Archive · 6 Oct 2026
GST Council Weighs Arrest, Notice and E-Commerce Reforms
The GST Council is expected to discuss changes to tax rules for businesses.
One proposal would make it harder to start criminal cases over smaller tax disputes.
Some offences could stop being crimes, and penalties for others could be reduced.
Another proposal would stop officials from issuing certain notices when the amount involved is below ₹10,000.
If applied to old cases too, it could clear many pending notices and appeals.
Small sellers using online platforms might not need a separate physical office in every State where they sell.
They could verify their address in their home State and use a platform warehouse address elsewhere.
Some small businesses selling only to individual customers could also choose to file one annual return and pay tax quarterly.
The GST Council is expected to consider removing arrest powers for certain GST offences and changing penalties.
Proposals would raise the prosecution threshold from ₹1 crore to ₹5 crore, decriminalise nine offences and reduce maximum sentences for 24 others.
A proposed ₹10,000 minimum for certain show-cause notices could apply to pending cases and close about 1.23 lakh notices and nearly 11,800 first appeals.
Small online sellers may be able to verify a physical address once in their home State and use an e-commerce platform’s local warehouse address in other States.
Eligible businesses with turnover up to ₹5 crore selling exclusively to unregistered consumers may be offered an optional annual return with quarterly payments.
- Who
- The GST Council and businesses affected by the proposed GST changes.
- What
- The Council is expected to consider changes to arrest and prosecution rules, notice thresholds, e-commerce registration and tax filing.
- When
- The proposals are expected to be considered at an upcoming GST Council meeting; no date is stated.
- Where
- India.
- Why
- The proposals aim to deter criminal proceedings in ordinary disputes, reduce administrative backlogs and costs, and ease compliance for small businesses.
- Prosecution threshold
- Proposed increase from ₹1 crore to ₹5 crore.
- Offence changes
- Nine statutory offences proposed for decriminalisation; maximum sentences for 24 others would be reduced, with mandatory minimum prison terms removed.
- Show-cause notice threshold
- Proposed minimum of ₹10,000 under sections 73, 74 and 74A.
- Potential backlog impact
- About 1.23 lakh pending notices and nearly 11,800 first appeals could be closed if the threshold applies retroactively.
- E-commerce sellers
- Proposed one-time physical address verification in the seller’s home State, with a platform warehouse address usable in other States.
- Optional filing change
- Businesses with turnover up to ₹5 crore supplying exclusively to unregistered consumers may be allowed an annual return with quarterly payments.
- Potentially affected traders
- The annual-return proposal could shift roughly 16.66 lakh small traders from recurring monthly filing.