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GST Council approves major reforms including removal of arrest powers
The 57th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, has introduced significant administrative and procedural reforms aimed at easing compliance and fostering a trust-based tax environment. A major highlight of the meeting is the decision to remove the power of arrest for GST officials, shifting the enforcement focus from deterrence to detection through technology.
Key fiscal changes include raising the criminal prosecution threshold from ₹1 crore to ₹5 crore and reducing the general penalty from ₹25,000 to ₹10,000. The Council also proposed a ₹10,000 threshold for issuing certain tax notices. To improve liquidity, the Council recommended expanding refund eligibility for input services under the inverted duty structure, effective November 1, 2026, and moving toward automated refund processing.
Additional reforms focus on simplifying registration for small businesses and e-commerce sellers, automating registration amendments, and streamlining the e-way bill process to prevent unnecessary interceptions of goods in transit. While no changes were made to existing GST tax rates, the Council decided that rate-related matters will be addressed in a dedicated annual meeting. These reforms are scheduled to be implemented starting April 1, 2027.
Entities
Bharat Mandapam · GST Council · India · Ministry of Finance · NASSCOM · Narendra Modi · New Delhi · Nirmala Sitharaman
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 12 SOURCES] The threshold for criminal prosecution was raised from ₹1 crore to ₹5 crore. thefederal.com · pragativadi.com · www.aajtak.in · hindi.webdunia.com · bizrapidx.com · +4 more
- [● 5 SOURCES] No GST notices will be issued for amounts below ₹10,000. thefederal.com · pragativadi.com · www.nationalheraldindia.com · taxguru.in
- [● 5 SOURCES] Refunds for input services under the inverted duty structure will be extended starting November 1, 2026. thefederal.com · www.nationalheraldindia.com · www.aajtak.in · www.autopunditz.com
- [● 9 SOURCES] The general penalty was reduced from ₹25,000 to ₹10,000. thefederal.com · pragativadi.com · www.aajtak.in · hindi.webdunia.com · www.nationalheraldindia.com · +2 more
- [● 15 SOURCES] The GST Council approved removing the arrest powers of tax officials. thefederal.com · pragativadi.com · www.aajtak.in · hindi.webdunia.com · bizrapidx.com · +6 more
- [● 7 SOURCES] No changes were made to the existing GST tax rates during the meeting. thefederal.com · yespunjab.com · www.aajtak.in · www.nationalheraldindia.com · www.businesstoday.in · +1 more
- [● 4 SOURCES] Approximately 90% of eligible refund claims are expected to be processed automatically. yespunjab.com · businessnewsthisweek.com · bhaskarlive.in
- [● 4 SOURCES] Input tax credit (ITC) is now allowed on employee health and life insurance. yespunjab.com · english.mathrubhumi.com · www.taxscan.in