57th GST Council recommends scrapping arrest powers and raising the prosecution threshold to ₹5 crore
Key facts
- On 8 October 2026, the 57th GST Council meeting recommended removing arrest powers under GST by omitting section 69 of the CGST Act, 2017.
- The monetary threshold for prosecution would rise from ₹1 crore to ₹5 crore.
- Refund claims for excess cash-ledger balance would be sanctioned automatically by the system, without officer intervention.
- Pre-deposit for appeals in penalty-only cases would be capped at ₹40 crore (₹20 crore each under CGST and SGST).
Why it matters
[Policy] The 56th meeting in 2025 cut and simplified rates. This meeting reforms process and penal law instead. Scrapping arrest powers is a major step towards trust-based tax administration. The Council only recommends. Changes to the CGST Act need Parliament and the States' legislatures, while Rules changes are notified by the Centre. This links to GS-3 taxation and GS-2 federalism.