The GST Council on Thursday approved a series of taxpayer-friendly measures, including the removal of arrest powers from GST officers and a fivefold increase in the threshold for prosecution from Rs 1 crore to Rs 5 crore.
The decisions were taken at the 57th GST Council meeting in New Delhi, chaired by Union Finance Minister Nirmala Sitharaman, with the Centre and states agreeing on process reforms aimed at easing compliance and reducing the burden on businesses.
"The council recommended removing arrest powers under GST," Sitharaman said at a press briefing after the meeting. "When we say arrest has been taken out, taken out from a tax officer's hands." She emphasised that criminal prosecution would continue to be available under GST law where criminality exists.
Decriminalisation push
The Council raised the prosecution threshold to Rs 5 crore, meaning cases below that amount will not face prosecution. It also removed the minimum punishment provision for GST offences, leaving courts to decide whether a case warrants a fine, imprisonment or both. The general penalty, applicable where no specific penalty is prescribed, has been cut from Rs 25,000 to Rs 10,000.
Taxpayers who file returns late, make genuine mistakes or delay payments will now face only recovery proceedings, interest and proportionate penalties. The Council also decided that no show-cause notices will be issued where the amount involved is below Rs 10,000, and pending notices below that threshold will be withdrawn.
Faster refunds, simpler registration
The Council cut the refund acknowledgement period from 15 days to 10 days and provided for automated sanction of 90 per cent of eligible claims following risk assessment — a move Sitharaman said would improve working capital for businesses. Refunds of excess balances in the cash ledger will also become fully automatic.
It approved continuing automated GST registration within three working days for low-risk applicants, and an optional scheme for taxpayers with turnover up to Rs 5 crore who supply only to consumers, letting them file returns once a year while paying tax quarterly.
No rate changes were announced. "No rate changes have been made. The rate structure is settled," Sitharaman said. Prime Minister Narendra Modi welcomed the reforms, saying the removal of arrest provisions, greater decriminalisation and simpler procedures would have a very positive impact.
Sources: WION | Economic Times
The decisions were taken at the 57th GST Council meeting in New Delhi, chaired by Union Finance Minister Nirmala Sitharaman, with the Centre and states agreeing on process reforms aimed at easing compliance and reducing the burden on businesses.
"The council recommended removing arrest powers under GST," Sitharaman said at a press briefing after the meeting. "When we say arrest has been taken out, taken out from a tax officer's hands." She emphasised that criminal prosecution would continue to be available under GST law where criminality exists.
Decriminalisation push
The Council raised the prosecution threshold to Rs 5 crore, meaning cases below that amount will not face prosecution. It also removed the minimum punishment provision for GST offences, leaving courts to decide whether a case warrants a fine, imprisonment or both. The general penalty, applicable where no specific penalty is prescribed, has been cut from Rs 25,000 to Rs 10,000.
Taxpayers who file returns late, make genuine mistakes or delay payments will now face only recovery proceedings, interest and proportionate penalties. The Council also decided that no show-cause notices will be issued where the amount involved is below Rs 10,000, and pending notices below that threshold will be withdrawn.
Faster refunds, simpler registration
The Council cut the refund acknowledgement period from 15 days to 10 days and provided for automated sanction of 90 per cent of eligible claims following risk assessment — a move Sitharaman said would improve working capital for businesses. Refunds of excess balances in the cash ledger will also become fully automatic.
It approved continuing automated GST registration within three working days for low-risk applicants, and an optional scheme for taxpayers with turnover up to Rs 5 crore who supply only to consumers, letting them file returns once a year while paying tax quarterly.
No rate changes were announced. "No rate changes have been made. The rate structure is settled," Sitharaman said. Prime Minister Narendra Modi welcomed the reforms, saying the removal of arrest provisions, greater decriminalisation and simpler procedures would have a very positive impact.
Sources: WION | Economic Times