Daijiworld Media Network - New Delhi
New Delhi, Oct 9: The GST Council has recommended removing the arrest powers of tax officers under GST and raising the prosecution threshold from Rs 1 crore to Rs 5 crore, Union Finance Minister Nirmala Sitharaman said on Thursday.
The Council also approved simplified norms for small sellers on e-commerce platforms and recommended reducing the general penalty, applicable where no specific penalty is prescribed, from Rs 25,000 to Rs 10,000.
Sitharaman said the Council had completed its work on the GST rate structure and would now focus on improving the day-to-day functioning of the tax system. GST rate changes will henceforth be taken up once a year, she added.
Under the recommendations, the minimum punishment for GST offences will be removed, leaving the decision on whether to impose a fine, imprisonment or both to judicial discretion in each case. The Council also recommended that offences involving amounts below Rs 5 crore should not attract prosecution under the revised threshold.
The changes are part of a broader effort to simplify GST procedures and reduce compliance difficulties for taxpayers.
On input tax credit (ITC), the Council discussed concerns over genuine buyers losing credit because a supplier elsewhere in the supply chain allegedly failed to deposit the tax or was found non-compliant.
Sitharaman said the Council had decided to constitute a committee of officers to examine the issue and recommend ways to protect genuine taxpayers while preventing misuse of ITC. The committee will submit its report within three months, after which the Council will consider the recommendations for a final decision.
The minister said the proposed changes relating to process reforms, including those requiring further examination, are intended to be implemented from April 1, 2027.
The Council also recommended measures to facilitate the smoother movement of goods. Under the proposal, goods may be inspected, detained or seized only by officers of the supplier state or the destination state. Interception would be permitted only on the basis of specific intelligence and with authorisation from an officer of at least the joint commissioner rank.
No GST rates were changed at the meeting, Sitharaman said.