In a landmark set of compliance reforms, the GST Council has officially approved the removal of arrest powers for tax officers and raised the threshold for launching criminal prosecution fivefold, from Rs 1 crore to Rs 5 crore. Announced by Finance Minister Nirmala Sitharaman following the Council meeting in New Delhi, the changes are aimed at easing regulatory pressure, reducing harassment risks for taxpayers, and fostering a friendlier business environment.
The sweeping overhaul also includes a reduction in general penalties, simplified registration norms for small e-commerce sellers, faster tax refunds, and critical safeguards to protect genuine buyers from losing Input Tax Credit (ITC) due to supplier defaults. Government officials noted that these pro-growth measures are scheduled to come into effect starting April 1, 2027.
