RBI Grade B Current Affairs — 10 October 2026

The 57th GST Council met on October 8, 2026, in New Delhi, chaired by the Union Finance Minister. It recommended applying the Reverse Charge Mechanism and a 2% Tax Deducted at Source to specified categories of waste and scrap. These measures aim to curb tax evasion in the unorganised recycling and scrap trade sector, where suppliers often operate outside the formal GST framework, making buyer-side tax compliance an effective enforcement tool.

The Reverse Charge Mechanism (RCM) under GST flips the usual tax liability: instead of the supplier paying tax to the government, the registered buyer pays it directly. This is deliberately applied to sectors where suppliers are typically small, unregistered, or informal — as is common in the scrap and waste recycling trade. By making the buyer liable, the government ensures tax is actually collected, since large registered buyers are easier to audit and monitor than hundreds of small scrap dealers.

The additional 2% TDS (Tax Deducted at Source) under GST (Section 51 of the CGST Act) means that specified buyers must deduct 2% of the taxable value at the time of payment and deposit it with the government. This creates a paper trail that helps tax authorities cross-verify transactions and detect suppressed turnover.

Together, RCM and TDS function as twin compliance enforcement tools for hard-to-tax informal sectors. Their extension to waste and scrap signals the government's intent to bring the recycling economy — a significant part of India's circular economy ambitions — under formal GST oversight.

For exam purposes, aspirants must understand that RCM is governed by Section 9(3) and 9(4) of the CGST Act, while GST-TDS is governed by Section 51. The GST Council is a constitutional body under Article 279A of the Indian Constitution.

The 57th GST Council met on October 8, 2026, in New Delhi, chaired by the Union Finance Minister. Key decisions include allowing self-certification for Research and Development services to claim GST exemptions, granting GST exemption to foreign shipping lines operating in India, and providing clarification on transfer pricing norms for fund transfers between bank branches. These recommendations aim to reduce compliance burden and resolve long-standing ambiguities in indirect tax treatment across sectors.

The 57th GST Council meeting produced three substantively distinct policy signals worth understanding for exam purposes.

**Self-certification for R&D services:** Previously, entities claiming GST exemption on R&D services needed third-party or departmental certification. Allowing self-certification reduces procedural friction, encourages domestic R&D spending, and aligns with India's broader push under the National Research Foundation to incentivise private-sector innovation. For exams, the key concept is that GST exemptions on R&D services exist, and the compliance pathway has been simplified.

**Exemption for foreign shipping lines:** Foreign shipping companies providing services in India were caught in a jurisdictional grey zone — taxed as importers of services but unable to claim input tax credits efficiently. The exemption removes this asymmetry and aligns India's treatment of international shipping with global trade norms, directly relevant to India's trade competitiveness and WTO-compatible policy design.

**Bank fund transfer pricing clarity:** When a bank moves funds between its own branches (for example, from a treasury to a lending branch), the internal price set for this transfer was generating GST disputes. The Council's clarification settles whether such intra-entity transfers constitute a 'supply' under GST. This matters for RBI aspirants because it touches the intersection of monetary operations and indirect tax — transfer pricing within banks affects credit cost measurement and asset-liability management.

Collectively, these decisions illustrate how the GST Council functions as India's cooperative fiscal federalism body — Union and states jointly resolving tax design ambiguities.