57th GST Council Meeting: Proposed Removal of Arrest Provision Under Section 69 and Changes to Prosecution Rules:

The 57th meeting of the GST Council was held in New Delhi on October 8, 2026, under the chairpersonship of Union Finance Minister Nirmala Sitharaman. The Council recommended several changes to simplify GST compliance, improve tax administration and make the system more transparent and taxpayer-friendly.

One of the main recommendations is to remove the provision for arrest under Section 69 of the CGST Act, 2017. The Council also proposed changes to prosecution rules and penalties to create a more trust-based tax system while continuing to deter tax fraud and evasion.

The major recommendations include:

Higher threshold for prosecution: The minimum amount involved for initiating prosecution is proposed to be increased from Rs 1 crore to Rs 5 crore.

Changes to offences under GST: Certain provisions under Section 132 of the CGST Act are proposed to be removed or revised to clarify the offences that can lead to prosecution.

Amendment in clause (c) of section 132 of the CGST Act: The rules relating to the fraudulent availment of Input Tax Credit (ITC) are proposed to be revised to focus on cases where credit is claimed without receiving goods or services, or without a valid invoice or bill.

Rationalisation of punishment: The Council has recommended revising the punishments prescribed for various offences under Section 132 of the CGST Act.

These recommendations aim to reduce the risk of prosecution for less serious cases, simplify GST provisions and provide greater clarity to taxpayers.