GST Council scraps arrest powers of tax officials, hikes monetary threshold for prosecution to Rs 5 crore

New Delhi | October 8:
At the 57th GST Council meeting in Delhi, Union Finance Minister Nirmala Sitharaman on Thursday proposed significant changes to GST enforcement, including a proposal to scrap arrest powers of the tax officials.Track Exec Orders
The power of arrest under GST would be removed, while the monetary threshold for prosecution would be increased from Rs 1 crore to Rs 5 crore.
Under the present rules, GST officers can arrest accused in major cases involving tax evasion, fraudulent input tax credit (ITC) or wrongful refunds exceeding RS 1 crore.
However, under the new proposal, the mandatory minimum punishment would also be removed, leaving the decision on whether to impose a fine, imprisonment or both to judicial discretion.
The general penalty applicable in cases where no specific penalty has been prescribed would be reduced from Rs 25,000 to Rs 10,000.
The government said improvements in GST data analytics have made it possible to match invoices issued by sellers with those reported by buyers and identify fraudulent input tax credit closer to the point at which it is generated.