GST Council Takes Up Removal of Tax Officers' Arrest Powers and Wider Decriminalisation
The 57th meeting of the GST Council was held on 8 October 2026 at Bharat Mandapam, New Delhi. It was the Council's first meeting in more than a year, and the date had been moved twice.
A key proposal on the agenda was to take away the power of GST officers to arrest a person on their own. Under the proposal, an arrest would need a court order after prosecution (a criminal case) has started. Officers would still be able to recover tax, interest and penalty.
The proposal also aims to raise the money limit for starting a criminal case, reportedly from ₹1 crore (the lowest band today) to ₹5 crore. Some offences may be removed, the minimum jail term may go, and in one category the maximum term may fall from three years to two.
Other agenda items included easier registration for small e-commerce sellers through platform warehouses (about 9.5 lakh sellers could gain), no tax notices for demands below ₹10,000, and faster, risk-based refunds.
The thinking behind the changes is "trust the taxpayer". Officials say invoice-matching technology now catches fraud, so arrest powers are less needed. Any change in the law needs amendments to the GST Acts and is expected to take effect in early 2027.
GST Act Provisions on Offences and Arrests
The GST law punishes wrongdoers in two ways. The first is money punishment: tax demand, interest and penalty, decided by tax officers. The second is criminal punishment: jail, which only a criminal court can give after a trial (this is called prosecution). The arrest and prosecution rules are in Sections 69 and 132 of the Central Goods and Services Tax (CGST) Act, 2017.
The Council is now discussing whether officers should lose the Section 69 power to arrest on their own, so that arrests happen only with a court order. Raising the prosecution threshold to ₹5 crore would mean only large frauds lead to criminal cases, while smaller cases are handled through tax, interest and penalty.
Jan Vishwas (Amendment of Provisions) Act, 2023
The Jan Vishwas Act is a law that changed many business and everyday laws at once to remove jail terms for small, technical mistakes. Instead of jail, these mistakes now attract fines or penalties decided by officers. The idea is that honest citizens and businesses should not fear prison for minor lapses like a late form or a missed filing. It is the base of India's wider "decriminalisation" drive, of which GST reform is one part.
The GST proposals follow the same "trust first" thinking as the Jan Vishwas laws. Small or technical tax mistakes would be handled with money penalties, and jail would be kept only for large, deliberate frauds.
The GST Council (Article 279A)
The GST Council is the body that makes the main decisions about GST: tax rates, exemptions, rules and changes to the tax law. It was created by Article 279A, added through the 101st Constitutional Amendment Act, 2016. It brings the Centre and all states to one table, so it is a key example of cooperative federalism (the Centre and the states working together).
Removing arrest powers or raising prosecution limits needs a Council recommendation first. Then Parliament must amend the CGST Act and each state must amend its own SGST Act. This is why the changes are expected only in early 2027.
- 57th GST Council meeting: 8 October 2026, Bharat Mandapam, New Delhi (moved from 12 September and then 7 October)
- Arrest power today: Section 69, CGST Act, 2017 (Commissioner's "reasons to believe")
- Punishment slabs: Section 132, CGST Act (₹1–2 crore: up to 1 year; ₹2–5 crore: up to 3 years; above ₹5 crore: up to 5 years)
- Proposed prosecution threshold: ₹5 crore (reported as up from ₹1 crore)
- Proposed: no tax notices for demands below ₹10,000 (about one-fifth of cases by number)
- About 9.5 lakh small e-commerce sellers could benefit from warehouse-based registration
- Radhika Agarwal v. Union of India: 27 February 2025, upheld Sections 69 and 70 with safeguards
- GST Council: Article 279A, 101st Amendment Act, 2016; Centre one-third vote, states two-thirds, decisions by three-fourths
- Changes expected to take effect: early 2027, after amendments to the GST Acts