GST Council Removes Arrest Powers of Tax Officers, Raises Prosecution Threshold to Rs 5 Crore

The decisions were taken at the 57th meeting of the GST Council chaired by Union Finance Minister Nirmala Sitharaman in the national capital.

Addressing reporters after the meeting, Sitharaman said the Council had focused on procedural reforms intended to improve ease of doing business and reduce compliance burdens rather than changing GST rates.

"No rate changes have been made. The rate structure is settled," the Finance Minister said, adding that while the previous year's discussions had centred on simplifying GST rates, the current exercise focused on making procedures more efficient for businesses.

"GST Council scraps arrest power of tax officers; raises prosecution threshold to Rs 5 crore from 1 crore," Sitharaman said.

The Council also approved the automatic acceptance of routine changes in GST registration. The move is expected to reduce administrative delays and make the registration process more efficient for taxpayers.

Refund processing will also be expedited, with the acknowledgement period for refund applications being reduced to 10 days from the existing 15 days.

Sitharaman said 90 per cent of eligible refund claims would be issued within three working days, a measure aimed at improving cash flow and liquidity for businesses and exporters.

The Council also widened the scope of input tax credit (ITC), allowing businesses to claim credits on additional categories of expenditure, including telecom towers and insurance coverage provided by employers.

The 57th GST Council meeting had been rescheduled from Wednesday due to unavoidable circumstances. It was attended by representatives of the Centre and various state governments and Union Territories.

Those present included the Chief Ministers of Delhi, Goa, Haryana, Jammu and Kashmir, Karnataka, Kerala, Maharashtra and Meghalaya, along with Deputy Chief Ministers of Manipur and Telangana. Finance Ministers and senior officials from states and Union Territories, the Revenue Secretary, the Chairman and members of the Central Board of Indirect Taxes and Customs (CBIC), and senior Finance Ministry officials also participated in the meeting.