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[BUSINESS] · India · 34 sources

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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

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Sources

States welcome GST reforms [nagalandpost.com]