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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchAt its 57th meeting on 8 October 2026, the GST Council recommended changes that would remove arrest powers under section 69 of the CGST Act, raise the prosecution threshold, reduce the maximum general penalty and restrict some goods-in-transit inspections. These are recommendations for amendments, not proof that the changes are already in force. The Press Information Bureau’s official release records the proposals.
What did the GST Council recommend?
The Council’s proposals cover criminal enforcement, penalties and notices, appeals, and the movement of goods. The figures and conditions below describe what the Council recommended; they do not establish the law currently applicable to a particular taxpayer.
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| Area | Recommendation | Scope or condition |
|---|---|---|
| Arrest | Omit section 69 of the CGST Act, 2017, withdrawing GST arrest powers. | This concerns arrest authority. It is distinct from the separate proposal to amend prosecution rules. |
| Prosecution | Raise the monetary threshold from ₹1 crore to ₹5 crore and amend offences and punishments under section 132. | Other proposed section 132 changes include omitting one offence clause, deleting specified language from other clauses, limiting one ITC-related offence to fraudulent availment without receipt of goods or services or without an invoice or bill, and rationalising punishments. |
| General penalty | Reduce the maximum penalty under section 125 from ₹25,000 to ₹10,000. | This is a proposed ceiling for the general penalty provision, not a cap or reduction applying to every GST penalty. |
| Show-cause notices | Set a ₹10,000 threshold for notices under sections 73, 74 and 74A. | The proposed threshold aggregates CGST, SGST, IGST and cess. Once the provision comes into force, pending notices and appeals below the threshold would be treated as if it had applied when the notice was issued. |
| Penalty in specified non-fraud cases | Apply a 5% penalty if tax and interest are paid within the specified period after the adjudication order. | The proposed period is 30 days under section 73 or 60 days under section 74A. The Council also recommended removing the minimum ₹10,000 penalty condition for non-fraud cases. |
| Voluntary payment | Deem the penalty amount a “charge” where the full tax, interest and penalty are voluntarily paid within the specified time limit. | This is a separate recommendation; it is not the same rule as the 5% penalty for timely payment in specified non-fraud cases. |
| Penalty-only appeals | Cap the pre-deposit at ₹40 crore for appeals before the Appellate Authority or Appellate Tribunal. | The proposal applies only when the order involves a penalty and no tax demand. The cap comprises ₹20 crore CGST and ₹20 crore SGST/UTGST. |
| Goods in transit | Limit interception of a vehicle carrying goods to cases involving specific intelligence and authorisation by an officer not below Joint Commissioner rank. | The proposal also permits inspection and further detention or seizure when the supplier or recipient is located or registered in the state of interception, rather than in a transit state. Exceptions apply if no e-way bill has been generated or the vehicle lacks documents showing origin or destination; in those cases, inspection, detention or seizure could occur irrespective of jurisdiction. Confiscation under section 130 would not apply to goods or conveyances in transit. |
How the arrest and prosecution proposals differ
Removing arrest powers under section 69 would address whether an officer can arrest under that provision. The proposed increase in the prosecution threshold and changes to section 132 address when specified conduct may be prosecuted and the offences or punishments involved. The Council described these as related reforms, but one proposal should not be read as a substitute for the other.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteThe prosecution threshold is a proposed monetary threshold, not a statement that every case below ₹5 crore would be immune from all GST action. The release does not set out a full case-by-case explanation of how the revised offences and punishments would operate.
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What the notice and penalty changes would mean
The proposed ₹10,000 notice threshold and the proposed ₹10,000 maximum under section 125 are different measures. The first concerns whether a show-cause notice may be issued under sections 73, 74 or 74A, using an aggregate across CGST, SGST, IGST and cess. The second changes the ceiling for the general penalty provision. Neither figure should be treated as a universal GST fine.
The proposed 5% rate is also limited: it concerns non-fraud cases where tax and interest are discharged within 30 days after an order under section 73 or 60 days after an order under section 74A. It is not described as a rate for every offence, penalty or stage of a dispute.
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What else was proposed for enforcement and administration?
Objections to blocked electronic credit
The Council recommended a revised rule 86A process under which a taxpayer could object to an amount blocked in the electronic credit ledger and receive a personal hearing before the proper officer decides the objection.
Notices, orders and refunds
The Council also recommended standardised guidance for demand notices and adjudication and appeal orders, with attention to notice quality, timeliness, proper invocation of fraud or suppression grounds, and natural justice, including personal hearings. It recommended faster, more automated processing for certain refunds; that does not amount to a promise that every taxpayer will receive a refund or that officer involvement will disappear.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Are the recommendations in force?
The PIB release reports what the Council recommended at its meeting in New Delhi on 8 October 2026; it does not itself establish that Parliament enacted each amendment or that it has commenced. It gives no enactment and commencement schedule for every proposal. Before relying on any of these changes in a filing, appeal, enforcement matter or transport operation, check the later official Act, rules and notifications for the relevant provision and effective date.
The meeting’s wider focus was process reform, including registration, returns, refunds, adjudication and trade facilitation. The Council made no GST rate changes at this meeting.
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