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From easier registrations to protection of genuine ITC claims, several proposals seek to make GST compliance simpler for businesses.
Finance Minister Nirmala Sitharaman (C) and Union Minister of State for Finance Pankaj Chaudhary (R) during the 56th GST Council meeting, in New Delhi. (IMAGE: PTI 2025 FILE PHOTO)
The 57th GST Council meeting, rescheduled for October 8, is set to focus on a range of enforcement and process reforms aimed at making tax compliance easier for businesses, while no major GST rate changes are expected to be taken up.
The Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers, is likely to consider proposals ranging from removing the arrest powers of GST officers and protecting genuine buyers’ input tax credit to simplifying registrationsreducing low-value litigation and easing compliance for e-commerce sellers.
The meeting was originally scheduled for September 12 but was deferred to October 7 due to the BRICS summit. It was subsequently rescheduled for October 8 due to “unavoidable circumstances”, according to the GST Council Secretariat.
Here is what businesses can expect from the meeting:
GST Arrest Powers May Go
One of the most significant proposals before the Council is to remove the power of GST officers to directly arrest taxpayers as part of the government’s broader push to decriminalise GST law.
According to PTI, the proposal is based on the principle of “trust the taxpayer” and would shift the focus of GST officers towards tax recovery, while leaving arrests in cases involving proven criminality to law enforcement agencies and the courts.
At A Glance
The 57th GST Council meeting is rescheduled for October 8.
The Council will consider proposals to remove arrest powers of GST officers and protect genuine buyers’ input tax credit.
The threshold for prosecution is proposed to be raised from Rs 1 crore to Rs 5 crore.
Future GST rate changes are proposed to be taken up only once a year and implemented from April 1.
A proposal seeks to protect the input tax credit of genuine buyers even when an upstream supplier defaults on tax payment.
The proposal does not completely remove arrest provisions from the GST law. Instead, an arrest could be made after criminality is established and prosecution is launched, with judicial oversight.
The power to arrest was incorporated into GST when the regime was introduced in 2017, having been carried over from the Excise Act. Unlike excise, tax officers under VAT and service tax did not have such arrest powers.
The government had initially viewed arrest powers as an important deterrent against fake invoicing and fraudulent input tax credit at a time when technology for matching invoices was still developing.
With invoice matching now possible through technology, the proposal argues that the safeguard provided by arrest powers can increasingly be replaced by the tax system itself.
The threshold for prosecution is also proposed to be raised from Rs 1 crore to Rs 5 crore as part of the decriminalisation exercise.
The changes, if approved, are likely to be implemented in early 2027.
No Big GST Rate Changes
Businesses are unlikely to see another broad GST rate rejig at Thursday’s meeting.
Future GST rate changes are proposed to be taken up only once a year and implemented from April 1, the beginning of a financial year.
The Council had last year moved from the earlier four-slab structure of 5, 12, 18 and 28 per cent to a two-tier structure of 5 and 18 per cent, with the revised rates coming into effect from September 2025.
The October 8 meeting is instead expected to consider a limited set of issues aimed at removing ambiguity in the existing rate structure.
One proposal could clarify that a single 5 per cent GST rate without input tax credit would apply to deliveries through e-commerce platforms.
The emphasis on rate stability is also aimed at giving businesses greater certainty for pricing, contracts and investment decisions.
Easier GST Compliance For Businesses
The Council is likely to consider several proposals under the GST 2.0 process reform exercise to simplify registration and return filing.
One proposal would allow small sellers using e-commerce platforms to use the platform’s warehouse as their registered place of business in states where they do not have their own premises.
The proposal could help around 9.5 lakh small sellers access customers across the country without having to establish physical offices in every state where their goods are stored.
Businesses applying for GST registrations in multiple states could also be allowed to complete applications together, while details from an existing registration could be carried over.
The proposed registration system would provide applicants with guidance at each stage, show only the sections relevant to them and provide a tailored list of documents required for submission.
A unified GST registration documentation process, simpler annual returns and a quarterly tax payment option for MSMEs supplying only to consumers are also likely to be considered.
Input Tax Credit Protection
Another proposal seeks to protect the input tax credit of genuine buyers who possess valid invoices even when an upstream supplier defaults on tax payment.
Under the proposal, recovery action would instead be directed at the defaulting seller.
The move is aimed at addressing a major source of GST litigation and uncertainty for businesses, particularly those buying from small or new vendors.
Fewer Low-Value GST Disputes
The Council may also consider measures to reduce low-value litigation and the administrative burden on taxpayers and tax authorities.
One proposal would bar GST notices where the tax demand is below Rs 10,000. Such cases account for around 20 per cent of cases by number but involve a negligible share of the tax amount, according to the proposal.
For demands above Rs 10,000, tax officers may first be required to send an intimation to the taxpayer and provide an opportunity to respond before issuing a formal notice.
The Council may also consider common standards for issuing and deciding tax demands, including guidelines on notices, distinguishing fraud from ordinary short-payment, conducting hearings and issuing reasoned orders.
Export Rules May Get Clarity
The Council is likely to consider a proposal to align the definition of exports more closely with how Indian companies actually provide services to overseas customers.
The proposal would remove ambiguity over services supplied through an Indian company’s overseas branch.
At present, GST rules require the supplier and recipient of a service to not be establishments of the same person for the service to qualify as an export.
The proposed change would focus instead on whether the customer is located abroad, irrespective of how an Indian company has structured its overseas presence.
The move could benefit IT and IT-enabled services, business and professional services, research organisations, engineering firms, BPO/KPO companies, global capability centres and testing laboratories.
Export of goods and services is zero-rated under GST.
Logistics Checks May Get Smarter
Another proposal seeks to introduce intelligence-led checks on the movement of goods.
Under the proposed system, vehicles carrying goods could be stopped only on the basis of specific prior authorisation from a senior officer and, in general, by the state of origin.
Exceptions could apply where documents are missing or tax is payable by the buyer.
The objective is to reduce repeated stoppages of vehicles crossing state borders, cut transit times and freight costs and make movement of domestic and export cargo more predictable.
What Else Is On The Table?
The Council may also consider withdrawing the IGST exemption on imports of gold, silver and platinum by specified banks and nominated agencies.
It could also take up further measures on compounding of offences and dispute resolution as part of the wider move towards a GST framework that places greater emphasis on tax recovery, compliance and technology-led enforcement.
The Centre and state GST officers’ working group has held more than eight meetings over the past year, while the GST National Coordination Committee has met three times to finalise the proposed process reforms.
The overall direction of the proposals is towards greater taxpayer certaintyeasier compliance and less reliance on procedural enforcement — with the government seeking to distinguish routine tax disputes from cases involving deliberate fraud and criminality.
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Ask News18The GST Council is considering removing the power of GST officers to directly arrest taxpayers without judicial authorization, shifting the focus toward tax recovery and proven criminality. Additionally, the threshold for prosecution is proposed to be raised from Rs 1 crore to Rs 5 crore as part of the broader decriminalisation exercise.
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Shankhyaneel Sarkar is a chief sub editor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over seven years of experience during which he has …Read More
October 07, 2026, 10:47 pm IST
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