GST Council Meeting 2026: Tax officers' arrest powers scrapped, prosecution threshold raised to Rs 5 crore; no rate changes
GST Council Meeting 2026: The GST Council concluded that existing GST rates would remain unchanged. It further removed arrest authorities from tax officers while increasing the threshold for prosecution to Rs 5 crore. The Council introduced friendlier regulations for small sellers on e-commerce sites, as well as efforts to enhance tax compliance and registration processes. Collectively, these…
The GST Council convened on Thursday to discuss several significant tax reforms. Most notably, the council voted to remove GST tax officers' powers to arrest individuals suspected of tax evasion. Additionally, the prosecution threshold was raised fivefold, from Rs 1 crore to Rs 5 crore. The council left tax rates unchanged, as announced in the 57th meeting.
Finance Minister Nirmala Sitharaman revealed that these reforms would take effect from April 1, 2027. The council also decided to simplify tax refunds, cut the general penalty from Rs 25,000 to Rs 10,000, and streamline registration processes for small e-commerce sellers. Moreover, GST officers would no longer have the authority to arrest taxpayers, and the minimum punishment would be left to the discretion of the judiciary.
The council approved accelerating tax refunds, reducing the time frame from 15 days to 10 days. Refunds will be automatically sanctioned for 90% of eligible claims, with orders issued within three working days. Furthermore, the council simplified GST registration and amendment processes through automated technology-led procedures.
In terms of ITC (Input Tax Credit) and export reforms, the council extended refunds to health and life insurance purchased by businesses for employees, as well as certain telecommunications towers, pipelines, free samples, and expired stock. The council also decided to constitute a committee to examine refund eligibility for input services, which will submit its findings within three months. Lastly, the council clarified export benefits for services provided through overseas branches and goods belonging to foreign clients.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
