New Delhi: The 57th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman, approved major reforms on Thursday.
The most significant changes include scrapping the arrest powers of GST officers and raising the prosecution threshold from Rs 1 crore to Rs 5 crore and lowering the general penalty from Rs 25,000 to Rs 10,000.
The minimum punishment stands removed, and the punishment — fine, imprisonment, or both – has been left to judicial discretion in every case, as per the Council’s decision.
Addressing reporters after the meeting, Sitharaman said the Council focused on process-related reforms aimed at improving ease of doing business and reducing compliance burdens.
#WATCH | Delhi | 57th GST Council meeting | Union Finance Minister Nirmala Sitharaman says, “In today’s set of agenda, in fact, I can say all of them have been agreed to, except for two, where a committee is formed…If everything is agreed, on two, where we have agreed for a committee to look into it and come back. Even on those two, I have said within three months they should come back. We will hold a GST Council meeting immediately after that. That will also get implemented from 1st April 2027. Every one of the agenda items of today in the process reform will be implemented from 1st April 2027…”
— ANI (@ANI) October 8, 2026
A taxpayer who files late, makes an error or delays payment will face recovery, interest and a proportionate penalty, “and nothing beyond that”.
The changes, which cover registration, returns, refunds, litigation, input tax credit, goods in transit and exports, are possible because the GST system can match seller and buyer invoices as well as identify fake credit when it arises. This capability did not exist in the system when the law was framed, the Council said.
No notice below Rs 10,000
The Council has proposed a common standard for GST litigation, covering how notices are issued and served, pre-notice intimation, when fraud can be alleged, hearings and the writing of orders.
In cases where the monetary amount is below Rs 10,000, no notice will be issued.
The Council is examining protection for a genuine buyer who has a proper invoice, received the goods and paid the supplier in full.
The time limit for acknowledging a GST refund claim is set to be reduced from 15 days to 10 days. If neither an acknowledgement nor a deficiency memo is issued within 10 days, the claim will be treated as acknowledged.
The system, rather than an officer, will sanction 90 per cent of a claim based on risk assessment. The order will be issued within three working days of acknowledgement, compared with seven days at present.
The Council has also proposed changes to checking of goods moving across states. A vehicle may be stopped only on the basis of specific intelligence, and the decision must be authorised in advance by an officer not below the rank of Joint Commissioner, said Sitharaman.
Only the state from which the goods started and the destination state will be able to inspect a consignment. Hence, states along the route will not be able to stop the vehicle.