GST Council approved enforcement reforms on 8 October 2026, raising the prosecution threshold, removing the power of arrest for GST offences and reducing the general penalty. The measures also aimed to simplify compliance procedures and improve taxpayer convenience, while leaving GST rates unchanged.
India’s Goods and Services Tax (GST) Council approved changes to GST enforcement rules on 8 October 2026, removing the power of arrest for GST offences, raising the prosecution threshold and reducing the general penalty.
The measures aim to ease business compliance and make the tax system more taxpayer-friendly, while leaving GST rates unchanged.
The Council raised the threshold for prosecution for GST offences from INR 10 million to INR 50 million and reduced the general penalty from INR 25,000 to INR 10,000. Taxpayers who file late, make errors or delay payments will face recovery, interest and a proportionate penalty.
The reforms also cover registration, tax returns, refunds, input tax credit (ITC), dispute resolution, exports and the movement of goods across states. The Council aims to simplify compliance procedures and reduce taxpayers’ interactions with tax officials. GST rate matters will be considered once a year at a meeting convened specifically for that purpose.
