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GST Council Overhauls Rules: Removes Arrest Power and Raises Prosecution Threshold
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Firstpost•08-10-2026, 17:50
GST Council Overhauls Rules: Removes Arrest Power and Raises Prosecution Threshold
- •The GST Council has decided to remove the power of arrest under the Goods and Services Tax regime.
- •The prosecution threshold has been raised five-fold from Rs 1 crore to Rs 5 crore.
- •Minimum punishment is removed, leaving the decision of fines or imprisonment to judicial discretion.
- •The general penalty for unspecified violations is reduced from Rs 25,000 to Rs 10,000.
- •Double taxation on services bought and resold in the same line of business has been eliminated to continue the tax chain.
Key Questions Answered
The GST Council decided to remove the power of arrest under the GST regime and raised the prosecution threshold five-fold from Rs 1 crore to Rs 5 crore. Additionally, the minimum punishment was removed, leaving judicial discretion to impose fines, imprisonment, or both.
The general penalty, which applies where no specific penalty is prescribed, was reduced by the GST Council from Rs 25,000 to Rs 10,000.
Under the new reform, services bought and resold in the same line of business will be taxed only once instead of twice. Common instances covered include passenger transport, restaurant and catering services, and hotel accommodations costing up to Rs 7,500 a night booked through an agent.
