The council has approved a broad enforcement reset, including a ₹10,000 floor for show-cause notices, faster refunds and a standardised process aimed at reducing disputes.
India’s GST Council has approved a sweeping set of procedural changes designed to make the tax regime less punitive and less cumbersome for businesses, including removing officers’ power to arrest taxpayers and lifting the threshold for prosecution to ₹5 crore, according to reports on the council’s latest meeting. The moves were cleared at the 57th GST Council meeting chaired by Finance Minister Nirmala Sitharaman, with no fresh rate changes announced. The package also introduces a ₹10,000 floor for show-cause notices, meaning cases below that amount will not trigger such action.
The changes mark a significant softening in enforcement. According to Business Standard, the council has also removed the minimum punishment for offences, leaving courts to decide whether a case warrants a fine, imprisonment or both. The general penalty, used when no specific penalty applies, has been cut from ₹25,000 to ₹10,000. Other reports said the council also approved the withdrawal of pending notices below the new ₹10,000 threshold, further reducing the scope for small-value disputes to escalate.
Officials are also moving to standardise and speed up the notice process. Business Standard reported that the council approved a common framework for issuing and serving notices, sending pre-notice intimation, alleging fraud, conducting hearings and drafting orders. That is intended to make GST administration more uniform and to curb avoidable litigation, a persistent complaint among taxpayers and advisers.
On refunds, the council cut the acknowledgement timeline for claims from 15 days to 10 days. If tax officials do not issue either an acknowledgement or a deficiency memo within that period, the claim will be treated as acknowledged, according to Business Standard. The council also agreed that 90% of eligible claims will be sanctioned on the basis of risk assessment, with orders to follow within three working days of acknowledgement rather than seven. Refunds of surplus balances in the cash ledger will be processed automatically, without officer intervention.
The council has also kept the compliance push going on registration and returns. Automated registration within three working days will continue for low-risk applicants and for businesses whose output tax on supplies to registered persons does not exceed ₹2.5 lakh a month. Business Standard said about 61% of registrations already pass through this route. In a separate measure aimed at small consumer-facing businesses, the council approved in principle an optional scheme for taxpayers with turnover of up to ₹5 crore, under which they could file returns once a year while paying tax quarterly. The detailed design will be brought back to the council at its next meeting.
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