At its 57th meeting on October 8, the GST Council approved removing arrest powers under GST entirely and raising the prosecution threshold from ₹1 crore to ₹5 crore — the biggest enforcement reform since GST began.
Arrest goes altogether: Section 69 of the CGST Act is being omitted, so GST officers lose the power to arrest once the changes take effect from April 1, 2027. Prosecution narrows too — the Section 132 offence list is trimmed to serious fraud like fake invoicing and bogus ITC, and the mandatory minimum punishment is removed, leaving the quantum to judicial discretion.
There is more relief in the package: the general penalty drops from ₹25,000 to ₹10,000, refunds get faster, and registration simplifies for small e-commerce sellers. No rate changes either — those move to a dedicated once-a-year meeting.
Our advice: honest businesses lose the sharpest edge of GST enforcement, but the offences that remain are the serious ones. Clean books and accurate returns are still the protection. If you have pending notices or prosecution exposure, review the position before the new thresholds take effect.
