Archive · 4 Oct 2026
GST Council to Consider Removing Arrest Powers Over Tax Offences
The GST Council is expected to discuss changing who can make arrests in tax cases.
The proposal would remove arrest powers from GST law.
The Council has not made a final decision.
The Centre and states have discussed the idea for eight to nine months.
Some businesses say arrest powers can create fear or be used to pressure them.
A source said people accused of intentional fraud could still face prosecution.
Arrests in such cases would be handled under India’s criminal law, the Bharatiya Nyaya Sanhita.
Central GST officers made 887 arrests across 72,393 offence cases over four financial years.
If the Council agrees, the government is expected to seek a law change in Parliament’s Winter Session.
The GST Council is expected to discuss removing arrest powers under GST law at its October 7 meeting; no final decision has been made.
The Centre and states have consulted for eight to nine months amid business concerns that arrests can enable overreach and harassment.
A source said intentional fraud would still face prosecution, with arrests in such cases handled under the Bharatiya Nyaya Sanhita.
Central GST formations recorded 72,393 offence cases and 887 arrests from 2021–22 to 2024–25; state arrests are additional.
If the Council supports the proposal, the Centre is expected to pursue legislative amendments in Parliament’s Winter Session.
- Who
- The GST Council, the Centre and state governments; businesses have raised concerns about GST arrest powers.
- What
- The Council is expected to consider removing tax authorities’ arrest powers under GST law, while intentional fraud would still face prosecution.
- When
- The proposal is expected to be discussed at the Council’s October 7 meeting; any amendment is expected in the Winter Session if approved.
- Where
- India.
- Why
- The proposal follows business concerns about overreach and harassment and is intended to address those concerns and improve investor sentiment.
Arguments for removing arrest powers
Arguments for retaining arrest powers
Effect on businesses
Arguments for removing arrest powers
Industry representatives say arrests can create fear and uncertainty, be used as harassment or bargaining tools, and pressure businesses to pay disputed penalties.
Arguments for retaining arrest powers
A CBIC document says arrest provisions are necessary for efficient tax administration and can deter tax evasion.
Limits and safeguards
Arguments for removing arrest powers
Some state representatives argued that arrest powers conflict with ease of doing business and questioned granting detention powers directly to tax authorities.
Arguments for retaining arrest powers
The CBIC says the powers apply only to specified serious offences and amounts, require Commissioner authorisation, and include safeguards.
- Council meeting
- The 57th GST Council meeting is scheduled for October 7.
- Consultations
- The Centre and states have consulted for eight to nine months.
- Central GST enforcement
- Central GST formations recorded 72,393 offence cases and 887 arrests from 2021–22 to 2024–25.
- State enforcement
- Arrests by state authorities are additional to the central GST figures.
- Current law
- Section 69 of the Central GST Act allows the Commissioner to authorise arrests in specified cases, subject to statutory conditions and documented reasons to believe.
- Proposed handling of fraud
- A source said intentional fraud and deceit would still be prosecuted, with arrests handled under the Bharatiya Nyaya Sanhita.
- Possible next step
- If the Council supports the proposal, the Centre is expected to introduce legislative amendments during Parliament’s Winter Session.
- Direct-tax change
- The reports say the CBDT removed arrest and detention provisions from tax recovery rules retrospectively from April 1, 2026.
Sources
Arrest powers under GST regime likely to be removed in bid to address concerns on overreach by tax authorities
GST Council may consider scrapping arrest powers over tax offences at Oct 7 meeting: Report
GST arrest powers may be removed? Council to discuss decriminalisation on Wednesday; law change likely in Winter Session
GST Council likely to drop arrest powers to curb tax overreach: Report
