The GST Council has recommended removing arrest powers under the Central Goods and Services Tax Act and raising the prosecution threshold from ₹1 crore to ₹5 crore. These proposals point toward a less punitive, more predictable tax system—but they are not confirmed as law in the official material available for the Council’s 57th meeting on 8 October 2026. Businesses should treat them as a welcome direction, not as protection already in force.
What the GST Council recommended
At its 57th meeting on 8 October 2026, the GST Council recommended changes to criminal enforcement and several routine tax-administration processes. The Council’s release presents these as recommendations, not enacted amendments. Its official materials describe a package intended to make compliance and administration more predictable.
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Arrest and prosecution
- Remove the GST arrest provision: The Council recommended omitting section 69 of the CGST Act, 2017. The GST Council’s 9 October FAQ describes removal of arrest provisions as proposed, not operative. (GST Council release and FAQ)
- Raise the prosecution threshold: The recommended threshold would increase from ₹1 crore to ₹5 crore.
- Revise offences and punishment: The recommendations include omitting or narrowing specified offences and rationalising punishment under section 132. The FAQ also describes giving courts discretion to impose only a fine and removing the minimum six-month imprisonment.
Penalties, appeals and administration
- The government describes a proposed reduction in the maximum general penalty from ₹25,000 to ₹10,000.
- For cases involving only a penalty and no tax demand, the proposal would cap pre-deposits at ₹40 crore.
- Other proposed changes cover registration, returns, refunds, adjudication, notices, proceedings and trade facilitation.
- For refunds, the Press Information Bureau describes proposed system-based processing, shorter acknowledgement times, deemed acknowledgement when no response is issued, and risk-based handling. These are proposed process changes, not established results. (PIB announcement)
Are the arrest and prosecution changes in force?
The official release uses recommendation language, and the 9 October FAQ calls the arrest amendments proposed. A GST Council recommendation alone does not establish that Parliament has enacted a change, that a notification has been issued, or that a commencement date has arrived. The official material cited here does not establish a later amending Act, notification or commencement date for these recommendations. Accordingly, do not assume that arrest powers have been removed or that the ₹5 crore threshold applies to a case today.
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Why the direction matters to businesses
Tax enforcement needs to distinguish deliberate evasion from disputes over classification, documentation, interpretation or process. Criminal powers can carry consequences far beyond the amount under dispute; clear thresholds, proportionate penalties and consistent procedures can reduce uncertainty and make ordinary compliance less intimidating. Removing the arrest provision and narrowing prosecution exposure would therefore be meaningful safeguards if enacted as recommended.
That is an argument for the package’s direction, not proof that coercive enforcement is widespread or that businesses broadly support these particular proposals. The official material reviewed does not provide independent business testimony, a survey, or evidence measuring the prevalence of coercive enforcement. It also does not establish that the proposed safeguards have already changed outcomes.
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The scale of GST makes predictable administration important
Government figures illustrate how many people and transactions the system handles, but they do not measure fairness or coercion. The Press Information Bureau reported that registered taxpayers increased from around 60 lakh in 2017 to approximately 1.70 crore as of September 2026. It also reported that, as of 30 September 2026, the GST System had cumulatively processed 3,053 crore invoice uploads and 833.82 crore e-way bills, while gross GST collections reached approximately ₹12.46 lakh crore during April–September 2026, up 11.6% year over year. These are government-reported figures, not independent assessments of enforcement quality. (PIB, October 2026)
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What would show whether the package works?
Announcements matter, but businesses will experience the rules and their implementation. The reform’s practical value can be assessed by tracking these distinct questions:
- Legal authority: Has the arrest provision actually been omitted, and from what effective date?
- Criminal exposure: Is the threshold changed to ₹5 crore, and which offences remain prosecutable?
- Procedural fairness: Are notices and adjudication standards clear and consistently applied?
- Refund access: Do acknowledgements and refunds arrive sooner, with less manual intervention?
- Appeal access: Does the proposed pre-deposit cap reduce the financial barrier in penalty-only cases?
For each measure, the announced design must be separated from the final law and from observed results. A target or process proposal does not itself demonstrate faster decisions, lower compliance costs or automated refunds.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Where to get help with a GST issue
For GST portal or process questions, use the GST Council Help page for official support contacts. That help channel is not evidence of a remedy for an enforcement dispute. If you receive a notice or face a case-specific tax or enforcement issue, consult a qualified Indian tax professional who can review the relevant facts and current law.
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