GST Council scraps GST officers’ arrest powers, raises prosecution threshold to ₹5 crore

The 57th GST Council on Thursday (October 8, 2026) approved the removal of GST officers’ arrest powers and raised the threshold for launching prosecution from ₹1 crore to ₹5 crore.

The decision changes the enforcement framework under the goods and services tax regime, while the Finance Ministry said the rate structure had been settled and the Council was now focusing on how the tax works day to day.

The Ministry also said GST rate changes will now take place once a year.

Committee to examine input tax credit protection

The Council decided to set up a Committee of Officers to examine safeguards for a genuine buyer who holds a proper invoice, has received the goods and has paid the supplier in full.

The Ministry said the committee will complete its study within three months.

It added that an agenda based on the committee’s study will be placed before the next GST Council meeting.

The Council’s decision also removes the minimum punishment.

The punishment, whether fine, imprisonment, or both, will be left to judicial discretion in every case, according to the council decision.

General penalty reduced

The general penalty, which applies when no specific penalty is provided, has been reduced from ₹25,000 to ₹10,000, the Ministry said.

Taken together, the decisions cover enforcement powers, prosecution, punishment and penalties, while the proposed committee will examine the treatment of buyers who have completed the stated invoice, goods-receipt and payment requirements.

The Finance Ministry said the Council’s focus had shifted to the day-to-day functioning of GST after settling the rate structure.

Source: The Hindu