rent, packing, transport, software — that serve both your exempt seed sales and any taxable line you still run. Second, show the seed sales as exempt outward supplies in your return; they do not vanish from the return just because no tax is charged. Third, remember that exempt turnover still counts toward aggregate turnover for registration. A trader who sells only exempt goods is outside registration under section 23(1)(a), but a trader who mixes exempt seed sales with taxable goods cannot ignore the exempt turnover when testing the threshold.

A worked example: the ₹1,00,000 seed bill, before and after

Take a trader in Unjha selling dried isabgol seeds to a pharmaceutical processor. On 31 October, a ₹1,00,000 bill carried 5% GST — ₹5,000 — and the processor claimed that ₹5,000 as credit against its own output tax. On 1 November, the same bill carries nil GST. The trader collects ₹1,00,000, not ₹1,05,000.

Who gains? It depends on the buyer. A buyer who could use the credit — a registered processor — loses ₹5,000 of credit and gains ₹5,000 of lower price, so the deal is roughly neutral for them. A buyer who could not use the credit — an unregistered buyer, or a buyer making exempt supplies of their own — gains the full ₹5,000. This is a round-number illustration, not a promise: your result depends on your buyer's credit position, and that is a conversation worth having before you reprice, not after.

Shipping companies: the three-part test for entry 10M

The shipping exemption works differently. It is not about goods at all. It covers services imported by an Indian establishment of a foreign shipping company, and it passes only if all three parts hold:

• The recipient is an establishment in India of a foreign company that is a shipping company. "Foreign company" carries its Companies Act, 2013 meaning, section 2(42).
• The supplier is a related person, or another establishment of the same company outside India.
• The service is made without consideration — no charge, no fee, no debit note dressed up as something else.

Why did no-consideration services attract GST in the first place? Because GST law treats an Indian establishment and its overseas head office as separate persons. Think of them as neighbours, not one household: when the Singapore head office sends management, IT or crew-support services to its Mumbai branch free of charge, the law still saw a supply, because Schedule I to the CGST Act treats the import of services from a related person or an overseas establishment, in the course of business, as a supply even without consideration. Entry 10M switches that off for shipping companies from 1 November.

The past period: regularised "as is where is"

CBIC Circular No. 266/12/2026-GST, dated 28 October 2026, deals with the years before the exemption. It says GST payments on these shipping-company transactions for 1 July 2017 to 31 October 2026 are regularised on an "as is where is" basis. In plain terms, the past period is left as it stands rather than reopened: the circular is not an invitation to file refund claims for tax already paid, and it is not a fresh demand either. If your company paid GST on head-office services in that period, keep the records, but do not rework old returns on the strength of this circular alone.

What entry 10M does not cover

Read the entry narrowly. It does not exempt freight, shipping agency services, or port services charged to third parties. It does not cover services supplied for consideration — the moment a charge appears, the exemption falls away. It does not cover services from an unrelated overseas supplier, and it does not cover Indian shipping companies receiving services from their own overseas branches, because the recipient must be the Indian establishment of a foreign company. Maritime advisories have made the same point: this is a defined relief for intra-group, no-charge services, not a general shipping exemption.

The same notification also carries smaller entries worth knowing if you work near these sectors: helicopter passenger transport on a seat-share basis where the journey begins or ends at an airport in the specified North-Eastern States or at Bagdogra, services by the Seamen's Provident Fund Organisation, grants of exclusive toll-collection rights by specified government bodies, coffee curing services for cultivators, and a substituted warehousing entry covering cereals, pulses, fruits, vegetables and seeds meant for sowing.

Your 1 November checklist

For isabgol traders:

• Split your rate master: tariff item 1211 90 13 to nil from 1 November; husk lines stay as they are until you confirm their classification separately.
• Reprice November invoices and tell buyers in writing that the nil rate replaces 5% — and that their ITC on these purchases stops with it.
• Set up the ITC apportionment for common inputs before the November return, not while filing it.
• Keep the fresh-versus-dried papers anyway; October invoices are still judged under the old entries.

For shipping-company establishments:

• Map every no-consideration service you receive from related persons and overseas establishments, and test each against the three parts of entry 10M.
• Stop charging GST on qualifying imports from 1 November, and document the no-consideration basis for each service.
• Leave the 2017–2026 period as it stands, per Circular 266, and keep the payment records.
• Review any service that carries even a partial charge — partial consideration is still consideration.

5 mistakes to avoid

• Applying nil GST to isabgol husk on the strength of entry 87A, which names seeds only.
• Forgetting the ITC reversal when an exempt line grows inside a mixed business.
• Assuming exemption removes a mixed trader from registration — exempt turnover still counts toward aggregate turnover.
• Claiming entry 10M for services that carry a charge, however small or indirect.
• Reopening the 2017–2026 shipping period for refunds on the basis of a regularisation circular.

FAQs

Is isabgol fully GST-free from 1 November 2026?

Psyllium seeds under tariff item 1211 90 13 are exempt under entry 87A from 1 November 2026. Husk and husk powder under a different tariff item are not named in the entry, so do not assume they follow the seed.

Does the isabgol exemption apply to inter-state sales too?

Yes. Matching IGST and UTGST notifications were issued the same day, so an inter-state supply of seeds under tariff item 1211 90 13 is exempt in the same way as an intra-state one.

I sell only isabgol seeds. Do I still need GST registration?

A person engaged exclusively in supplying exempt goods is not liable to register under section 23(1)(a) of the CGST Act. If you also sell taxable goods, the exempt turnover still counts toward your aggregate turnover, so take advice on your combined position.

Does entry 10M cover freight charged to customers?

No. Entry 10M covers only services imported without consideration by an Indian establishment of a foreign shipping company from a related person or another overseas establishment. Freight and agency services charged to customers sit outside it.

Can a shipping company claim a refund of GST paid on head-office services before 1 November 2026?

Circular 266/12/2026-GST regularises that period on an "as is where is" basis. It leaves past payments as they stand; it is not framed as a refund route, so do not rework old returns on its strength alone.

If either exemption touches your business, the November invoice is the place to get it right. A trader who splits seed from husk, and a ship operator who documents the no-consideration basis, will both sail through the change. If you want help checking your own classification or your ITC apportionment, our GST registration and GST return filing teams work through exactly these questions, and the compliance fee calculator gives a quick sense of the filing cost. For the wider 1 November picture, read our GST rate list for 2026, the scrap RCM, TDS and registration changes, and the 1 November discounts and refunds guide.