GST Council recommends no arrests and raises prosecution threshold 5x

A primer on the recommendations by the 57th meeting of the GST Council, which took place on 8 October 2026. Keep in mind these have not been implemented as of date:

What the GST Council recommended on 8 October 2026

Change	Effect	What it means
No more arrests	Relief	The Council recommended removing the power to arrest people for GST offences
Higher threshold for criminal cases	Relief	Criminal prosecution for tax evasion would begin at ₹5 crore instead of ₹1 crore. Businesses below this limit would still pay the tax owed, interest and penalties
Lower penalties	Relief	The maximum general penalty would fall from ₹25,000 to ₹10,000. No notice would be issued for tax amounts below ₹10,000
Faster refunds	Relief	Exporters and businesses that pay more GST on purchases than they collect on sales would get 90% of refunds processed automatically, acknowledged within 10 days instead of 15
Refunds on services	Relief	Businesses with excess GST credit on input services, the services they buy like rent, transport and software, would be able to claim refunds from 1 November 2026
Refunds on machinery	Relief	Eligible GST credit on capital goods, such as machinery, would become refundable from 1 April 2027. The money would be paid out over 5 years
Relief for small businesses	Relief	Businesses with turnover up to ₹5 crore would pay no late fee if a return that missed its due date is still filed before that month ends
Fewer truck inspections	Relief	Authorities could stop a truck only with specific information suggesting a GST violation, and a Joint Commissioner must approve. States the truck is merely passing through could not stop it
App deliveries	Catch	The delivery of food and grocery orders through e-commerce platforms would attract 5% GST, with no credit allowed for GST paid on purchases
Scrap and used cooking oil	Catch	Buyers, rather than sellers, would pay the GST on plastic, electronic and tyre scrap and used cooking oil. Registered businesses would also face a 2% tax deduction at source (TDS)
More e-invoicing	Catch	Businesses with turnover of ₹5 crore or more would also need to e-invoice purchases from unregistered sellers and services bought from abroad
Old tax notices	Catch	A new clause could bring back GST notices that courts had previously struck down

PIB, Ministry of Finance, Recommendations of the 57th Meeting of the GST Council · 8 Oct 2026

Sources

• PIB, Ministry of Finance, Recommendations of the 57th Meeting of the GST Council (8 October 2026)