Crucial changes! GST council removes arrest powers of tax officers

NEW DELHI: The GST Council meeting decided on the complete removal of arrest powers for GST officials. Union Finance Minister Nirmala Sitharaman announced that the Council recommended revoking the arrest powers granted to officials under GST laws while raising the minimum threshold for initiating prosecution proceedings from Rs 1 crore to Rs 5 crore.

A decision was also taken to remove the provision for a minimum penalty under GST laws. Whether to impose a fine, imprisonment, or both will now be left to the discretion of the courts, depending on the nature of the case.

The penalty for GST violations, without any specific penalty provision, will be reduced from Rs 25,000 to Rs 10,000. Taxpayers who delay filing returns or have outstanding dues will henceforth be liable to pay only the outstanding amount, interest, and a proportionate penalty. These relaxations have been made possible because the GST system has now acquired the capability to manage seller and buyer invoices and detect fraudulent credits.

The finance minister said the move was taken to bring ease of doing business and reduce compliance burdens.