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The GST Council agreed to raise the prosecution threshold under Section 132 of the CGST Act from ₹1 crore to ₹2 crore for offences other than issuing fake invoices. The decision is recorded in the Council’s 49th-meeting minutes, but those minutes alone do not establish when a statutory amendment took effect. Check the operative Act and commencement notification before treating ₹2 crore as the current legal threshold.
What changed in the proposal
The GST Law Committee considered prosecution under Section 132 of the Central Goods and Services Tax Act, 2017, as part of a wider review of decriminalisation and compounding. Its recommendation was to delete the offence tier in Section 132(1)(iii), which covered tax evaded, input tax credit wrongly availed or utilised, or refund wrongly taken above ₹1 crore and up to ₹2 crore. The committee described this as raising the minimum threshold for prosecution from ₹1 crore to ₹2 crore. The recommendation appears in the GST Council’s 48th-meeting agenda note.
The committee cited field feedback that few prosecutions were filed in the ₹1–2 crore band, the sustained departmental effort required to take cases from investigation through court proceedings, and limited manpower in field formations. It argued that prosecution should focus on suitable cases with significant revenue implications.
What the GST Council decided
At its 49th meeting, the Council agreed to raise the threshold to ₹2 crore for all offences except the offence pertaining to issuance of fake invoices. Its record states: “The Council agreed with the recommendation of the Law Committee in agenda item 7(iii) with modification that the threshold for prosecution be increased to Rs 2 crore from Rs 1 crore for all offences, other than the offence pertaining to issuance of fake invoices.” The decision and discussion are in the GST Council’s 49th-meeting agenda volume.
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| Issue | Committee recommendation | Council decision |
|---|---|---|
| Prosecution threshold | Raise the threshold from ₹1 crore to ₹2 crore by removing the ₹1–2 crore offence tier. | Raise it to ₹2 crore for offences other than issuance of fake invoices. |
| Fake-invoice issuance | The committee recommendation described in the 48th-meeting agenda did not include the later Council exception. | Excluded from the increase; the Council retained the ₹1 crore threshold for this offence category. |
During deliberations, a Tamil Nadu representative cited 471 detected cases below ₹1 crore with a stated revenue implication of ₹222 crore, and said 241 cases would remain prosecutable at the higher threshold with a stated revenue implication of ₹350 crore. These were figures presented by that representative as part of the meeting discussion, not national totals or an independently validated dataset in the Council record.
Does the decision mean shorter jail terms?
Only in a limited sense. Under the proposal, the ₹1–2 crore tier carried imprisonment of up to one year. Removing that tier from the prosecution scheme would remove that specific punishment tier for offences covered by the higher threshold. It does not show that every GST sentence was reduced.
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The committee also recommended deleting the corresponding reference to clause (iii) in Section 132(3), which provided for a six-month minimum imprisonment absent special and adequate reasons recorded by the court. That drafting change related to the deleted offence tier; it should not be read as eliminating minimum jail terms for all GST offences.
Compounding was a separate recommendation
Separately, the committee proposed changing the Section 138 compounding range from 50–150% of the tax amount to 25–100%. It said the existing range could discourage taxpayers from seeking compounding and referred to field feedback that almost no one had applied for the benefit in GST’s first five years. This was a separate recommendation, not part of the prosecution-threshold decision. The operative compounding range also needs to be checked against the current law.
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The 48th-meeting agenda records what the Law Committee recommended; the 49th-meeting record documents the Council’s decision, including the fake-invoice exception. Neither source, by itself, establishes the commencement date of an implementing statutory amendment. Before relying on the ₹2 crore figure for a current case or compliance decision, consult the current text of the CGST Act and the relevant commencement notification, and obtain qualified tax advice where appropriate.
The Press Information Bureau’s overview of the Jan Vishwas (Amendment of Provisions) Bill, 2026 describes a wider proposed legislative package. It does not establish that the bill enacted or changed the Section 132 threshold or the punishment tiers discussed here. The Council decision should therefore not be conflated with that later bill.
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