GST Council ends GST officers' arrest powers; ₹10,000 limit for notices
New Delhi, Oct 8, 2026
The council has removed the power to arrest under GST. It also raised the threshold for prosecution from ₹1 crore to ₹5 crore
The GST Council on Thursday approved a series of measures aimed at easing compliance and reducing litigation, including removing GST officers’ power to arrest taxpayers and setting a ₹10,000 threshold for issuing show-cause notices. No new rate revisions were announced during the meeting.
The Council has removed the power to arrest under GST. It has also raised the threshold for prosecution from ₹1 crore to ₹5 crore.
The 57th GST Council meeting, held under the chairmanship of Finance Minister Nirmala Sitharaman, has also removed the minimum punishment for offences. The punishment, whether a fine, imprisonment or both, will now be decided at the discretion of the judiciary in each case.
The general penalty, which applies where no specific penalty is prescribed, has been reduced from ₹25,000 to ₹10,000.
The Council has decided that taxpayers who file returns late, make mistakes or delay tax payments will face recovery, interest and a proportionate penalty, and nothing beyond that.
10,000 threshold for notices
The Council has decided that no show-cause notice will be issued where the amount involved is below ₹10,000. It has also approved a common standard for issuing and serving notices, pre-notice intimation, alleging fraud, conducting hearings and writing orders.
Faster GST refunds
The Council has reduced the time limit for acknowledgement of a refund claim from 15 days to 10 days. If neither an acknowledgement nor a deficiency memo is issued within 10 days, the claim will be treated as acknowledged.
The system will now sanction 90 percent of the claim based on a risk assessment, with the order issued within three working days of acknowledgement, compared with seven days earlier. Refunds of excess balances in the cash ledger will also become fully automatic, without officer involvement.
Faster GST registration
The Council has also decided to continue automated registration within three working days for low-risk applicants and applicants whose output tax on supplies to registered persons does not exceed ₹2.5 lakh a month.
About 61 percent of registrations already come through this automated route, while the remaining applications go to an officer, the Council said.
Changes for smaller taxpayers
It has approved in principle an optional scheme under which taxpayers with turnover of up to ₹5 crore who supply only to consumers can file returns once a year and pay tax quarterly.
The detailed framework and required amendments will be placed before the Council at its next meeting.
The Council has also decided to automate the closure of GST registrations in stages, beginning with smaller taxpayers. The final return will form part of the closure application instead of being filed separately afterwards.
[Business Standard]
