Stories
GST Overhaul Scraps Arrest Powers and Raises Prosecution Limit to Rs 5 Crore
- •The Central Board of Indirect Taxes and Customs issued FAQs detailing a major overhaul of penal provisions under the GST framework.
- •Arrest powers under Section 69 of the CGST Act are completely removed to improve the ease of doing business and stop coercive tax audits.
- •The financial threshold for launching criminal prosecution is raised from Rs 1 crore to Rs 5 crore.
- •Judicial courts are granted full discretion to impose fines instead of mandatory jail terms, and the mandatory minimum six-month imprisonment is omitted.
- •Certain offences under Section 132(1) are narrowed or deleted to protect taxpayers from subjective interpretation and arbitrary enforcement.
Key Questions Answered
The arrest provisions under Section 69 of the CGST Act are completely removed, meaning administrative tax officers no longer have the authority to arrest individuals for offences under the GST law, separating tax administration from personal liberty to improve the ease of doing business and curtail coercive audits.
The monetary threshold for launching criminal prosecution before a competent court has been increased from Rs 1 crore to Rs 5 crore, ensuring that prosecution can only be pursued for high-value tax evasion, erroneous refunds, or fraudulently availed Input Tax Credit exceeding this new limit.
No, imprisonment will not be compulsory upon conviction. The statutory punishment has been changed from 'imprisonment and fine' to 'imprisonment or fine or both', and the mandatory minimum six-month imprisonment requirement has been removed, granting judicial courts full discretion to impose only fines based on the case facts.
