GST officers can no longer arrest taxpayers
What's the story
The Goods and Services Tax (GST) Council has decided to revoke the arrest powers of GST officers. The decision was taken during a meeting on Thursday. Along with this, the council also increased the threshold for launching prosecution from ₹1 crore to ₹5 crore. This means that only cases involving tax evasion or fraud of ₹5 crore and above will now lead to criminal proceedings against offenders.
Enforcement changes
Shift from direct arrests to tax recovery and legal proceedings
The decision to remove arrest powers from GST officers is part of a larger strategy to shift focus from direct arrests by tax officials to tax recovery and legal proceedings.
Under the previous GST regime, Section 69 of the CGST Act empowered the Commissioner to authorize a central tax officer to arrest a person suspected of committing certain specified offenses.
Penalty adjustments
General penalty cut from ₹25,000 to ₹10,000
The GST Council has also cut down the general penalty from ₹25,000 to ₹10,000.
These changes were announced by Union Finance Minister Nirmala Sitharaman after the meeting.
The latest decision marks a major shift in this enforcement framework, though legal changes will depend on amendments to the GST law.