GST Council proposes ending officer arrests, raising prosecution threshold and easing small seller rules
The GST Council's 57th meeting will consider removing arrest powers for tax officers, raising the criminal prosecution limit to Rs 5 crore, and simplifying compliance for small e-commerce sellers.
In its 57th meeting, the GST Council will debate a package of reforms that would strip GST officers of arrest powers, lift the criminal prosecution trigger to Rs 5 crore and de-criminalise nine specific violations. The agenda also includes a common protocol for demand notices, with no formal notice for demands under Rs 10,000, which represent about 20 % of cases. To help small e-commerce merchants, the council proposes recognizing a platform’s warehouse as a registered place of business, requiring physical verification only in one state and simplifying registration elsewhere.
Other items under review are a once-a-year tax-rate revision, redesign of GST registration forms for multi-state use, clarification of export definitions, removal of IGST exemption on precious-metal imports by banks, and allowing employers to claim ITC on employee-insurance premiums. Implementation would be phased starting early next year, shifting GST officers’ focus to tax recovery while law-enforcement agencies handle prosecutions.
Why it matters
The reforms could lower compliance costs for small businesses and curb punitive tax-officer powers nationwide.
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