GST Council scraps arrest powers, raises prosecution threshold to ₹5 crore

The GST Council has recommended removing the power of GST officers to arrest individuals under the GST law and raising the threshold for prosecution from ₹1 crore to ₹5 crore, the Press Information Bureau said in its release on the 57th Council meeting held in New Delhi on 8 October 2026. The general penalty under the law is recommended to come down from ₹25,000 to ₹10,000.

The meeting, chaired by Union Finance Minister Nirmala Sitharaman, left tax rates unchanged and focused on process and enforcement reforms. Sitharaman said the changes are expected to take effect from 1 April 2027, and that GST rate matters will in future be taken up once a year at a dedicated meeting, The Economic Times reported.

Other recommendations include simplified GST registration for small sellers on e-commerce platforms, common standards for GST notices and proceedings, intelligence-based interception of goods, and an in-principle optional scheme for small consumer-facing businesses with turnover up to ₹5 crore.

Sitharaman said the process reforms were driven by the principle of trust, telling reporters that 99% of GST rate and process issues had been addressed, though the door remained open to further reforms, The Hindu reported.