The GST Council, at its 57th meeting in New Delhi on October 8, scrapped the arrest powers of GST officers and raised the prosecution threshold for GST offences to ₹5 crore, according to reports, in a package aimed at streamlining enforcement and easing the burden on businesses.
The decisions mark a significant shift in how tax enforcement under the Goods and Services Tax regime is expected to operate. Removing the arrest powers of GST officers addresses one of the most contentious tools available to the tax administration, which business groups have long criticised as prone to misuse against taxpayers in disputes that are often interpretational rather than criminal in nature.
Alongside that change, the Council raised the threshold for launching prosecution in GST offences to ₹5 crore. According to reports, the higher threshold is intended to ensure that prosecution — the most serious enforcement step — is reserved for larger cases, while smaller matters are handled through assessment, penalties and other civil mechanisms already available under the law.
The 57th meeting of the Council, the apex decision-making body for GST comprising Union and state finance representatives, took up the measures as part of an effort to streamline enforcement. According to reports, the stated aim is to give relief to businesses, particularly smaller firms for whom the threat of arrest or prosecution in routine compliance disputes has been a persistent concern since the tax was introduced.
Trade and industry bodies have for years sought decriminalisation of procedural GST offences and clearer thresholds separating civil defaults from criminal conduct. The Council’s decisions move in that direction, although the practical impact will depend on how the changes are written into notifications and applied by field formations across states.
According to reports, the reforms are positioned as part of a broader push to make the GST system more predictable and less adversarial for compliant taxpayers, while enforcement resources are concentrated on deliberate, large-scale evasion. Businesses and tax advisers will now watch for the formal notifications giving effect to the Council’s decisions, which will set out the exact scope of the arrest-power removal and the revised prosecution threshold in law.