Business EconomyPosted at: Oct 8 2026 7:51PM


GST reforms address 99 pc rate, process issues; arrest powers to go, says Sitharaman

New Delhi, Oct 8 (UNI) Finance Minister Nirmala Sitharaman on Thursday said the next-generation Goods and Services Tax (GST) reforms have addressed nearly 99% of issues relating to tax rates and processes, with the latest measures focused on simplifying compliance and making tax administration more predictable.
Speaking after the 57th GST Council meeting, Sitharaman said the latest package was built around a “trust-based approach” and that the new process changes are expected to stabilise over the coming year.
The Council has recommended removing arrest powers under GST and increasing the threshold for prosecution from Rs 1 crore to Rs 5 crore. It has also proposed reducing the general penalty, applicable where no specific penalty has been prescribed, from Rs 25,000 to Rs 10,000.
The government has proposed significant changes to the way GST officials can intercept goods in transit.
Under the new framework, inspections, detention and seizure would be restricted to officers of the supplier or destination state. Goods moving through an intermediate state would not be subjected to routine checks there.
Sitharaman said a vehicle could be stopped only when there is specific intelligence and after authorisation from an officer of at least Joint Commissioner rank.
She said the move would prevent arbitrary intervention by enforcement officials and make the movement of goods across state borders smoother.
The Council has also proposed that tax authorities should not issue a GST demand notice where the tax involved is below Rs 10,000.
It has recommended standardising the format and procedure for tax notices and proceedings. Taxpayers would also be given an opportunity to respond before a formal demand notice is issued.
The measures are aimed at reducing disputes arising from procedural issues and creating greater consistency in the way GST proceedings are initiated and handled.
Small businesses selling through e-commerce platforms are also set to get a simplified registration mechanism.
Sitharaman said the proposed framework would allow small sellers to supply goods across states without having to establish a separate place of business in every state where they operate through an electronic commerce operator.
The move is expected to reduce compliance costs for smaller businesses using online marketplaces to expand their customer base beyond their home state.
The Council also discussed concerns around genuine businesses losing input tax credit because of non-compliance elsewhere in the supply chain.
An officers' committee has been tasked with examining the issue and submitting its recommendations within three months, after which the GST Council will take a final decision.
The government has also proposed allowing employers to claim input tax credit on GST paid for employee insurance cover, subject to the applicable conditions.
The GST refund process is also set for further automation.
The time available for acknowledging a refund application will be reduced from 15 days to 10 days, making it easier for businesses to get clarity on their claims.
The broader reform package includes greater use of technology and risk-based processing to reduce the need for routine intervention by tax officials.
Sitharaman also said the government intends to move towards faceless tax administration under the Central GST regime, which could further reduce direct interaction between taxpayers and officials.UNI VK AAB
Tags: #GST reforms address 99 pc rate# process issues; arrest powers to go# says Sitharaman
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