No rate cuts, but big GST relief: 8 reforms on refunds, ITC, registration and enforcement
The Council also approved faster refunds and a reduced general penalty as it shifts GST enforcement toward system-driven detection and monetary recovery.
- On Thursday, October 8, 2026, the GST Council approved scrapping GST officers' arrest powers and raised the prosecution threshold from Rs 1 crore to Rs 5 crore, shifting enforcement toward civil recovery and penalties.
- These reforms, termed 'Phase-2 of GST 2.0,' address long-standing industry concerns about tax-authority overreach and harassment that have hindered ease of doing business since the regime's 2017 rollout.
- Union Finance Minister Nirmala Sitharaman stated that for offences below Rs 5 crore, authorities will prioritize civil recovery, interest, and penalties over custody, mirroring the Central Board of Direct Taxes' September shift.
- Implementation of these process reforms will begin April 1, 2027, including modernized export benefit definitions and streamlined e-commerce registration, while a Committee of Officers studies input tax credit protections within three months.
- Despite widespread support, Maharashtra, Gujarat, Uttar Pradesh, Karnataka, and Andhra Pradesh expressed concerns the regime could become "toothless," prompting extensive government outreach to ensure enforcement capabilities remain intact.
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GST Council Removes Tax Officers’ Arrest Power, Raises Prosecution Limit To Rs 5 Crore
A set of significant reforms has been agreed upon by the GST Council to facilitate compliance among businesses as well as reduce unnecessary legal and procedural pressure on taxpayers. As reported at its 57th meeting on October 8, Thursday, Union
GST Council scraps arrest powers, raises prosecution to Rs 5 cr
New Delhi: The GST Council on Thursday, October 8, approved scrapping the arrest powers of GST officers and raised the threshold to launch prosecution to Rs 5 crore from Rs 1 crore. “The rate structure is settled, so the Council has turned to how the tax works day to day,” the finance ministry said, adding … Get the latest updates in Hyderabad City News, Technology, Entertainment, Sports, Politics and Top Stories on WhatsApp & Telegram by subscr…
No rate cuts, but big GST relief: 8 reforms on refunds, ITC, registration and enforcement
The GST Council has approved a sweeping process overhaul, easing registration, speeding up refunds, widening input tax credit and reducing physical checks on goods in transit. The reforms also remove GST arrest powers, raise the prosecution threshold, simplify filing for smaller taxpayers and expand export benefits, while leaving tax rates unchanged.
GST Council scraps arrest power of tax officers, raises prosecution threshold to Rs 5 crore from 1 crore
On input tax credit claims, FM Sitharaman said the 57th GST Council decided to set up a Committee of Officers to examine how to protect a genuine buyer who holds a proper invoice, has received the goods, and has paid his supplier in full.
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