The GST Council recommended narrower prosecution rules for certain CGST Act offences, a higher general tax threshold for prosecution, and lower compounding amounts. These were proposals—not a blanket amnesty for GST violations. The Council’s published material and Finance Bill 2023 documents describe the changes, but the exact commencement date is not established here; check the current consolidated CGST Act and relevant notifications before relying on a threshold or offence list for a live matter.
What the Council recommended
At its 48th meeting, the GST Council considered recommendations to amend prosecution and compounding provisions of the Central Goods and Services Tax Act, 2017 (CGST Act). The measures were intended to decriminalise certain conduct, raise the general minimum tax amount for launching prosecution, and make compounding more accessible. The Council’s official detailed agenda and the Government’s Press Information Bureau release describe them as recommendations, not proof by themselves of when an amendment took effect.
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| Measure | Existing position described in the proposal | Proposed change |
|---|---|---|
| Specified offence categories | Three categories listed in Section 132(1) of the CGST Act were prosecutable offences. | Remove clauses (g), (j) and (k) from that list. |
| General prosecution threshold | ₹1 crore. | Raise it to ₹2 crore, except for issuing invoices without a supply of goods or services. |
| Compounding amount | 50%–150% of the tax amount. | Change the range to 25%–100% of the tax amount. |
The figures are policy parameters in the Council’s recommendation, not measurements of realised savings or reduced prosecutions.
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Which GST offences were proposed for removal from prosecution?
The recommendation concerned three specific clauses in Section 132(1), not every conduct that might be called a minor GST violation:
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- Clause (g): obstructing or preventing an officer from discharging duties under the Act.
- Clause (j): tampering with or destroying material evidence or documents.
- Clause (k): failing to provide information required under the Act or rules, or providing false information, subject to the clause’s qualification for a person who reasonably believes the information to be true.
The Law Committee’s stated rationale was that these types of conduct were already covered by Indian Penal Code provisions. The Council agenda also notes that some conduct could remain subject to a penalty under Section 122, including where it was not tied to a tax amount. Removing a category from the CGST Act’s prosecution list therefore does not establish that all other legal consequences disappear.
How would the prosecution threshold change?
The recommendation was to raise the general minimum tax amount for launching prosecution under GST from ₹1 crore to ₹2 crore. The Press Information Bureau expressly described an exception for the offence of issuing invoices without a supply of goods or services or both. The ₹2 crore figure should not be presented as a threshold that protects invoice-without-supply offences.
This is a proposed prosecution threshold, not a waiver of tax due. It does not, on the evidence cited here, cancel return-filing duties, tax recovery, or penalties that may apply under separate provisions.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesWhat changes were proposed for compounding?
Compounding is a statutory route for settling a prosecution matter on payment of a prescribed amount, subject to the law’s conditions. The Council recommended changing the range from 50%–150% of the tax amount to 25%–100%. The actual amount in an individual case would depend on the applicable law and facts; the proposed range is not a promise that a particular trader would pay a specific percentage.
Why did the issue include concern about bill traders?
The 49th GST Council agenda records a Tamil Nadu representative supporting the decriminalisation proposal except in relation to bill traders. That entry shows the deliberation included concern about fraudulent invoice or bill-trading activity, but it does not establish that the comment changed the statutory text or settled the final treatment of any case. The invoice-without-supply exception in the prosecution-threshold recommendation is a separate and explicit qualification.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Are these measures in force today?
The official Council material links the recommendations to Finance Bill 2023 amendment context, including the proposed removal of clauses (g), (j) and (k), the ₹2 crore threshold with its invoice exception, and the revised compounding range. The GST Council’s Finance Bill 2023 material provides legislative context; the Council’s 49th meeting agenda records the subsequent discussion.
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Those references do not, on their own, verify the precise commencement notification and date. For a current prosecution, compounding application, or compliance decision, consult the latest consolidated CGST Act and the official commencement instruments that apply to the provision. The policy announcement, a bill amendment, enactment, and commencement are distinct stages.
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