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GST Council Approves Major Reforms and Withdrawal of GST Arrest Powers

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The GST Council approved major process reforms, including withdrawal of GST arrest powers and raising the prosecution threshold to ₹5 crore.

By News National Editorial Team

The 57th Goods and Services Tax (GST) Council meeting on October 8 approved a broad package of reforms aimed at simplifying tax administration, reducing compliance burdens and creating a more trust-based GST system.

One of the most significant recommendations is the complete withdrawal of GST arrest powers by proposing the omission of Section 69 of the Central GST Act.

The Council also recommended increasing the monetary threshold for prosecution from ₹1 crore to ₹5 crore. The changes are intended to distinguish serious tax fraud from procedural or lower-value disputes.

Faster registration and refunds

The Council recommended several measures to make GST registration more automated and reduce unnecessary interaction between taxpayers and tax officials.

It proposed clearer documentation requirements, improved online forms and a more user-friendly GST portal.

Refund processing is also set for changes. The recommendations include automatic sanction of eligible excess cash-ledger refunds and reducing the period for issuing an acknowledgement or deficiency memo from 15 days to 10 days.

Relief for smaller taxpayers

The Council also proposed late-fee relief for smaller taxpayers under specified conditions and changes intended to reduce the cost of accessing appeals.

Several measures concern input tax credit, exports, e-commerce suppliers and movement of goods.

For e-way bills, the Council recommended that interception of goods vehicles should generally be based on specific intelligence and authorised at a senior level.

What businesses should know

The reforms could reduce administrative friction for companies, exporters, small businesses and other GST-registered taxpayers.

However, the recommendations are not automatically law simply because the Council approved them. The government will need to make the relevant statutory amendments, notifications or circulars for the measures to take legal effect.

Sources

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