New Delhi: The GST Council has approved the removal of GST officers’ arrest powers and changes that would make imprisonment optional upon conviction, as part of a decriminalisation package scheduled to take effect from April 1, 2027.
The Council, comprising the Union and state finance ministers, also raised the threshold for launching prosecution in GST evasion cases from Rs 1 crore to Rs 5 crore at its 57th meeting on Thursday.
Follow The PSUWatch Channel on Whatsapp
Under the approved framework, evasion exceeding Rs 10 crore would attract imprisonment of up to five years, a fine or both. For amounts exceeding Rs 5 crore but not Rs 10 crore, the punishment would be up to two years in jail, a fine or both.
In an FAQ explaining the changes, the Central Board of Indirect Taxes and Customs (CBIC) said imprisonment would no longer be compulsory upon conviction.
"The punishment is proposed to be changed from 'imprisonment and fine' to 'imprisonment or fine or both', so that the court may have discretion in awarding punishment," the CBIC said.
The Council also approved removing the mandatory minimum imprisonment of six months under Section 132(3), giving courts greater discretion in sentencing.
Follow PSU Watch on LinkedIN
Under the proposed changes, GST officers would no longer be empowered to arrest a person for an offence under the law.
However, tax authorities could still file a complaint before a competent court to launch prosecution where the amount involved exceeds Rs 5 crore. The removal of arrest powers would therefore leave the prosecution route open for offences above the revised threshold.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated.)