The GST Council has recommended removing arrest provisions under GST and setting a ₹10,000 minimum tax amount for show-cause notices. These are recommendations for amendments, not proof that the changes are already in force. The Ministry of Finance’s 8 October 2026 release gives no implementation date; taxpayers should check for the enacted amendments or official notifications before relying on them.
What the GST Council recommended
At its 57th meeting in New Delhi on 8 October 2026, the Council recommended amendments to the CGST Act and related processes. Its package includes changes to arrest provisions, notice thresholds, prosecution thresholds and penalties. The official summary is published by the Ministry of Finance.
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Arrest provisions and prosecution threshold
The Council recommended removal of arrest provisions under GST. Separately, it recommended raising the prosecution threshold from ₹1 crore to ₹5 crore. These are distinct proposals: the prosecution-threshold change should not be read as the legal mechanism for removing arrest provisions, or as evidence that either proposal has commenced.
General penalty
The Council also recommended reducing the general penalty from ₹25,000 to ₹10,000. The release presents this as a recommendation, not an operative change.
How the proposed ₹10,000 notice floor would work
The recommended minimum is based on the aggregate tax amount involved across CGST, SGST, IGST and cess. The Ministry release says: “Thus, no notices will be issued if the tax amount involved is less than Rs. 10,000/-.” The stated wording excludes amounts below ₹10,000; it does not expressly say in that sentence that a notice is barred when the amount is exactly ₹10,000. News On AIR reported the Finance Minister as saying notices would not be issued at or below ₹10,000, so the exact boundary should be confirmed against the final legal text. The News On AIR report also describes the transition for pending notices.
Pending notices and appeals
The Council recommended a statutory provision for qualifying notices and appeals below ₹10,000 that are pending when the threshold provision comes into force. They would be decided as if the threshold had applied when the notice was issued. This is a proposed transition rule; the Council’s release does not itself withdraw pending matters or set the date from which the rule would operate.
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Other recommended changes to penalties
The Council recommended amendments to sections 73, 74 and 74A of the CGST Act. The release describes these additional measures:
- Where the full tax, interest and penalty are voluntarily paid within the specified time, the penalty amount would be deemed a “charge.”
- For specified non-fraud cases, the penalty would be reduced to 5% if tax and interest are paid within 30 days of the adjudication order under section 73, or within 60 days under section 74A.
- The minimum ₹10,000 penalty in non-fraud cases would be removed.
The 5% figure is a proposed rate with the stated case and payment-timing conditions, not a general penalty rate for every GST matter.
Are the recommendations already in force?
The Council’s announcement is a recommendation for amendments, not the amendment itself. Its release does not give an effective date for these changes. Until the relevant legal text is enacted or an official notification establishes commencement, do not assume arrest provisions have been removed, that a notice below the proposed floor is invalid, or that a pending notice has been withdrawn. The Ministry’s release is the primary source for what was recommended; subsequent legal texts determine what applies.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What taxpayers should check before acting
- Look for the enacted amendment or commencement notification, including its effective date.
- For a notice amount near ₹10,000, confirm how the final law treats the boundary and aggregates CGST, SGST, IGST and cess.
- If a below-threshold notice or appeal is pending, verify whether the proposed transition provision has come into force and covers the case.
- Do not treat the proposed prosecution threshold or penalty changes as operative solely because they were announced by the Council.
The Prime Minister’s Office reproduced Narendra Modi’s welcome for the reforms, describing their intended focus as “Faster decisions. Lower compliance costs. Automated refunds. Trust-based administration.” That statement describes the policy direction; it does not establish commencement of the specific amendments.
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