GST Council to Discuss Removing Arrest Powers: Decriminalisation of Tax Law Explained
The Centre and the states are considering removing the power of GST officers to arrest taxpayers under the GST law. The proposal is expected at the 57th GST Council meeting on Wednesday, 7 October 2026.
The step would need amendments to the GST laws. The Centre may bring these in the Winter Session of Parliament.
Serious and deliberate fraud would still be punishable. Prosecution would remain, and arrests in such cases could be made under the general criminal law, the Bharatiya Nyaya Sanhita (BNS), 2023.
Today, Section 69 of the CGST Act, 2017 lets the Commissioner authorise an arrest for certain offences under Section 132. These include supply without invoice, fake invoices without real supply, fraudulent input tax credit, and tax collected but not paid for over three months.
According to official data cited in reports, central GST formations recorded 72,393 cases of GST offences between 2021-22 and 2024-25 and made 887 arrests (state arrests are extra).
The move is part of a wider decriminalisation push in taxation. In September 2026, the Central Board of Direct Taxes (CBDT) removed arrest and detention provisions from income-tax recovery rules, with effect from 1 April 2026.
GST Act Provisions on Offences and Arrests
The GST law has two kinds of punishment. The first is money punishment: tax demand, interest and penalty, decided by tax officers. The second is criminal punishment: prosecution in a court, which can lead to jail, and in serious cases arrest by GST officers. Section 132 lists the crimes, and Section 69 gives the power to arrest.
If the Council agrees, Section 69's arrest power would be removed from the GST law. Section 132 offences could still be prosecuted, and deliberate fraud could still lead to arrest under the BNS, but routine GST cases would no longer carry the threat of arrest by tax officers.
Jan Vishwas (Amendment of Provisions) Act, 2023
The Jan Vishwas (Amendment of Provisions) Act, 2023 is a law that changed many existing central laws in one go. It removed jail terms for small, technical or procedural mistakes and replaced them with money penalties. "Jan Vishwas" means "people's trust". The idea is that the state should trust citizens and businesses and not treat every small lapse as a crime. A second, much larger law, the Jan Vishwas (Amendment of Provisions) Act, 2026, carried this work further.
Removing arrest powers from the GST law follows the Jan Vishwas approach. Minor and procedural tax defaults would be handled through money and civil processes, while real fraud would still face prosecution. The GST law is not one of the Acts amended by Jan Vishwas, so the change needs a separate amendment, expected in the Winter Session.
- 57th GST Council meeting: Wednesday, 7 October 2026
- Arrest power: Section 69, CGST Act, 2017; offences: Section 132
- Tax collected but unpaid for more than three months is a Section 132 offence
- Central GST formations: 72,393 offence cases and 887 arrests between 2021-22 and 2024-25
- Arrest for fraud may still be possible under the Bharatiya Nyaya Sanhita, 2023
- CBDT removed arrest and detention from income-tax recovery rules, with effect from 1 April 2026
- Radhika Agarwal v. Union of India (2025): Supreme Court upheld GST arrest powers with safeguards