GST Reforms Likely; Arrest Provision May Be Relaxed

UdaipurTimes, Oct 5, 2026 - India may see a new set of sweeping reforms in the GST (Goods and Services Tax) enforcement rules with the GST Council set to meet on October 7, 2026. People familiar with the matter believe the meeting may discuss scrapping or relaxing rules involving arrest in cases involving ordinary GST evasion or Input Tax Credit (ITC) fraud.

The Council may also propose other prosecution-related reforms such as hiking the limit for launching criminal proceedings for offences to Rs 5 crore. Recently, the provision for arrest in cases related to outstanding direct tax or income tax was also scrapped

In addition, the ITC and refund processes could be simplified to provide relief to small businesses. However, there has been no indication of any proposal to provide tax relief to the general public.

The GST Council has received proposals from several States seeking the removal of the arrest provision in GST-related cases. Business organisations have been opposing the provision and its alleged arbitrary use since its introduction.

The proposed changes in the meeting, the first such meeting in more than a year, are part of the government’s Next-Generation GST reform agenda.

With Media Inputs