Arrest powers under GST regime likely to be removed in bid to address concerns on overreach by tax authorities

The Goods and Services Tax (GST) regime in India is set to undergo a significant overhaul, with the removal of arrest powers under consideration. This move aims to address concerns regarding overreach by tax authorities and boost investor sentiment. The upcoming GST Council meeting on October 7 is expected to discuss the proposal to decriminalize offences under the indirect tax regime.

The Centre and states have held several meetings over the past eight-nine months, including top-level discussions, to reach a consensus on removing the arrest provisions under GST. The arrests of high-ranking functionaries under GST provisions have been seen as a major impediment for traders and businesses. If the proposal is implemented, authorities will proceed with prosecution under the country's criminal code for intentional frauds and deceit under GST.